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Debunking Deficit Hysteria | The Nation

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Debunking Deficit Hysteria

As John McCain used to say, it’s time for a little straight talk. Here’s mine: Americans don’t care about the deficit. That’s not to say that the public won’t be angry if the country goes broke, defaults on its loans or gets swallowed up by China. But poll after poll shows that Americans care far more about lowering the unemployment rate than lowering our national deficit and debt. The views of the public happen to be directly at odds with the political and media class in Washington, who are practically foaming at the mouth these days while urging the Obama administration to get “serious” about cutting popular and long-establishment entitlement programs, like Social Security and Medicare.

One example of the public point of view: in a CBS News poll immediately after the 2010 election, which supposedly resulted in a Tea Party mandate, 56 percent of Americans ranked the economy and jobs as their top priority for the new Congress, while only 4 percent named the deficit. In mid-January, CBS News and the New York Times once again asked: “Which of the following do you think is the most important thing for Congress to concentrate on right now?” Forty-three percent of Americans chose job creation, compared to 14 percent for the federal budget deficit. Perhaps the administration possesses polling showing that moderate Republican soccer moms in Cincinnati prioritize the deficit above all else, but the rest of the country does not.

Yet the only thing anybody in Washington wants to talk about are cuts, cuts, cuts. As I wrote yesterday, it’s astonishing that at a time of 9 percent unemployment, neither party is laying out a roadmap for how to put people back to work and lift the country out of its economic morass. Someone is going to get punished in 2012 for this. Don’t say we didn’t warn you!

My colleague Chris Hayes laid out the case against deficit-mania in a Nation article last year entitled, “Deficits of Mass Destruction.” Wrote Chris:

Nearly the entire deficit for this year and those projected into the near and medium terms are the result of three things: the ongoing wars in Afghanistan and Iraq, the Bush tax cuts and the recession. The solution to our fiscal situation is: end the wars, allow the tax cuts to expire and restore robust growth. Our long-term structural deficits will require us to control healthcare inflation the way countries with single-payer systems do.

In his press conference today, Obama said that our current deficit is the result of “a series of decisions over the past decade.” What he didn’t say—and should have—was that it’s almost entirely George W. Bush’s fault. Bush inherited a record surplus and passed on to Obama a record deficit—the product of giant tax cuts for the rich in 2001 and 2003, a needless war in Iraq and an aimless quagmire in Afghanistan, a drastic expansion of Medicare designed principally to benefit the health insurance industry, and an economic crisis spurred on by reckless speculation and non-existent regulatory enforcement. Yet by appointing a conservative Republican and a corporate Democrat to head his deficit commission, Obama empowered the deficit hawks who wrongly claim that both parties are equally to blame for the current deficit, and who disturbingly advocate cuts to Social Security, Medicare and Medicaid as the only “responsible” long-term solution. Already the conventional wisdom in Washington posits that Obama’s budget did not cut enough. At Obama’s press conference today, only April Ryan of American Urban Radio asked the president whether such cuts would imperil the country’s path to economic recovery.

Where is the alternative economic vision? As Paul Krugman noted yesterday, the president “has effectively given up on the idea that the government can do anything to create jobs in a depressed economy. In effect, although without saying so explicitly, the Obama administration has accepted the Republican claim that stimulus failed, and should never be tried again.” Obama can spend all the time he wants talking about the deficit and working with Republicans to try to lower it, but if his administration continues to be AWOL on job creation, it’s not hard to figure who’ll get the blame for ignoring what the public so clearly wants. 

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