Tuesday, February 2, 2010

Deficit Monster Eats the United States

The New York Times had a “news analysis” today that proclaimed in its headline that “Deficits May Alter U.S. Politics and Global Power.” The pertinent sentence was “Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors.”

Of course. This is part of the conservative strategy to hamstring this country’s liberals. While the Republicans are in power they drive up the national debt to dangerous levels which wrecks the economy, resulting in the election of Democrats. The Democrats then have to spend all of their time fixing the wrecked economy, leaving no time or money for their liberal initiatives. After a term or two, the electorate wonders why the Democrats haven’t delivered on any of their promises and fall prey to the Republican snake-oil pitches again.

Case in point: after 12 years of Reaganomics, the U.S. economy was sputtering in 1992. Bill Clinton’s internal campaign motto was “It’s the economy, stupid.” Ross Perot received a respectable number of votes for a third-party candidate because he spoke to people’s fears about the mushrooming federal deficits.

In the 12 years of the Reagan-Bush Sr. administrations, the federal debt quadrupled, from 1 trillion to 4 trillion dollars. (At the U.S. Treasury website you can see the official federal debt for every year from 1791 to 2009)

Bill Clinton won in 1992. One of his campaign promises was to cut middle-class taxes, but Federal Reserve chief Alan Greenspan scared him so bad about the risks of the deficit, Clinton reversed himself and didn’t ask for that tax cut. Clinton scaled back on all of his progressive legislative plans because, he’d been convinced, the country couldn’t afford them. The voters turned on him and the Republicans won big in 1994.

Despite the prosperity of the 1990s, the country was evenly divided in 2000 and George W. Bush got into the presidency. You could easily argue that the reason was partly due to the widespread perception that, as Ralph Nader famously said, there’s no difference between the two parties. The Democrats acted like conservatives--fiscally responsible ones, that is--in the 1990s.

The Bush administration took the prosperity and federal budget surpluses handed them by Clinton and squandered them. Tax cuts for the wealthy, two wars, and a massive drug bill, all unfunded, caused the federal debt to double during George W. Bush’s administration.

Yet during those eight years of profligate deficit spending, almost no one spoke of it. As long as a Republican is in power, it seems that deficit spending is not worthy of mentioning. It certainly never interferes with the legislative priorities of the Republicans.

But now the Democrats are in power we once again hear the warnings that the deficit monster is threatening to destroy our nation. Not only can’t the Democrats initiate any new programs, they have to freeze programs already in place.

Buried in the New York Times article was this sentence: “In the early years of the Clinton administration, government projections indicated huge deficits — over the ‘sustainable’ level of 3 percent — by 2000. But by then, Mr. Clinton was running a modest surplus of about $200 billion.” Those projections were wrong but the damage had been done.

Notice that no one mentions cutting the military budget, obscenely bloated to over $700 billion. Notice that no one mentions raising the income tax on the wealthy. A CBS news report on Obama’s budget stated that one of the groups who would be “losers” if this budget were enacted were families making over $250,000 a year, because the Bush tax cuts were going to be allowed to expire.

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