Road to a 2010 Democratic Victory
The general handwringing in Washington from the Repubs on the new deficit numbers are the classic response of people like John Boehner who partied too hard in college to ever get to that morning Econ 101 lecture. Paul Krugman straightens him out.
There are two main reasons for the surge in red ink. First, the recession has led both to a sharp drop in tax receipts and to increased spending on unemployment insurance and other safety-net programs. Second, there have been large outlays on financial rescues. These are counted as part of the deficit, although the government is acquiring assets in the process and will eventually get at least part of its money back. What this tells us is that right now it's good to run a deficit. Consider what would have happened if the U.S. government and its counterparts around the world had tried to balance their budgets as they did in the early 1930s. It's a scary thought. If governments had raised taxes or slashed spending in the face of the slump, if they had refused to rescue distressed financial institutions, we could all too easily have seen a full replay of the Great Depression. As I said, deficits saved the world.
Thursday's offering of $29 billion in seven year notes was well received with a bid to cover ratio of 2.74 times, so there is no evidence that foreign buyers are shunning U.S. Treasuries. As Krugman points out our debt to GDP ratio is still in reasonable limits and if we could ever tackle the cost of medical care and its effect on Medicare spending, that would come down over time.
In general, consumers are reverting to classic patterns of spending most of their pay check faster than I thought, although they continue to pay down their credit cards. The "investor class", which surveys show includes about 70% of the population is feeling better about their portfolios and that may have something to do with increased confidence. Certainly the specter of inflation promised by the deficit hawks is nowhere on the horizon. Firms have no pricing power and certainly requests for wage hikes are not being pressed by anyone in this fragile employment market.
Going forward I believe the Obama Administration can steadily work this fall to get a Health Care Bill passed and then apply their political operation in the new year to getting Democrats reelected. They will be able to run on having saved the economy from a depression and ask if we want to put the fragile recovery back in the hands of the Know Nothing Party that got us into the mess in the first place. If they play their cards right they could defy conventional wisdom and actually pick up a couple of seats in the mid-term election.
Krugman is right, as far as he goes. But the idea that our debt is manageable is not the same as saying it is acceptable. It's still a representation of our national selfishness and inability to accept the consequences of our actions.
It wasn't the Bush Administration taking out loans it couldn't afford, or offering them. As Krugman notes, that borrowing can be paid back.
The people who are really leveraged to the hilt, and gorging on debt, were us, we the people. And now our government is protecting us from the wages of our sin by mortgaging our children's future, so that we can be more comfortable in the present.
And the Democrats are okay with that. Hell, they're gleeful.
Maybe the voters are too. We'll see.
August 28, 2009 12:15 PM | Reply | Permalink
Typical right wing nonsense. If you want to complain about the deficit, focus on the folks who brought it to us, the Republicans who have been depleting the government's ability to achieve reasonable tax effort. If we had not had 30 years of Republican deficits when times were relatively good, we wouldn't find a short anti-depression deficit at all challenging.
August 28, 2009 9:33 PM | Reply | Permalink
It's a feature for Republicans, not a bug.
Think of it as a backdoor means of preventing Democratic spending on social initiatives.
By spending profligately, Rs create a reasonable basis for arguing that "we can't afford these costly new entitlements!1!!!"
Or put another way - "you're right, repairing the roof would be a good idea, but we can't afford it until we pay off the powerboat."
They can make public noises agreeing with the general principle that the most vulnerable among us deserve help, while specifically refusing to actually do so for fear of budget deficits and enlarging the national debt.
August 30, 2009 10:09 AM | Reply | Permalink
"It wasn't the Bush Administration taking out loans it couldn't afford, or offering them. As Krugman notes, that borrowing can be paid back."
Now that's creative thinking! The Bush Administration pisses away a huge surplus on sleazy tax cuts for the rich, sleepwalks its way into 9/11 despite being warned many times, starts one unnecessary war when police action would have been based in Afghanistan but abandons that to pursue to the all time act of madness in attacking Iraq, blows unspeakable fortunes there and outdoes the raw insanity of the fiasco by prosecuting the insane venture with monumental incompetence, refuses to correct course when Rumsfeld is a posture child for failure until is it is forced to, deregulates Wall Street to bring the world to very near economic collapse, then bails them out with more gazillions and now here you come along to blame it all on somebody else.
You must think we are pretty stupid indeed.
