Blinders On The Norquist Strategy

Matt Yglesias writes:

The deficit is a problem only in the sense that the short-term deficit is currently too small. But this is one reason I’m surprised so many liberals are being so stinty in their praise of the recent tax deal. We’d just all been spending 12 months arguing that contrary to the conventional wisdom, short-term deficits should be smaller. We also spent a lot of time observing that conservative deficit-talk is fraudulent and all they care about is tax cuts for the rich. Then the Obama administration, after a year of fruitless austerity gambits, finally called their bluff. “Fine, you can have your deficit-increasing tax cut extension, but give me some other deficit-increasing stuff that my economists say has a higher multiplier than your tax cuts for the rich.” Now the deal is done, and for all the panels and commissions and all the money Pete Peterson’s spent the parties are coming together to make the deficit bigger.

This is all kinds of wrong. I'll explain on the flip.

First, Yglesias thinks that progressive objections to the Bush tax cuts are based on concern for the short term deficit. Dead wrong. The concern is that extending the Bush tax cuts will lead to cuts in REAL effective stimulus - government spending. This is the "starve the beast" Norquist strategy. Pete Peterson is not going away. He was just quiet about TAX CUTS. When it comes time to cut spending, Pete Peterson will be back.

Second, over the longer term, The Deal will likely make the Bush tax cuts permanent, which will lead either to unsustainable deficits or, more likely, even deeper cuts in the social safety net.

Yglesias clearly has blinders on regarding this issue.

Speaking for me only

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  • Display: Sort:
    Pete Peterson is not going away (5.00 / 4) (#1)
    by Militarytracy on Wed Dec 15, 2010 at 11:21:19 AM EST
    he has only begun to fight, and this deal makes his arsenal bigger and better, his weapons more able to devastate.  Pete Peterson is as happy as a pig in $hit right now.  He has tied Social Security to the General Fund and all the states are going broke.  There will be a horrible crash in the municipal bonds market soon.  Pete Peterson has wanted little more than to destroy Social Security, and there was always a strategy out there trying to tie it to the General Fund in order to do that.  Now they've gotten it done, right before the double dip hits.  Pete Peterson is practically orgasmic.

    Yup - people seem to naively think (5.00 / 2) (#2)
    by ruffian on Wed Dec 15, 2010 at 11:35:07 AM EST
    that Pete Peterson is for smaller government out of some principle. Low taxes are his whole motivation. I don't think he gives a rat's petootie about government.

    Not only is Pete Petersen not (5.00 / 6) (#4)
    by Anne on Wed Dec 15, 2010 at 12:07:52 PM EST
    going away, but neither are Alan Simpson and Erskine Bowles, and - the real kick-in-the-nuts - neither is Barack Obama, who has been singing from the slash-spending, make-tough-choices songbook for a while now.  And, the Republicans we've got coming in to chair important committees in the Congress are fairly drooling over the knives they're sharpening for the coming session.  And Obama thinks people like Paul Ryan have some "good ideas" that we have to be willing to consider.

    There simply cannot be a sentient being who, after considering the totality of what's been happening, still believes this tax deal will stimulate anything other than the deficit hysterics' appetite for what they love most: starving the government.

    Years and years of tax cuts and spending cuts that have failed to create jobs, failed to increase demand, failed to "trickle down" are all of a sudden supposed to make sense because there's a guy with a (D) after his name holding court in the Oval Office?

    Does the "H" in "Barack H. Obama" really stand for "Hoover?"

    This is worse than blinders; this is more like blind-ness, with a good deal of hearing loss thrown in for good measure.

    What a recipe for disaster.


    The Deal (5.00 / 2) (#3)
    by Warren Terrer on Wed Dec 15, 2010 at 11:39:55 AM EST
    also puts more money into the pockets of the rich who will use it to buy more politicians and fund more Pete Peterson institutes to ensure their stranglehold on government.

    Dead wrong is right. (5.00 / 1) (#5)
    by masslib on Wed Dec 15, 2010 at 02:05:15 PM EST
    What bubble is this guy in?  Wonderful analysis, BTD.