“Oh, The Irresponsibility”: Karl Rove–Presidents Who Leave Deficits, Bad Economies, And War Are The Worst
Karl Rove is most famous for being architect of one of the worst presidencies in American history and then a Superpac strategist/delusional Romney campaign-night dead-ender. I’m a Rove junkie, and just as a snobbish fan of any popular band must have some obscure album he finds superior to the band’s most popular work, the Rove career function I find most delightful and rewarding is his work as a Wall Street Journal op-ed columnist. This is the medium that truly pulls back the curtain on Rove’s fascinating combination of insularity from facts outside the conservative pseudo-news bubble, delusional optimism, and utter lack of self-awareness. The Journal column is a weekly gift to amateur Rove psychoanalysts everywhere.
Today’s column begins with Rove’s bizarre belief that the health exchanges in Obamacare are a “single-payer” system, reflecting his apparent confusion about what this term means. (The single-payer in a single-payer system is the government, not the insurance companies in the exchanges.) But the main point is the Orwellian proposition that “Mr. Obama’s pattern is to act, or fail to act, in a way that will leave his successor with a boatload of troubles.” What kind of president would bequeath a boatload of troubles to his successor? Oh, the irresponsibility. The first count in Rove’s indictment is the budget deficit, which “was equal to roughly 40% of GDP when Mr. Obama took office. At last year’s end it was 72% of GDP.” One possible cause of this deficit might be the over-trillion-dollar annual deficit, that one George W. Bush handed over when he left office, along with the massive economic collapse.
Rove’s column goes on to express very strong views on the need for fiscal responsibility:
Then there’s Medicare, whose Hospital Insurance Trust Fund will go bankrupt in 2026. For five years, Mr. Obama has failed to offer a plan to restore Medicare’s fiscal health as he is required by the law establishing Medicare Part D. When Medicare goes belly-up, he will be out of office.
The Congressional Budget Office projects the Affordable Care Act will reduce deficits by more than a trillion dollars in its second decade. Yes, the Hospital Insurance Trust Fund is expected to reach insolvency by 2026, but when Bush left office, that projected insolvency date was nine years earlier. Meanwhile, Medicare’s projected spending has fallen by nearly $600 billion since the passage of Obamacare:
You can plausibly argue that these changes, combined with other cuts to long-term deficits, including partial expiration of the Bush tax cuts, don’t go far enough. But Rove is trying to make the case that Obama’s policies made the long-term budget outlook worse, which is false.
You know whose policies made the long-term outlook way, way worse? Yes, of course you do. Literally the entire Bush agenda – tax cuts, new domestic spending, major expansions of the military — was financed by debt. Rove tries to paint Bush as fiscally responsible because Obama has “failed to offer a plan to restore Medicare’s fiscal health as he is required by the law establishing Medicare Part D.”
That sentence is really the best. The point of the column is that Obama is terrible for leaving deficits to his successor. Rove is supporting this charge by citing a law his president passed, that created a major new debt-financed entitlement that Obama inherited. And he’s presenting this as Obama’s irresponsibility because the debt-financed entitlement Bush passed required the next president to come up with a law solving Medicare’s problems. And because Obama has alleviated but not completely solved Medicare’s problems, this shows that Obama has sloughed problems off onto the future. What a slacker, Obama is, sloughing off problems onto his successor rather than solve them as the president who came before him required him by law to do.
This leads us to the most Rove-ian paragraph in the column, and possibly in the entire history of the Rove oeuvre:
From the record number of Americans on food stamps to the worst labor-force participation rate since the 1970s to rising political polarization to retreating U.S. power overseas and increasing Middle East chaos and violence, Mr. Obama’s successor—Republican or Democratic—will inherit a mess.
What kind of president would leave his successor with a bad economy and a violent Middle East?
By: Jonathan Chait, Daily Intelligencer, New York Magazine, February 14, 2014
“Deficit Of Truth”: What Republicans Hope You Don’t Know And Never Find Out
Listening to Republicans in Congress wailing incessantly about our spendthrift culture raises a nagging question: What would they do, besides talking, if they actually wanted to reduce federal deficits and, eventually, the national debt?
