Especially if those words are nonsense about Obama’s spending spree.
Posts Tagged ‘Budget deficit’
A Picture Worth a Thousand Words
Tuesday, February 2nd, 2010Freeze Frame is Not Right for Dems
Tuesday, January 26th, 2010Obama’s announcement of a spending freeze on discretionary programs was a disappointing surprise. Cutting the federal budget during a recession, when unemployment is high, is a really dumb idea.
It turns out that this is not really a spending freeze; it is a budget cap that doesn’t kick in until 2011 and allows the administration considerable flexibility in keeping stimulus and other federal money flowing through the economy. In essence, he is doing what he promised during the campaign—taking a scalpel to programs that don’t work and using those savings to fund programs that do.
Despite some of the apoplectic responses in the left blogosphere, this is not a job killer.
But it is still not a good idea. The Obama Administration is negotiating with itself here. Republicans will not give him credit for any budget reductions.
Obama came into office with the task of changing American’s perceptions of the value of government. Now is the time to convince the American public that government has an important role to play creating jobs when private industry has failed.
Instead, by calling this a “freeze”, which is what the Republicans have been calling for, he has reinforced the failed Republican narrative that government is not part of the solution. This is bad economics; it is disastrous social policy. And it sends the wrong message at the wrong time.
Moreover, his so-called “freeze” does not include military expenditures which are the biggest source of waste and fraud in the budget. If we need to scrutinize individual programs for their effectiveness, why does Defense and Homeland Security escape scrutiny?
The answer, I think, is that conservatives would whine if he proposed cuts in these areas,.
Obama’s tendency to reinforce right-wing ideas continues to disappoint.
Dwight Furrow is author of
Reviving the Left: The Need to Restore Liberal Values in America
For political commentary by Dwight Furrow visit: www.revivingliberalism.com
No Exit
Tuesday, October 20th, 2009One could argue that in theory liberal democracies should exhibit a repeatable pattern in their politics.
Voters elect liberals who promise lots of social programs to improve people’s lives. But these social programs are expensive so they have to raise taxes to pay for them. The public eventually takes the social programs for granted but gets tired of high tax rates. So they elect conservatives who cut taxes and restrain spending on social programs.
But eventually the need for more social programs becomes acute and the liberals are elected again and the cycle begins anew.
In the U.S., this pattern was interrupted by the Reagan revolution and the Two Santa Claus theory—more formally known as supply side economics. Republicans discovered they could stay in power by cutting taxes (Santa 1) and increasing spending (Santa 2). And for 30 years it worked, thanks to the willingness of China, Saudi Arabia, etc. to buy our Treasury bonds. We buy their stuff; they use that money to buy U.S. securities—everybody is happy.
Until, of course, at some point the budget deficit will get out of hand. There is a good deal of debate among economists regarding whether we have reached the point where budget deficits will harm the economy—with interests rates low and no inflation on the horizon it would seem we haven’t reached it yet. (and no, the budget deficit is not the result of Obama’s policies—it is a holdover from the Bush Administration)
But eventually the budget deficit must come down or interest rates and inflation will take its toll.
So what are the options?
We can (a) cut government spending, (b) raise taxes, or (3) hope the rest of the world will continue to finance our deficit indefinitely. I see no evidence that the public is willing to see their taxes increased or their services (along with military expenditures) cut. The Two Santa Theory is now part of the public’s expectations.
That means our fate depends on the rest of the world. If/or when China and other countries decide they have to reinvest their cash in their own economies or conclude that the U.S. is not a safe investment, the dollar will slide and interest rates will skyrocket.
Then the party will be over.
Both Santa’s will be out of a job.
Did I mention today is a glass half empty day?
