11.12.12

Deficit Scolds

Posted in Commentary, The Economy at 9:29 am by wcnews

Paul Krguman puts the blame for our continuinig economic woes where it belongs, Hawks and Hypocrites.

Back in 2010, self-styled deficit hawks — better described as deficit scolds — took over much of our political discourse. At a time of mass unemployment and record-low borrowing costs, a time when economic theory said we needed more, not less, deficit spending, the scolds convinced most of our political class that deficits rather than jobs should be our top economic priority. And now that the election is over, they’re trying to pick up where they left off.

They should be told to go away.

It’s not just the fact that the deficit scolds have been wrong about everything so far. Recent events have also demonstrated clearly what was already apparent to careful observers: the deficit-scold movement was never really about the deficit. Instead, it was about using deficit fears to shred the social safety net. And letting that happen wouldn’t just be bad policy; it would be a betrayal of the Americans who just re-elected a health-reformer president and voted in some of the most progressive senators ever.

About the hypocrisy of the hawks: as I said, it has been evident for years. Consider the early-2011 award for “fiscal responsibility” that three of the leading deficit-scold organizations gave to none other than Paul Ryan. Then as now, Mr. Ryan’s alleged plans to reduce the deficit were obvious flimflam, since he was proposing huge tax cuts for the wealthy and corporations while refusing to specify how these cuts would be offset. But in the eyes of the deficit scolds, his plan to dismantle Medicare and his savage cuts to Medicaid apparently qualified him as a fiscal icon.

And how did the deficit scolds react when Mitt Romney served up similar flimflam, with Mr. Ryan as his running mate? Well, the Peter G. Peterson Foundation is deficit-scold central; Peterson funding lies behind much of the movement. Sure enough, David Walker, the foundation’s former C.E.O. and arguably the most visible deficit scold in America, endorsed the Romney/Ryan ticket.

What Krugman has been saying since 2007 has been right, and most “serious people” have been wrong when it comes to the economy. It’s time for Obama and the rest of the Democratic Party to realize it too. Read the rest of the article because he goes on to shred the fiscal cliff BS. Here’s how he ends his column.

I don’t know how seriously to take the buzz about appointing Erskine Bowles to replace Timothy Geithner. But in case there’s any reality to it, let’s recall his record. Mr. Bowles, like others in the deficit-scold community, has indulged in scare tactics, warning of an imminent fiscal crisis that keeps not coming. Meanwhile, the report he co-wrote was supposed to be focused on deficit reduction — yet, true to form, it called for lower rather than higher tax rates, and as a “guiding principle” no less. Appointing him, or anyone like him, would be both a bad idea and a slap in the face to the people who returned President Obama to office.

Look, we should be having a serious discussion about America’s fiscal future. But a serious discussion is exactly what we haven’t been having these past couple years — because the discourse was hijacked by the wrong people, with the wrong agenda. Let’s show them the door.

Bowles would be a huge mistake. I would say appoint Krugman or Joe Stiglitz, that would be much better for the American people.

Daily Kos has much more on what’s in the papers today, Abbreviated pundit round-up: Deficit scolds and the ‘grand bargain’.

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