“Kick That Can”: Fiscal Austerity Should Wait Until The Economy Has Recovered
John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.
But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.
Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.
This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.
Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs. It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.
Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.
One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.
Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.
The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.
But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.
Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 7, 2013
“Having Clearly Learned Nothing”: Michele Bachmann Keeps Seat On House Intelligence Committee
Rep. Michele Bachmann (R-MN) will remain a member of the House Permanent Select Committee on Intelligence during the 113th Congress — despite leading a widely discredited anti-Muslim witch hunt against government personnel last year.
According to the committee list released Friday, Bachmann will stay on the powerful committee despite calls from People for the American Way and others for Speaker of the House John Boehner (R-OH) to remove her. Instead, Boehner in his statement making the announcement praised the lawmakers “charged sacred task of supporting that mission by ensuring the intelligence community has the resources and tools it needs to stay ahead of the evolving threats we face, and by conducting effective oversight of the administration.”
Dismay towards Bachmann’s continuing presence on the committee stems from her use of that position to lead a witch-hunt against then-Secretary of State Hillary Clinton’s top aide Huma Abedin and other U.S. government personnel. In the letter sent to the State Department, Bachmann suggested that Abedin and others were allied with the Muslim Brotherhood, seeking to infiltrate the U.S. government and affect policy decisions. The charges were clearly false, based mostly on the conspiracy theories of noted Islamophobe Frank Gaffney.
Bachmann’s actions split the Republican Party, with several prominent members — including former Speaker Newt Gingrich and former U.S. Ambassador to the U.N. John Bolton — signing onto her conspiracies. Many other Republicans — including Boehner himself — abandoned Bachmann to her quixotic pursuit of imaginary infiltration. Sen. John McCain (R-AZ), then-Sen. Scott Brown (R-MA) and others joined President Obama and Clinton in condemning Bachmann’s scare tactics.
Joining Bachmann in being renamed to the committee are Rep. Lynn Westmoreland (R-GA) and Rep. Tom Rooney (R-FL), who signed onto the original letter sent to State about Abedin. The clearly Islamophobic stances of these committee members makes their position on the committee, with its oversight of the National Security Agency and CIA’s activities, particularly troubling.
Bachmann in particular clearly learned nothing from her experience smearing Abedin. Not only did she stand by the content of her letter to State, as recently as December, but she also compared a letter from a Muslim advocacy group to Adolf Hitler’s Mein Kampf.
By: Hayes Brown, Think Progress, February 8, 2013
“The Enemy Within”: Who’s Trying To ‘Annihilate’ The GOP?
When John Boehner whined last week that Obama’s goal for his second term is to “annihilate the Republican Party” and “shove us into the dustbin of history,” he was working the party into a psychological state much like James Franco had to in 127 Hours: They’re getting ready to accept that they will have to sequester their arm with a dull knife.
Of course, Obama’s War on the GOP is about as real as the liberals’ War on Christmas—both are paranoid, apocalyptic fantasies marketed to drum up fear and self-pity on the right. Obama telling Republicans to “Please proceed” is no more tantamount to annihilating the GOP than chirping “Happy Holidays” is to eliminating Christmas.
Instead, this is a classic case of psychological projection. Paul Ryan, Newt Gingrich, Frank Luntz, and senators Bob Corker, Tom Coburn and Jim DeMint, among other right thinkers, actually held a meeting the night of the 2009 Inaugural to plot to undermine Obama’s newborn presidency with nonstop obstructionism. The next year, Mitch McConnell said, “The single most important thing we want to achieve is for President Obama to be a one-term president.” And yet, after these plans failed to block Obama’s re-election and instead cost the GOP a number of House and Senate seats to boot, here is Boehner saying his party is the victim of existential aggression.
Paranoid projection—whether subconscious or deliberate—is part and parcel of the GOP’s broader denial of so much of contemporary reality, whether it’s climate change, demographic change, macroeconomics or polls that don’t go their way.
But mostly, they deny who that black man claiming to be president really is. And so they’ve created an Imaginary Obama, who is just as crazily radical as the Ryan budget would be, if it were passed, or as Bush’s war in Iraq actually was. In one of the funnier attempts to portray Obama’s insidiously well-cloaked but devastatingly destructive nature, Breitbart.com wrote that by supporting gay rights in his Inaugural speech, the president had “bullied” the Supreme Court justices on the dais into going gay-friendly in their upcoming decisions.
It’s a short step from believing that Obama wants to decimate your party to believing he’s making your party choose hard-right fringe policies that will alienate voters. And as Jonathan Chait writes, moderate Republicans like David Brooks and former Bush speechwriter Michael Gerson, who resent the extremists but won’t break from their party, are particularly susceptible to this “pathological” notion.