To the contrary, this is the kind of argument you want to reserve for the nation's greatest imbeciles, i.e., the Fox watchers ("We deceive, you believe"), Limbaugh brownshirts, Palin nitwits, and militia McVeighists.
August 29, 2009 1:35 PM | Reply | Permalink
Yep
August 29, 2009 1:49 PM | Reply | Permalink
I don't think the Bush Administration's policies were well designed either. Unlike Paul Krugman and the denizens of this comment thread, I'm not willing to ignore the fact that they were not the source of all the evils of the world, even for the sake of political expediency.
We elected this guy twice for a reason: there are a lot of Americans, including a lot of Americans who voted for Barack Obama, who thought he would do a better job than Al Gore and John Kerry.
Hell, maybe he did.
The problem with responses like "typical right wing nonsense" is that I voted for Gore, Kerry, AND Obama; I represent something relatively left of center.
And until the denizens of this comment thread (and their political representatives, like Henry Waxman) recognize what the mainstream of political, economic and social thought is in this country, they won't be anything but bitter failures in American politics.
Barack Obama isn't a progressive, and he would have lost if he was.
September 3, 2009 11:39 AM | Reply | Permalink
Solely concentrating on replacing republicans with democrats in places where that will never happen in a million years misses a huge opportunity.
The better plan would be to support progressive challengers in republican primaries to bring a new type of GOP into being over a number of years even as democrats do the same in their own primary races. Fighting a dwindling republican party (and whatever conservative independents and democrats that exist) over the next few decades is sure to make whatever generational transformation that could have been yield more mediocre and transitory results instead.
When will the "big brains" on the left start advocating innovative strategies instead of the same failed partisan rhetoric?
August 28, 2009 12:16 PM | Reply | Permalink
I hesitate to respond to you, Jason, because I know you will instantly do your ad hominem thing on me, then accuse me of ad hominem.
However, I must point out that your proposition is simply not workable. Aside from you, the vast majority of the Republican Party are members of the twenty-eight percent who see Limbaugh, Hannity, and (shudder!) Beck as perveyors of truth, justice and the American way. You'll never persuade the millions of Democrats and independents it would take to nudge you party away from the brink of the chasm. The concept surges right past quixotic into the Land of the Catastrophic.
But not to worry. Most people are not nearly naive enough even to attempt such a disastrous maneuver.
August 28, 2009 10:03 PM | Reply | Permalink
This entire comment is ad hominem and you accuse of the crime going in? Very odd debate style.
You provide nothing other than your opinion as proof of this supposition. Do you have a link to some sort of study backing this up or was your ass the resting place for this particular factoid? The "vast majority" of the republican party are not "twenty three percenters" in the Palin or Limbaugh or Beck mode. The republicans that come to this site don't fall into that category, though without fail that is how they are greeted. Not a single republican I know in real life falls into that category, though they certainly aren't ready to the keys to the kingdom over to democrats.
Just because a couple million idiots tune in to hear a couple of other idiots talk doesn't make them the majority. It makes them rabid. Which is what partisans do. That is why they are called "the base" because they can be counted on to go frothy at the drop of a hat. Same thing for democrats, though they are mostly moderates willing to discuss issues vice ideology.
You are letting the fringe identify the silent majority. Just like all fringe folks do. They want to believe they are the majority, so they think their party is all like them and the other party is all wackos. It isn't ad hominem to point out that all your interactions with me are highly partisan in nature and are not in keeping with the actual reality of our political environment.
So, once again, you are wrong (or at the very least severely prejudiced) in your estimation of what is going on in the republican party based on the loudest of the loudest assholes. Those types are NEVER representative of the party as a whole, despite their visibility.
August 29, 2009 8:44 AM | Reply | Permalink
Yeah, I don't know why I bother.
August 29, 2009 9:20 PM | Reply | Permalink
JEM: There are more than a few reasonable Republicans out there, especially here in New England. But surely you've seen the polls that show over half of all self-indentified Republicans either doubt or don't believe that Obama is a citizen; think there are "death panels" in the health care legislation; believed for years that Saddam was behind the 9/11 attacks, etc. etc. Unfortunately, there is plenty of evidence to back up the conclusion that a large chunk of GOP voters are basing their opinions on "facts" that simply aren't facts. And when you get into some parts of the country, like the South and the southern plains states, those numbers of people go way up.
