"Deficit Reduction" Means Cutting Spending

By Big Tent Democrat, Section Other Politics
Posted on Fri Jan 14, 2011 at 10:43:08 AM EST
Tags: (all tags)

Share This: Digg!

The utter failure of The Deal will continue to be evidenced as the debate about "cutting the deficit" accelerates. While the WaPo article subject of my post below is indeed quite stupid, stupid is the norm for "policy debate" in the Beltway. The Deal has empowered the stupid. Consider this from the WaPo article:

The urgent need for policymakers to reduce the deficit was underscored Thursday, when two major rating agencies expressed discomfort with the country's financial condition. [. . .] In view of the recent extension of tax cuts enacted during the George W. Bush administration, the report said, "the outlook for near-term stabilization of U.S. government debt ratios is not promising."

(Emphasis supplied. ) That would be The Deal. So what can be done? Why massive cuts in spending of course:

Because of the size and resilience of its economy, the United States "maybe has more time" than other countries to "move to a more restrictive fiscal policy," [Moody's Steven] Hess said. "But what we're saying is, still, it needs to be done at some point, roughly over the next couple of years."

(Emphasis supplied.) When he says "restrictive fiscal policy" what he mean is massive spending cuts.

Speaking for me only

< Beltway: Obama Reluctance To Raise Taxes On Middle Class Impedes Deficit Reduction | Counterfactual: What If Obama Had Not Done The Deal? >

Legal

Nothing on this site should be construed as legal advice. TalkLeft does not give legal advice.

TalkLeft is not responsible for and often disagrees with material posted in the comments section. Read at your own risk.

"Deficit Reduction" Means Cutting Spending | 37 comments (37 topical)

Readers Must Login or Create an Account to Comment

Gad! (5.00 / 7) (#3)
by lentinel on Fri Jan 14, 2011 at 11:10:22 AM EST

Ending the wars would provide us with an extra two billion dollars a week. I suppose that is off the table.

The "Deal" empowered the stupid.

But what does that say about the people who empowered the people who empowered the stupid?

The eternal frustration is... (5.00 / 1) (#10)
by kdog on Fri Jan 14, 2011 at 11:24:22 AM EST

we do need to drastically cut or eliminate some spending...rub is it is the spending deemed "untouchable" by even deficit hawks.

Give me and some math wizards 2 weeks we'll have a surplus, start paying down debt, and have enough left over to expand the safety net, no need to contract it or even freeze it. Maybe even a middle & working class tax cut to boot.

I know. (none / 0) (#13)
by Ga6thDem on Fri Jan 14, 2011 at 11:30:51 AM EST

This really isn't that hard but it's just that no one wants to cut the biggest gravy train out there-the military industrial complex. Just getting rid of a failed program like star wars would save how much money?


: Hear Hear... (5.00 / 2) (#18)
by kdog on Fri Jan 14, 2011 at 11:34:39 AM EST

military industrial complex, prison industrial complex, and the fastest growing leech on the block, the financial "services" complex.
When all that sh*t is but a bad memory and we're still short, then we talk about the safety net and raising taxes....it's called prioritizing, every household does it when times are tight.

Who is calling for this kdog? (none / 0) (#17)
by Militarytracy on Fri Jan 14, 2011 at 11:32:41 AM EST

The rating agencies.....Wall Street


: Hence the rub... (5.00 / 2) (#19)
by kdog on Fri Jan 14, 2011 at 11:39:10 AM EST

cut Grandma's meager SS, just keep your government hands of our Wall St. welfare checks!

This is impossible (none / 0) (#30)
by Warren Terrer on Fri Jan 14, 2011 at 06:45:15 PM EST

Only be expanding the deficit can you hope to expand the social safety net given the massive US trade deficit. This is simply a matter of accounting.


Well, when I consider that if (5.00 / 3) (#20)
by Anne on Fri Jan 14, 2011 at 12:15:54 PM EST

the powers that be decided we "had to" fight another war somewhere, there would be no question by those charged with appropriating the funds for it about how we were going to pay for it; money would flow like water.