The prevalent expression of this psychological pain is the belief that President Obama is largely or entirely responsible for Republican extremism. It’s a bizarre but understandable way to reconcile conflicting emotions—somewhat akin to blaming your husband’s infidelity entirely on his mistress. In this case, moderate Republicans believe that Obama’s tactic of taking sensible positions that moderate Republicans agree with is cruel and unfair, because it exposes the extremism that dominates the party, not to mention the powerlessness of the moderates within it.
Yes, Brooks wrote that Dems think Obama should “invite a series of confrontations with Republicans over things like the debt ceiling—[to] make them look like wackos willing to endanger the entire global economy.”
Chait:
Worse, argues Brooks, Obama is nastily choosing an agenda intended only to harm Republicans. Obama’s proposals on gun safety and immigration, he writes, are “wedge issues meant to divide Southerners from Midwesterners, the Tea Party/Talk Radio base from the less ideological corporate and managerial class.”
Brooks asserts, but does not actually explain, that Obama chose these issues for the purpose of dividing the opposition—as opposed to trying to cut down on mass murders and fix a huge field of broken policy.
What Obama does do, by being a politically moderate and emotionally calm leader with a beautiful family, is hold a mirror up to the chaotic and hysterical Republican leadership. This strikes them as very mean, and they blame Obama for what they see, Man of La Mancha style.
So now they are struggling to dream an Impossible Dream: taking back the political momentum by simply agreeing to the “poison pill” plan that the sequester was supposed to be, cutting $1.2 trillion from the budget spread equally between defense and domestic spending. The corporate end of the party will scream at those cuts, and fear the economic impact of austerity; the ultra base, now increasingly gerrymandered into scarlet congressional districts with little incentive to compromise, would get, given the $1.2 trillion Obama has already agreed to cut from the budget, something like the Ryan budget’s $2.4 trillion in spending cuts over the next 10 years. “I think the sequester’s going to happen,” Ryan said today on Meet the Press.
In a game of chicken like this one, the GOP has to convince us all that they mean it in order to win, so there may be a lot of play-acting here. But they also need to concentrate the minds of every Republican in the House to make the threat real. And nothing does that like the threat of “annihilation.”
By: Leslie Savan, The Nation, January 27, 2013
“The New Politics Of Immigration”: Opportunist Republicans “Leading From Behind”
Think back to the battle over health-care reform. Can you imagine that Republicans, upon hearing that President Obama was about to offer his own proposals, would want to rush ahead of him to put their own marker down — and take positions close to his?
That’s the comparison to keep in mind to understand the extraordinary transformation of Beltway politics on immigration reform. Until Obama was reelected, party competition translated into Republican efforts to block virtually everything the president wanted to accomplish. On immigration, at least, the parties are now competing to share credit for doing something big. It’s wonderful to behold.
Republicans who always held views on immigration similar to the president’s — notably Sen. John McCain — are now free to say so. Other Republicans who thought a hard line on the issue was a political winner have been forced by the electoral facts to change their minds. Democrats, aware of how important Latino votes are to their party’s future, are determined to get immigration reform done. Nothing is certain in Washington, especially in the Republican-led House of Representatives, but the odds that we will finally fix a broken immigration system are very high.
The behind-the-scenes wrangling over the choreography of this week’s twin immigration announcements — by a bipartisan group of senators and by the president in a speech in Nevada — shows how strong the bias toward action has become.
We’ve become so accustomed to the politics of obstruction that we forget there is still such a thing as legislative craftsmanship. Monday’s unveiling by eight senators of their ideas for reform was months in the making as Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) worked closely with their colleagues to prepare for this moment.
But Obama felt compelled to make clear early on that immigration reform was one of his highest priorities. The Senate negotiators worried that if Obama got out front with positions more progressive than theirs, particularly on a speedier path to citizenship for illegal immigrants, he could foil their efforts to reach accord.
This fear reflected the GOP’s Obama-can’t-win response to whatever he does. Until now, Republicans criticized him for not taking “leadership” in pushing for immigration reform. But as soon as he was ready to speak out, the GOP switched direction, warning that his leadership was the last thing they wanted — and could get in the way of a compromise. Thus did House Speaker John Boehner use a spokesman to instruct Obama to be “careful not to drag the debate to the left and ultimately disrupt the difficult work that is ahead in the House and Senate.”
As it happened, by letting it be known that he planned to give an immigration speech, Obama sped up the timetable of the Senate group, said a House Democrat active on the issue, and even encouraged a small collection of House Republicans eager for reform to let it be known that they, too, were working toward compromise. Obama sought to thread the political needle by laying out his principles while holding off on proposing a bill of his own. He would send up legislation only “if Congress is unable to move forward in a timely fashion.” A relieved Schumer, using words almost never heard in Washington, declared that the president “is handling this perfectly.”