August 30, 2009 1:39 PM | Reply | Permalink
There is not a single poll that says half of the republican party believes Obama isn't a citizen. Most people don't even vote consistently, so I don't think it is safe to say either party is anything for sure. I suspect that for most issues, Americans can be conservative or liberal or a little of both depending on what is being discussed.
August 30, 2009 3:02 PM | Reply | Permalink
When in doubt, make it up, there's your philosophy. There are multiple polls that show that half the self-identified Republicans doubt that Obama is a citizen. If you regularly follow the front page here at TPM, you're aware of them. If you don't, why are you blessing us with your ejaculations?
August 31, 2009 6:33 PM | Reply | Permalink
Why not bless us with a single link to "multiple polls" that show half of the republican party believe the crazy shit coming from the far right wing. Not even the republicans who come to this site believe it, let alone the silent majority of the party who barely bother to vote.
August 31, 2009 6:41 PM | Reply | Permalink
Here's one. As I said, you can find others that have been referenced from TPM in recent weeks. But to get you started:
http://www.dailykos.com/story/2009/7/31/760087/-Birthers-are-mostly-Republican-and-Southern
Do you believe Barack Obama was born in the United States of America?
That would be 58% of Republicans in the "No/Not sure" group. Idiots all!
August 31, 2009 6:52 PM | Reply | Permalink
No, it is an idiot who would believe any poll that happens to back up his world view.
That poll could just as easily say that 70% of all republicans believe he was probably born here or don't give a fuck either way. There is no methodology to how it was conducted or who was polled or where or what questions were asked.
I don't suppose you care how they came to those numbers as long as they prove your point.
For me, however, I am more likely to believe direct personal experience. Not a single republican I know in the real world believes this crap. Any republican to be polled and asked such nonsense questions is just as likely to give a bullshit answer as the truth.
Anyone who uses polls to justify their political opinions might need to read a few more actual books.
August 31, 2009 7:02 PM | Reply | Permalink
It's a thought but not unless Republican party unity cracks in a big way. If Republican senators are going to vote as an unassailable block on every issue, I'd rather have even a Blue Dog Democrat.
August 29, 2009 1:23 AM | Reply | Permalink
Again, I don't think it will be the party in Washington that does anything. It will be the silent majority stepping up to finally take their place in the dialogue. Absent that trend in both parties, the fringes will continue to dominate our politics and America will continue to go down the crapper.
August 29, 2009 8:48 AM | Reply | Permalink
That good ol' Silent Majority. The non-silent and very real majority has spoken loud and clear. We want progressive policy change and the GOP just doesn't have a clue.
Now how's that for ad hominem?
August 29, 2009 11:28 AM | Reply | Permalink
Obama ran as a fairly moderate democrat who is progressive on some things, but much less so on others. His medical plan was much less progressive than most of the other democratic nominees.
Further, had Obama not garnered 10 to 15 percent of the republican vote, he wouldn't be president, so a healthy portion of his constituency are people are not progressive by the liberal definition of the word, though I bet more than a few are very progressive by the original definition of conservative that came from the party of Abraham Lincoln and Teddy Roosevelt.
Progress is measured in inches gained against entrenched foes not Hail Mary passes that typically fail to connect.
August 29, 2009 1:28 PM | Reply | Permalink
Ten to 15 percent of 30 percent is a "healthy portion of his constituency????" Come on, Jason, that doesn't even work in Conservative arithmetic.
August 30, 2009 11:20 AM | Reply | Permalink
They represented the percentage he needed to actually get elected. Plus moderate democrats and independents. Yes, his constituents that aren't on the left end of the spectrum are a healthy percentage of the total.
August 30, 2009 11:29 AM | Reply | Permalink
Nice changeup. Not honest, of course, but we have come to expect dishonesty from you conservative fringies.
August 30, 2009 7:35 PM | Reply | Permalink
Now I am a conservative fringie? You really are unhinged. You can't read what I write and apparently that makes me dishonest. Anonymity must make you brave because no one is this big of an asshole in person without spending a lot of time with their jaw wired shut.
August 31, 2009 6:28 AM | Reply | Permalink
Work out the statistics, man. A heavy Democratic turnout plus a majority of independents is enough for a landslide in this country. Obama clearly got a majority of independents. What matters going forward is keeping the Democrats enthused, and keeping the independents favorably impressed. The only "Republicans" worth going after are those who have had enough unreality and declared themselves independents.