Apparently, the only "wars" we don't have money for and can't afford are the ones on the middle class, the poor and the old; there, it's just survival of the fittest, everyone for him- or herself, and if you die, you die.

This completely phony "urgent need" to reduce the deficit is coming from the same place that gave us the "reform" of the health "care" system - someone whose pockets are already overflowing with cash sees an opportunity for more.

"Restrictive fiscal policy" is otherwise known as "austerity," and it hasn't gotten good results anywhere it's being tried; "uniquely American" is not going to be a reason the results will be different here.

I sense an urgent need to fight terrorists (none / 0) (#23)
by observed on Fri Jan 14, 2011 at 12:24:58 PM EST

in the gas-rich country of Kazakhstan.


So the government can fund pipelines (none / 0) (#26)
by jeffinalabama on Fri Jan 14, 2011 at 12:54:50 PM EST

and jobs for Kazakhs. Wall Street will be extatic.

Hobo jungles? not so much.

I've started getting homeless students. They qualify for pell grants, but can't afford rent.


: Jesus (none / 0) (#28)
by Militarytracy on Fri Jan 14, 2011 at 01:42:44 PM EST

Well crap....maybe they can all hole up in and squat in a nice big foreclosure....and paint huge multi colored flowers on the front of it. I'm sick as hell of where leaning right and leaning Wall Street has driven us.

I'm not convinced. . . (5.00 / 2) (#24)
by RickTaylor on Fri Jan 14, 2011 at 12:52:47 PM EST

I'm not convinced that the deal is going to have that big an effect on the debate. Sure, the Washington Post is trying to use it to argue for austerity, but their arguments are not based on reality, and they'd be arguing just as hard if the deal never happened. Republicans are already backing off on their promise to cut spending, not because of budget projections, but because they understood the cuts that would have been required to keep those promises would be politically untenable.

I'm more concerned when Democrats who should know better up to and including the President embrace arguments about austerity. Their message should be that all that matters now is getting people jobs, that the best fix for the recession is getting people back to work, and that talk of austerity before that has happened is madness. We still wouldn't be able to get much through the House, but at least then there would be no doubt in peoples' minds who was on which side. Instead, their ceding the argument to Republicans, who are taking it and stamping everything Democratic with the adjective "Job Killing" including the health care bill.

Plutocrats scammin' (5.00 / 1) (#27)
by pluege2 on Fri Jan 14, 2011 at 01:36:04 PM EST

of course these are the very same rating agencies that gave super duper triple A rating to the banks scamming everyone with their home mortgage derivatives when everyone on the inside knew they were worse than worthless.

These scam artist rating agencies weighing in to support deficit sky-is-falling nonsense is all part of the scamming fear mongering class warfare of the rich on the 90% of Americans needing, and counting on the social safety net. The plutocrats are truly, truly despicable human beings.
.

Ratings agencies (5.00 / 2) (#29)
by Warren Terrer on Fri Jan 14, 2011 at 06:43:34 PM EST

should be abolished. At the very least they should be completely ignored. As pointed out above they were completely wrong about mortgage securities and derivatives. Their credibility should be zero.

In addition, they fail to realize that ratings on US government bonds are pointless. The US has a fiat currency and doesn't need to borrow money to finance anything. It CHOOSES to borrow as a relic of the gold standard days. Consequently there is no risk of default on government debt and no reason to worry about debt ratios.

Furthermore, the federal reserve has complete control over the entire yield curve if it chooses to exercise it. Interest rates are, in other words, whatever the federal reserve wants them to be and has nothing to do with the amount of government debt. E.g.

That sword has two very sharp edges (none / 0) (#33)
by BTAL on Sat Jan 15, 2011 at 08:09:03 AM EST

re: A fiat currency enabling a govt to not borrow but print itself into solvency.

As the largest consumer/consuming nation we would need all those monster SUVs to carry enough cash to buy a loaf a bread.


