Political Bloviation

Let’s review how we got to where we are:

1. Jan 2001 – Clinton leaves office with an annual budget surplus of $128 billion
2. May 2001 – Congress approves and Bush later signs a $1.35 trillion broad based tax cut that primarily reduces the burden on the wealthiest tax payers.
3. Sept 2001 – Terrorist hijack and crash airplanes into the World trade Center and Pentagon.
4. Oct 2001 – The war in Afghanistan begins.
5. Jan 2002 – Bush’s annual budget deficit $158 billion
6. Jan 2003 – Bush’s annual budget deficit $378 billion.
7. Mar 2003 – The war with Iraq begins.
8. May 2003 – Bush signs $350 billion tax cut, slashing tax rates on dividends and capital gains. Tax payers who don’t own a large pile of stocks or lack unrealized capital gains are out of luck.
9. Jan 2004 – Bush’s annual budget deficit $413 billion.
10. Jan 2005 – Bush’s annual budget deficit $318 billion.
11. Jan 2006 – Bush’s annual budget deficit $248 billion.
12. Jan 2007 – Bush’s annual budget deficit $161 billion.
13. Jan 2008 – Bush’s annual budget deficit $458 billion.
14. Jan 2009 – Bush’s annual budget deficit $1.413 tillion.
15. Jan 2010 – Health reform, which would help reduce the deficit is effectively derailed.
    

Budget data source: http://www.whitehouse.gov/omb/budget/fy2011/assets/hist01z1.xls

So, Obama comes into office with the Detroit bailout and banking bailout already in place. He proposes a health care reform package that’s projected to cut the deficit by $73 billion over ten years. It’s a relatively modest amount, but certainly better than the current reality of ever increasing costs within the Medicare and Medicaid programs which are one of the drivers of increasing deficits.

The Senate, in it’s finite wisdom, decides that cost controls are bad and reduces or eliminates many of the cost control features in the bill, simply because they’re easy to attack. Compromises that weaken cost controls, consumer costs and coverage are made in a vain effort to win Republican support. They get one vote from Sen. Snowe of Maine. You have to love the smell of bipartisanship in the morning, it smells like victory. No that’s not right. Defeat? No that’s not it either. Maybe like an old woman from Maine

Additional budget projections come out showing what I’ve know for quite some time, we’re screwed if we continue down the path laid by the Bush administration. Deficit hawks suddenly appear out of the wood work, blaming Obama for massive deficits and calling for tax cuts at the same time! An ever gullible press amplifies the pronouncements of these self-styled budget hawks.

We are in the midst of a historic economic downturn. Right now is when the government should be running deficits to help get us through this. But, we have the very people who ran up enormous debts telling us that the federal government needs an austerity program to reduce spending. If the goal is to push the country into a new Great Depression, then that’s a fine plan. The GOP mismanaged the economy and the federal government to the point that the ability to do what’s needed has been severely constrained by their prodigious ability to spend billions without bothering to actually raise the money through taxes or spending reductions.

Exactly which party is the party of fiscal and economic sanity? Why does anyone with a grain of common sense listen to the GOP?

Update:

Krugman had something similar in today’s NY Times about the sudden budget hubbub:

Why, then, all the hysteria? The answer is politics.

The main difference between last summer, when we were mostly (and appropriately) taking deficits in stride, and the current sense of panic is that deficit fear-mongering has become a key part of Republican political strategy, doing double duty: it damages President Obama’s image even as it cripples his policy agenda. And if the hypocrisy is breathtaking — politicians who voted for budget-busting tax cuts posing as apostles of fiscal rectitude, politicians demonizing attempts to rein in Medicare costs one day (death panels!), then denouncing excessive government spending the next — well, what else is new?

The trouble, however, is that it’s apparently hard for many people to tell the difference between cynical posturing and serious economic argument. And that is having tragic consequences.