Beyond that, what reason is there, given the statistics of the American electorate, to ever pander to another know-nothing wing nut? Are there a few states where that still somehow makes sense, even though it drives away the Democratic faithful and the intelligent independents?!
August 31, 2009 6:41 PM | Reply | Permalink
If you think all the former republican independents and republican moderates are ever going to become democrats, I want some of what you are smoking. More than half of this country identify as independent and half of them are conservative. They aren't going to become liberals anytime soon.
Regardless of the specific label one chooses, this country is roughly split between liberals and conservatives.
To keep the independent vote as well as those moderate republicans who supported him, Obama will have to continue with his very pragmatic policy positions rather than catering to his more rabid and vocal base.
August 31, 2009 6:51 PM | Reply | Permalink
The 2010 Democratic slogan --
"Change is the Last Thing You Should Ever Believe In!"
Our only hope is that independents stay home.
August 28, 2009 12:33 PM | Reply | Permalink
Agreed.
August 28, 2009 9:23 PM | Reply | Permalink
"Going forward I believe the Obama Administration can steadily work this fall to get a Health Care Bill passed and then apply their political operation in the new year to getting Democrats reelected."
El Presidente is right. Politically speaking at least, it doesn't matter whether the deficits are manageable. What matters is whether the majority of the people think they are, and the fact is that they don't. They are frightened of the debt and the deficits, and even more so of the fact that they are growing so rapidly and appear to be out of control. It is going to hurt the Demos very severely in the 2010 elections, and even more in the 2012 ones.
"f you want to complain about the deficit, focus on the folks who brought it to us,"
Well, the Demos have had solid control of Congress for nearly three years now. To most people, that means they are the ones who brought it to us. The Repubs did an abominable job, and did a lot of damage. But now it's the Demos. And the people are bright enough to see that most of the money is going straight to the corporates.
August 28, 2009 11:54 PM | Reply | Permalink
Another 2010 campaign slogan ---
"We Sold You to the Health Insurance Industry. Vote Democratic!"
N.B. Requiring people to buy insurance without regulating the premiums (that is, failing to enact a strong public insurance option) is arrogant if not dictatorial -- guaranteed to be viewed as unfair (and lack of fairness is the death knell of any public policy and curtains for those judged responsible for it) by most citizens.
August 29, 2009 1:02 PM | Reply | Permalink
This is exactly right. If Team Obama/Reid cave to the noise and a handful of sad, power hungry Senators and push through mandates w/o real cost control - which at this point amounts to a strong public option - then they will have signed away a generation's support for Democrats. Such a capitulation WILL seriously cripple long term Dem hopes for a lasting majority, as well as hopes for this country to join the rest of the developed world in terms of quality of life, evolved policy, system sustainability, functional shifts towards realistic self assessment, etc.
This is one they cannot mess up. Mandates are going to be a part of whatever bill gets passed; if Americans are forced under threat of penalty to pay through the nose for coverage, this WILL be a deal breaker. Imagine a scenario: the Repukes (and Blue Ticks) know they can't stop some kind of bill; most of the same would love to see their pals and benefactors in insurance and pharma rake in massive $$$ through mandates on 50 million folks, subsidized by the gov't. as necessary, far exceeding any losses incurred through tighter regulations. But wait: wouldn't it be really, really nice for Repukelicans if along with this there were a huge backlash, in particular amongst younger, healthier voters who tend to choose to be uninsured, against mandated insurance with sky high premiums? I've read some excellent historical referencing of social security's original limited coverage, and how this was expanded over time; in today's media climate, along with the willingness of the right to scorch the earth (literally and figuratively), is a repeat of this scenario really plausible?
So perhaps, thinking long term, Obama’s Waterloo isn’t so much NOT passing a bill, or a bill with tighter regs, but PASSING a bill which hammers 25 million young voters with unwanted mandates requiring (no choice) backbreaking insurance premiums. I really, really hope the folks in the White House are locked and loaded one this one.
August 30, 2009 10:42 PM | Reply | Permalink
You know when I think about people like Grover Norquest I can't but help think that this was the republican plan. They had no interest in retaining control this year- hell they made no long term plans at all, no designated aires. Just utterly reck it and then sit back and scream bloody murder while the pansy liberals try to fix it (save the military spending by entrenching it in endless wars)
Then in a few years they ride in and kill it. Opps we can't afford your social security check, sorry grandma medicare is broke.
August 29, 2009 1:48 PM | Reply | Permalink