This is false (none / 0) (#35)
by Warren Terrer on Sat Jan 15, 2011 at 10:53:10 AM EST

Economists who have actually studied this recognize that inflation will not result from the government fully exercising its sovereignty over the currency. This isn't about the government printing its way to solvency, since a government with a fiat currency is at all times 100% solvent.

Moreover, it is down right immoral to be worrying about inflation and deficits when unemployment is running at well over 8%.


There have been many many (none / 0) (#36)
by BTAL on Sat Jan 15, 2011 at 01:43:27 PM EST

countries who have tried that. It also is normally accompanied with revaluation/devaluations in attempts to deal with either inflation and/or import/export pressures. It never ends well. Again, as the largest consumer economy, pumping the dollar via the printing press will result in imports becoming vastly more expensive driving inflation and less purchasing power.

The country might be "solvent" in a cash rich/availability perspective but the value of said currency falls through the floor.


: Whatever n/t (none / 0) (#37)
by Warren Terrer on Sat Jan 15, 2011 at 03:15:28 PM EST

: Look (none / 0) (#38)
by Warren Terrer on Sat Jan 15, 2011 at 03:26:25 PM EST

You're just espousing the same old Republican nonsense that government spending = inflation, which nonsense only gets trotted out when a Democrat is in the Whitehouse. Republicans don't even believe it, because they never worry about deficits when a Republican is in the Whitehouse. So let's drop this nonsense right now.
I'm really not interested in engaging you further because I know you are a conservative who will only ever believe in neo-liberal economics, no matter how badly it has failed. So please don't address me further. Thank you.

Here's a question about cutting SS. (none / 0) (#1)
by observed on Fri Jan 14, 2011 at 11:02:21 AM EST

Suppose, for example, that the US goverment decides to stop paying out SS completely, tomorrow (of course this wont' happen, but just for the sake of argument assume it will).
Do SS recipients have any legal recourse?
After all, they paid into the system and were promised retirement money later.

Can the American people sue (none / 0) (#4)
by Militarytracy on Fri Jan 14, 2011 at 11:10:59 AM EST

the Federal Government or maybe George Bush and Barack Obama for continuing to cut taxes while stuffing Social Security full of IOUs and leveraging it against all the debt they are creating? People have paid in the money to Social Security, but politicians have cut taxes back to insane levels for the rich while they spend the funds in Social Security and stuff it with IOUs that now they don't want to pay in order to cover their asses....they are spending the money of the poor to make the rich richer.


If you want to sue (none / 0) (#5)
by jimakaPPJ on Fri Jan 14, 2011 at 11:14:52 AM EST

re SocSec... be sure and include LBJ's ghost..

seeing as how the lock box was unlocked by him.


Well anybody could have closed it (5.00 / 1) (#7)
by Militarytracy on Fri Jan 14, 2011 at 11:17:32 AM EST

up since, but they get laughed off the stage for making such wild suggestions. Because people don't even bother to understand what the phuck is going on. Every President since LBJ wears this shame, but some had agendas of destroying Social Security and knew this was going to help.


I'm sorry (5.00 / 1) (#11)
by Ga6thDem on Fri Jan 14, 2011 at 11:28:48 AM EST

but I have to snort when conservatives say this. They are the ones who laughed when Al Gore said he wanted to put SS in a lock box.


Yup....they did (5.00 / 1) (#14)
by Militarytracy on Fri Jan 14, 2011 at 11:31:49 AM EST

And the left let them get away with it, and now we are complicit because this is our President and our Senate and it was even our House....and we saved Wall Street instead of the people.


I sniffle a little bit (5.00 / 2) (#16)
by andgarden on Fri Jan 14, 2011 at 11:32:12 AM EST

when I think about what we could have gotten.


What conservative are you (none / 0) (#25)
by jimakaPPJ on Fri Jan 14, 2011 at 12:54:00 PM EST

referring to?