First, they would admit that President Obama’s policies, including health care reform, have already reduced deficits sharply, as promised. Second, they would desist from their hostage-taking tactics over the debt ceiling, which have only damaged America’s economy and international prestige. And then they would finally admit that basic investment and job creation, rather than cutting food stamps, represent the best way to reduce both deficits and debt, indeed the only way — through economic growth.
Fortunately for those Republicans and sadly for everyone else, the American public has little comprehension of current fiscal realities. Most people don’t even know that the deficit is shrinking rather than growing. According to a poll released on Feb. 4 by The Huffington Post and You.gov, well over half believe the budget deficit has increased since 2009, while less than 20 percent are aware that it has steadily decreased. (Another 14 percent believe the deficit has remained constant during Obama’s presidency.)
Unsurprisingly, perhaps, it is Republican voters, misinformed by Fox News, who most fervently and consistently insist on these mistaken ideas, with 85 percent telling pollsters that the deficit has increased. Less than a third of Democrats gave that answer. But nearly 60 percent of independent voters agree with the Republicans on that question and only 30 percent of Democrats understand the truth – an implicit repudiation, as The Huffington Post noted, of the president’s political decision to prioritize deficit reduction rather than job creation.
The facts are simple enough even for a Tea Party politician to understand. The federal deficit reached its peak – in dollar amount and as a share of the national economy – in 2009, which happens to be the year that Obama took office. Thanks to the profligate war and tax policies of the Bush administration — which undid the fiscal stabilization achieved under President Clinton — the Treasury had no financial margin when the Great Recession struck. Federal spending required to avoid another (and possibly far worse) worldwide Depression, combined with declining tax revenues that resulted from economic stagnation and tax cuts, all led inevitably to that record deficit.
Over the past five years, the red ink has swiftly faded. This year’s deficit will be about $514 billion, or about one-third of the $1.5 trillion deficit in 2009; next year’s will be even lower, at around $478 billion. As when Clinton was president, those marked fiscal improvements are mainly the product of a slowly recovering economy and growing incomes, along with federal budget cuts.
But not only is the good news about the shrinking deficit widely ignored; it isn’t actually good news at all. By avoiding a mostly mythical “budget crisis,” federal policy has created a very real jobs crisis that persists, with particular harm to working families. The latest Congressional Budget Office report on the fiscal outlook for the coming decade strongly suggests that the cost of reducing the deficit has been – and will continue to be – substantial losses in potential economic growth and employment.
The ironic consequence, as former White House economist Jared Bernstein recently explained, is that the fiscal outlook for the next 10 years will be somewhat dimmer than expected. In other words, we will return to higher deficits because fiscal austerity –enforced by Republicans and accepted by Obama – is still dragging the economy down.
To restore the kind of growth that lets families prosper and ultimately erases deficits, the Republicans would have to listen to the president — especially when he calls for public investment in infrastructure and an increased minimum wage, the first steps toward robust growth and fiscal stability.
If Americans understood the truth about deficits and debt – and how the federal budget affects their jobs and income – the congressional obstruction caucus, also known as the GOP, would have no other choice.
By: Joe Conason, The National Memo, February 6, 2014
“Something To Celebrate”: Affordable Care Act Gives Workers Freedom, Republicans Enraged
Since I wrote about postal banking this morning, I’ve decided to continue the day’s shameless, lowest-common-denominator clickbaiting by talking about a new Congressional Budget Office report and the Affordable Care Act. Hang on to your hats.
With all the hype of a new Beyonce album, the CBO dropped its latest report on government finances and other related topics, which includes the news that the deficit has dropped to its lowest level since Barack Obama took office. This may prove inconvenient for Republicans still invested in fomenting deficit panic, but they’ll be helped by the fact that most Americans actually believe the deficit has gone up in the Obama years. According to a new poll from the Huffington Post, not only do 54 percent of people think so, but 85 percent (!) of Republicans think so.
In any case, the part of the CBO’s report that’s getting more attention is their projection that as a result of the ACA, the labor force will be reduced by 2 million in 2017, rising to 2.5 million in 2024. Unsurprisingly, Republicans rushed to the trumpets to shout that “Obamacare is going to cost 2.5 million jobs!!!” even though that’s not actually what the CBO said. Even news organizations who ought to know better made the mistake; earlier today, a headline at the Washington Post‘s web site read, “CBO: Health Law to Mean 2 Million Fewer Jobs” (it has since been corrected to read, “CBO: Health Law to Mean 2 Million Fewer Workers”).
