Skip to main content

The Deficit Scolds Revealed as Obvious Frauds


Visit NBCNews.com for breaking news, world news, and news about the economy
I was watching some Up with Chris this morning (update: posted above) and Hayes about came unglued making the point that few in Washington seems to get—that the problem with the fiscal slope (the set of tax increases and spending cuts set to take effect automatically next year) is that it will make the federal deficit too small. And yet we have the same parade of rattling deficit scolds who have been gravely intoning about how immoral it is to leave such a debt load to our children suddenly up in arms about this fiscal slope. Consider this throwaway line from Andrew Sullivan:
We are facing automatic massive tax hikes and huge, crude spending cuts starting January 1 if we cannot get a bipartisan deal on Bowles-Simpson lines (of course there is room for tweaking and bargaining). A failure to get that kind of deal would tip the US and the world into a new global depression.
Every single thing about this is wrong or misleading. First, it's true that the fiscal slope's massive dose of austerity would probably cause a recession, but they will take effect only gradually. There is plenty of time to get a deal before the cumulative impact on aggregate demand would be noticeable, and the extra taxes collected could even be rebated to restore consumer spending. Sullivan's implication that there are bone-crunching effects starting January 1 is wrong.

But more importantly, Bowles-Simpson is in no universe a solution to the problem of the fiscal slope. We could simply return to the status quo ante, ignoring this Ahab quest for a Grand Bipartisan Bargain altogether, and the problem would be averted. Proposing Bowles-Simpson (remember, allegedly a deficit reduction plan) as a solution for the fiscal slope is like saying, "There will be a famine, so therefore we must stop growing so much food." The only conceivable reason for it would be to entice Republicans—but remember, the president holds all the cards after January 1st.

As Matt Yglesias points out, the GOP has no leverage here and things will likely play out as Obama desires. Dems get a bit more revenue, and the House gets to vote for tax cuts after they've gone up. In fact, the NYT today has a story about how John Boehner has been bluntly warning his caucus they're going to have to swallow some painful votes.

But this moment has starkly revealed the fiscal scolds for what they are: a bunch of frauds. Not Sullivan, I think, he seems more just muddled by a weird crush on the Bowles-Simpson plan, but nearly all of the rest. Read this incredibly duplicitous letter from a bunch of CEOs sounding the alarm about this issue. What's their recommended solution? Why, tax reform which just coincidentally includes lower rates for everyone.

Nobody cares about the deficit, least of all the people who whine about it constantly. Their preferences have been revealed.

UPDATE: Paul Krugman has more, including an amazing catch from a deficit scold org saying we should only cut "low priority" spending. Wonder what that means...
[Cross-posted from Political Animal.]

Comments

Popular posts from this blog

Why Did Reality Winner Leak to the Intercept?

So Reality Winner, former NSA contractor, is in federal prison for leaking classified information — for five years and three months, the longest sentence of any whistleblower in history. She gave documents on how Russia had attempted to hack vendors of election machinery and software to The Intercept, which completely bungled basic security procedures (according to a recent New York Times piece from Ben Smith, the main fault lay with Matthew Cole and Richard Esposito), leading to her capture within hours. Winner recently contracted COVID-19 in prison, and is reportedly suffering some lingering aftereffects.
Glenn Greenwald has been furiously denying that he had anything at all to do with the Winner clusterfuck, and I recently got in an argument with him about it on Twitter. I read a New York story about Winner, which clearly implies that she was listening to the Intercepted podcast of March 22, 2017, where Greenwald and Jeremy Scahill expressed skepticism about Russia actually being be…

On Refusing to Vote for Bloomberg

Billionaire Mike Bloomberg is attempting to buy the Democratic nomination. With something like $400 million in personal spending so far, that much is clear — and it appears to be working at least somewhat well, as he is nearing second place in national polls. I would guess that he will quickly into diminishing returns, but on the other hand spending on this level is totally unprecedented. At this burn rate he could easily spend more than the entire 2016 presidential election cost both parties before the primary is over.

I published a piece today outlining why I would not vote for Bloomberg against Trump (I would vote for Sanders, Warren, Buttigieg, Klobuchar, or Biden), even though I live in a swing state. This got a lot of "vote blue no matter who" people riled up. They scolded me and demanded that I pre-commit to voting for Bloomberg should he win the nomination. The argument as I understand it is to try to make it as likely as possible that whatever Democrat wins the nomi…

Varanus albigularis albigularis

That is the Latin name for the white-throated monitor lizard, a large reptile native to southern Africa that can grow up to two meters long (see pictures of one at the Oakland Zoo here). In Setswana, it's called a "gopane." I saw one of these in my village yesterday on the way back from my run. Some kids from school found it in the riverbed and tortured it to death, stabbing out its eyes, cutting off its tail, and gutting it which finally killed it. It seemed to be a female as there were a bunch of round white things I can only imagine were eggs amongst the guts. I only arrived after it was already dead, but they described what had happened with much hilarity and re-enactment.

When I asked why they killed it, they said it was because it would eat their chickens and eggs, which is probably true, and because it sucks blood from people, which is completely ridiculous. It might bite a person, but not unless threatened. It seems roughly the same as killing wolves that e…