A couple of guys from the Heritage (none / 0) (#31)
by Harry Saxon on Fri Jan 14, 2011 at 07:50:33 PM EST

Foundation

The Heritage Foundation
"Lock Box" Schemes Will Not Solve Medicare's Real Financial Problems
by Peter Sperry and Robert E. Moffit, Ph.D.
Backgrounder #1387
July 31, 2000
Taxpayers should always beware of accounting gimmicks that would merely move funds from one federal budget account to another while claiming to reserve tax dollars for a specific purpose. This is especially true when it comes to Medicare, the financially troubled health care program that covers approximately 40 million senior citizens and disabled Americans. Some in Congress have joined President Bill Clinton and Vice President Al Gore in promoting as a remedy for Medicare's problems the establishment of a "lock box," whereby surplus tax dollars would be set aside in a safe place to accrue interest and be used for Medicare expenditures in the future. Taxpayers should indeed be wary.

Jude Wanniske

WorldNet Daily
Memo on the Margin
Jude Wanniski WND
Exclusive Commentary
Al Gore's lock box
Posted: November 1, 2000
1:00 a.m. Eastern
To: Bob Shrum, Gore campaign strategist
From: Jude Wanniski
Re: Weeping and Gnashing of Teeth
Vice President Al Gore is being advised, I see, to spend the last week of his campaign scaring the electorate about George W. Bush's "risky scheme" by which he would take part of the projected budget surplus and give it back to the taxpayers so they can invest it on their own behalf.
The Vice President says he instead would put that money in a "lock box," taking it out years from now when it is needed. There are of course a great many people who are afraid of risk-taking and perhaps there will be enough of them on Nov. 7 to elect him president. I've always doubted that Gore could be elected to the top office, though, because I believe the electorate knows deep down that all growth is the result of risk-taking. The only way the nation advances is by encouraging as much risk-taking as possible, even though there is much more failure than success. The small number who succeed, by producing a better widget or software, make life easier for the general population. It has always been so."

More details at www.newshounds(dot)com:

Click or ignore Me


Two different "lock boxes" (none / 0) (#32)
by BTAL on Sat Jan 15, 2011 at 08:04:43 AM EST

Medicare is an entirely different animal than SS when debating "lock boxes".

An SS lock box can be easily debated/defended. Medicare not so easily.

Finally, the use of "surplus" tax dollars is another divining qualifier.


: If we had a national health system (5.00 / 1) (#34)
by Harry Saxon on Sat Jan 15, 2011 at 09:07:19 AM EST

like most civilized countries, problems with Medicare would become irrelevant.

Hmmm (none / 0) (#6)
by TeresaInSnow2 on Fri Jan 14, 2011 at 11:17:25 AM EST

Not a lawyer or anything! but I would say no. No federal government program is guaranteed just because you paid your taxes for it.


: I would say no too... (none / 0) (#9)
by kdog on Fri Jan 14, 2011 at 11:20:56 AM EST

ya can't beat city hall.
But I like how you guys think!

No (none / 0) (#21)
by me only on Fri Jan 14, 2011 at 12:22:24 PM EST

Look up Fleming v Nestor. or


: Thanks (none / 0) (#22)
by observed on Fri Jan 14, 2011 at 12:24:11 PM EST

Jeez BTD, why are you being so (none / 0) (#8)
by andgarden on Fri Jan 14, 2011 at 11:17:47 AM EST

irresponsible? Don't you know that we are spending beyond our means? We have to balance the budget just like every household! Only PIGS deficit spend!

We must redeem ourselves.

And with what is happening to commodities (none / 0) (#12)
by Militarytracy on Fri Jan 14, 2011 at 11:30:19 AM EST

thanks to the huge juiced savvy businessmen, we now have food riots or the beginning rumblings of food riots in five nations this morning. This is due to quantitative easing but the Fed will argue for awhile longer until it gets worse that you can't prove that or it is some sort of fluke like everything else is right now. This will be Wall Street's and the Fed's global warming denial moment.

If President Obama ever thought he would go down in history as some kind of hero in Africa, by the time QE is done with the poor in Africa he will be NO HERO there.....ever

: Anyone (none / 0) (#15)
by Ga6thDem on Fri Jan 14, 2011 at 11:32:11 AM EST

who watched Obama w/r/t Africa knew there wasn't going to be anything from him the way he rolled his relatives under the bus.