There will be much posturing over the next several months. By going slightly to the progressive side of the senators, Obama may ease the way for Republicans to strike a deal since they will be able to claim they stayed to the president’s right. Conservative supporters of reform, such as Sen. Marco Rubio of Florida, will keep saying critical things about the president to preserve their credibility with the right. And if Boehner is interested in reform, he, too, must play a delicate game of distancing himself from Obama to persuade his most conservative colleagues to acquiesce to a vote on a bill.
But make no mistake: This is immigration reform’s time. It was poignant to hear McCain state plainly and eloquently what he has always felt. “We have been too content for too long,” he said, “to allow individuals to mow our lawn, serve our food, clean our homes and even watch our children, while not affording them any of the benefits that make our country so great.” Thanks to an election, those words are no longer politically incorrect inside John McCain’s party.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, January 30, 2013
“Paranoid And Delusional”: Republicans Are Lost In Their Own Wilderness
Republicans shouldn’t worry that President Obama is trying to destroy the GOP. Why would he bother? The party’s leaders are doing a pretty good job of it themselves.
As they try to understand why the party lost an election it was confident of winning — and why it keeps losing budget showdowns in Congress — Republican grandees are asking the wrong questions. Predictably, they are also coming up with the wrong answers.
They prefer to focus on flawed tactics and ineffectual “messaging” rather than confront the essential problem, which is that voters don’t much care for the policies the GOP espouses.
In post-debacle speeches and interviews, Republicans sound — and there’s no kind way to put this — paranoid and delusional. House Speaker John Boehner said in a speech to the Ripon Society that the Obama administration is trying to “annihilate the Republican Party.” Rep. Paul Ryan of Wisconsin, the party’s fiscal guru and failed vice presidential candidate, claimed Sunday on “Meet the Press” that Obama seeks “political conquest” of the GOP.
It is no secret that Obama is trying to advance a progressive agenda. He promised as much in his campaign speeches. Were Republicans not listening? Did they think he was just joshing?
In five of the past six presidential elections, Democrats have won the popular vote. Republicans have done well at the state level and, through redistricting, have made their majority in the House difficult to dislodge. But it’s not possible to lead the country from the speaker’s chair, as Boehner can attest. To have a chance at effecting transformative change, you have to win the White House.
And to win the White House, you have to convince voters that the policies you seek to enact are the right ones. This is what the GOP doesn’t seem to understand.
“We’ve got to stop being the stupid party,” Louisiana Gov. Bobby Jindal, one of the GOP’s brightest young stars, said in a much-anticipated speech last week at the party’s winter meeting. “We’ve got to stop insulting the intelligence of voters. We need to trust the smarts of the American people.”
That’s all well and good. But Jindal also warned that the party should not “moderate, equivocate or otherwise change our principles” on issues such as abortion, gay marriage, “government growth” and “higher taxes.”
On abortion, there is an uneasy consensus that the procedure should be legal but uncommon; the GOP wants to make abortion illegal, and the party’s loudest voices on the issue do not favor exceptions even for incest or rape. On gay marriage, public opinion is shifting dramatically toward acceptance; the Republican Party is adamantly opposed. On the size of government, Americans philosophically favor “small” — but, as a practical matter, demand services and programs that can only be delivered by “big.” And on taxes, voters agreed with Obama that the wealthy could and should pay a bit more.
“We must reject the notion that demography is destiny, the pathetic and simplistic notion that skin pigmentation dictates voter behavior,” Jindal said. These are noble and stirring words. But the GOP is insane if it does not at least ask why 93 percent of African Americans, 71 percent of Latinos and 73 percent of Asian Americans voted for Obama over Mitt Romney.
If minority voters continue to favor the Democratic Party to this extent, then demography will indeed prove to be destiny. What would be simplistic is to attribute the disparity to the fact that Obama is the first black president, or to the fact that Republicans have been perceived as so unsympathetic on issues concerning immigration. If they want to attract minority support, Republicans will have to take into account what these voters believe on a range of issues, from the proper relationship between government and the individual to the proper role of the United States in a rapidly changing world.
I have to wonder if the GOP is even getting the tactics-and-messaging part right. Michael Steele (now an MSNBC colleague of mine) served as party chairman when Republicans won a sweeping victory in 2010; he was promptly fired. Reince Priebus presided over the 2012 disaster; last week, he was rewarded with a new term as chairman.
But no matter who’s in charge, the GOP will have a tough time winning national elections until it has a better understanding of the nation. If Boehner is worried about being swept “into the dustbin of history,” he and other Republicans need to put down the broom.
By: Eugene Robinson, Opinion Writer, The Washington Post, January 28, 2013
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