The important thing to understand about the reduction in the labor force is that this is exactly what was supposed to happen. When you eliminate “job lock,” where people who’d like to leave their jobs can’t because if they do they won’t have health insurance, a certain number of people are going to take advantage of their newfound mobility. In some cases you might be able to construe it as a loss to the economy, say if a productive full-time worker cuts back to part time because she can. But in many cases it’s something to celebrate: an American exercising their freedom.
Imagine, for instance, a couple. The wife is a lawyer in private practice; the husband is an accountant at a large firm. Since she’s a cancer survivor, he has stayed at his job for the health insurance it provides, because if he didn’t they wouldn’t have been able to get coverage, what with her pre-existing condition. But now, he can make a different choice. And it happens that her business is doing pretty well, and he’d rather stay home with the kids and work on his novel than be an accountant. So he has the freedom to quit his job, and they can still get covered. When he does so, he’s no longer in the labor force. But that doesn’t mean there’s one fewer job in the economy. His firm will just hire someone else.
That isn’t to say there will be zero net loss to the economy; without his income, the couple will probably spend less. But their children may also grow up happier and more well-adjusted, and who knows, he might write the next great young-adult dystopian fight-to-the-death trilogy with the extra time he has between 9 and 3 every day. These are good things.
That’s just one kind of person who leaves the labor force because of the ACA; there will also be lots of people who leave jobs to start their own businesses, and some who decide to retire early because now they can. If people are making those decisions freely—just like people have the freedom to do in every other advanced economy in the world—it would be crazy to think of it as something to be lamented.
By: Paul Waldman, Contributing Editor, The American Prospect, February 4, 2014
“Republicans Lying To Themselves”: Washington Austerity At Its Most Self-Defeating
This morning, the Post has a nice report about methane leaks. A team of researchers toured DC and documented nearly 6,000 natural gas leaks in the city’s decrepit pipe system, including 12 spots where concentrations had built to potentially explosive levels.
What does this have to do with the current obsession with austerity in Washington? Quite a lot, it turns out.
You see, Republicans have been arguing that America needs savage fiscal austerity because we can’t afford to do otherwise. “Let’s be honest…we’re broke,” says John Boehner. This was and is preposterous then and now markets continue to snap up American debt, which is still at historically low interest rates. But this methane study shows the Republican budget-cutting fever at its worst and most self-contradictory. Not granting the money to repair this aging pipe system isn’t just dangerous, it costs us more money. Let me explain why.
The case is obvious when you think about it: shelling out for maintenance now is dramatically cheaper that it is to wait until after the system breaks (and blows the street apart, as the case may be). Put in beloved Republican household accounting terms: suppose a central support beam in your home has cracked, threatening the collapse of the roof. Does it make more sense to nip down to the bank for a quick loan to replace the beam now, or procrastinate and have to build a new house?
It’s even worse when we take the slack economy into account. Borrowing rates are super-low. Construction and raw material costs are cheaper than they will be later if and when the economy picks up. Every wasted day not investing in repairs and upgrades just means more expensive, catastrophic failures.
Make no mistake, this is a terrible problem. Aside from leaky methane in DC, there’s the fact that the average water pipe in this city was installed in 1935, leading to an average of about 450 water main breaks yearly. Here are sinkholes caused by blown water mains in Philly and New York City. Nationwide, for water systems alone there’s an unmet repair bill totaling in the hundreds of billions that is going up steadily, year after year, as our capital stock continues to decay.
What we should be doing is increasing federal infrastructure investments and increasing aid to states and cities, which would allow the country as a whole to start tackling its massive backlog of deferred maintenance needs. If we did this, we’d avoid the expensive emergency repairs that are now the norm for keeping American cities functioning.
That doesn’t even begin to address the need for new investments, like hugely expanded broadband networks, or new higher-speed rail lines, by the way.
In a way, this negligence on infrastructure is just dodgy accounting that would get you thrown out of any halfway decently-run business. A budget process that allows you to claim you’re “saving money” while your critical infrastructure is falling to pieces is just allowing you to lie to yourself.
By: Ryan Cooper, The Plum Line, The Washington Post, January 16, 2014
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