Saturday, March 2, 2013

Sequestration - Political Doomsday Device

Government-By-Crisis.  How's it working out for you?
I don't worry much about the Sequestration cuts.  Oh, make no mistake, I am fully onboard with Krugmanesque Keynesian Economics, and I fully believe that we should be borrowing and spending trillions now, while the money is so cheap it's actually free, in order to stimulate aggregate demand and create conditions that would support real domestic economic growth.  But I can't help but enjoy watching indiscriminate cuts to military spending, goring the ox of very serious people who believe federal government spending of the poor and elderly should be cut to pay for ever more investment in weapons and wars.  But my general comfort with these radical, poorly designed and clumsily executed across-the-board cuts to discretionary programs goes well beyond my pleasure in seeing the catastrophic predictions of American national peril as a result of a 5% cut to military spending proven utterly unfounded and patently ridiculous.

Sure, cutting 85 billion dollars in spending will certainly serve to reduce GDP growth this year, but GDP growth was anemic to start with, and the impact will be a kind of "Tears on a River" sort of thing.  And while it most certainly will not help the unemployment situation, most of the reductions in unemployment over the last year have been illusory, with very little improvement in the hardest-hit sectors and regions, while the problem of long-term unemployment just keeps getting worse.

But here's the thing.  Republicans and movement conservatives like to shriek about the deficit and the debt, but you'll notice they never DO anything about it.  Ever since the Reagan 80s, when the Republicans were in power they always increased the deficit, essentially never paying for any of the programs they instituted.  Deficit reduction was always left to those times when the Democrats were in power, and was therefore limited in scope and impact.  The Clinton administration, for example, balanced the budget and actually produced an operating surplus, but at a time when America was at full employment and personal incomes and wealth were, for the only time in a generation, actually rising.  This time, despite the fact that there is a Democratic President in office, will be significantly different.  The cuts are deeper, the economy is depressed and fragile, and real unemployment is in double figures, so the impact of the cuts will be obvious, and the suffering will be pushed down to the neighborhood level.  All while the arguments at hand clearly leave the Republicans in Congress, not the Obama White House, holding the bag for all the suffering.  They're demanding an all-cuts strategy for deficit reduction, but the Sequester IS an all-cuts strategy for deficit reduction, so people are going to actually see what that kind of blind, ideologically driven policy will produce in the real world.

So for the first time, people on Main Street are going to see what the America being demanded by Republicans in Washington and their corporate paymasters looks like.  What spending capped at 18% of GDP would bring.  What the Paul Ryan budget would create.  People in Boston and Chicago and San Francisco will suffer, but so will people in Tulsa and Lexington and Houston.  And in the 2014 mid-term elections, Democrats are going to be able to hearken back to these events, and say "That is the vision they are offering you.  An America that cannot afford to care for it's own citizens, one that creates suffering for the middle class and the poor in order to protect the riches of a tiny percentage of wealthy Americans".  And this time it won't be rhetoric.  There will be facts on the ground, experienced and cataloged by those to whom the Republicans will have to explain.  They will justify their actions, but the damage will be done - people will see where these policies actually lead, and while the result may well not be a mass conversion to a liberal ideology, it will certainly lead people to demand sanity, pragmatism and even honesty from their political leadership.

America is a modern, technologically and industrially advanced nation.  We live in a twenty-first century characterized by intelligent devices, high-speed travel and a global economy.  America cannot survive with an underfunded government - dependence solely upon for-profit undertakings will eliminate all the benefits that created the modern American economy, from education to infrastructure to Big Science R&D.  The Republican dedication to protecting all the wealth of America's richest citizens and corporations comes at a catastrophic cost, and will result in a place where wide swaths of people are suffering.  And while I often note that Americans are too divided by pointless ideology to unite at the polls and too comfortable to take to the streets to demand the restoration of democratic governance, if there is one direct path to that outcome, it is to take away their last vestiges of comfort and security.  And THAT is the lesson of the Sequester.


  1. 1) I will defer my screed to Artois:

    => What Will Fix This

    I think even among anti-austerity folks there's a general belief that, well, austerity sucks in the short run but over the longer run things will eventually just fix themselves because capitalism. With Europe actively trying to destroy several economies I don't know how that's possible.

    Italy's seasonally adjusted unemployment rate jumped to 11.7 percent in January from 11.3 percent the month before to hit its highest level for at least 21 years, data showed on Friday.

    And Italy isn't nearly the worst case in Europe.

    by Atrios at 08:50 <=

    2) Oh, nevermind.

  2. This is true in both relative and absolute terms, Thunder. American federal government spending needs to be at about 22% of GDP no matter what you do with those funds, and it will need to grow to about 24% of GDP with the increasingly elderly population. To pretend, as the Republicans do, that we can POSSIBLY operate the United States of America at a cost of 16 or 17% of GDP is one of their more contemptible lies - and is NOT one held or supported by most economists, or most Democrats, for that matter...