All those popping sounds you’ve been hearing recently are Republican eyeballs after looking at current budget deficit projections.
A budget deficit that was more than 10 percent of GDP in 2009 is on track to be about half that this year. “The federal budget deficit is shrinking rapidly,” writes Jan Hatzius, the chief economist of Goldman Sachs, in an April 10 report. Goldman estimates that in the first three months of 2013 the deficit was running at 4.5 percent of GDP, and they forecast a deficit of 3 percent of GDP or less in the 2015 fiscal year.
The Democrats’ staggering inability to extol the inarguable virtues of the 2009 stimulus package is on my top-20 list of the worst instances of political malpractice in the 21st century.
Sometimes a graph really makes the entire argument for you.
One of the more interesting questions of the Obama era is: could Obama somehow have gotten along better with Republicans, or was it a doomed cause from the outset? Jon Chait looks at the question from a few angles and basically concludes he couldn’t have, which I think I agree with. Obama could hardly have offered the right any more of a carrot to cooperate with him, as we now know that the Administration even worried about what right-wing talk show hosts thought about them. Such obsessive carefulness might actually have made bipartisanship less likely–Republicans learned quickly that they could walk all over Obama and suffer no consequences. As soon as Obama figured out that he couldn’t let them do that anymore, his position and public standing improved immediately.
To me, the most painful failures of Obama’s tenure have been failures of pragmatism, far more so than failures of liberal ideals. The latter you expect to some extent, as it’s the nature of governing. I honestly was fine with dropping the public option if that was what was needed for the bill to pass, and I still feel that way. Of course, I would rather have had a cap-and-trade bill be priority #1–it actually got eight Republican votes in the House and the problem was more urgent, the benefits easier to sell, and the timing was right for the issue. I don’t think you can really get wholesale health reform until the current system has gotten much more broken than it is now. Too many people don’t want the status quo to be changed or even threatened. But that’s not what happened, and despite the lousy political spadework that led to it I like the ACA just fine.
If moderation just to get things done were the predominant paradigm I’d probably be more unreserved in my support of Obama, but I don’t really think that’s the theme of the man’s presidency. Really, the overarching theme has been that Obama is trying to do two different types of reform at the same time that are fundamentally incompatible. He’s tried to reform policy while also trying to reform the process, and has seemed to be equally invested in fixing both. But generally speaking, you can only do one or the other, at least at once. In the stimulus, in healthcare, and in the debt ceiling–which I’d argue are the three defining moments of Obama’s presidency to date–what you see are on one hand a commitment to solve big, real policy problems of varying degrees of immediacy, coupled with an equal commitment to fix the process by renewing bipartisanship, fixing problems together, adopting a civil tone, avoiding attacks and hardball tactics and all that. The thing is, pursuing the procedural goal made the policy more difficult, in some cases, much more difficult. Obama has tried to have it both ways, pursuing an incredibly ambitious reform agenda while somehow not worsening partisan divisions or irritating established interests. At times it’s almost been as though no conflict was expected to arise from all this activity, and when it came, paralysis set in. I don’t see how very smart people convinced themselves repeatedly to see possibilities that weren’t there–perhaps just wanting to have these opportunities was enough. And so we actually lose popular, important policies because there is a strong desire not to have to play a partisan role, rather than just accepting that some level of partisanship is unavoidable. That is not pragmatic, it’s desperation to avoid the practical reality that Obama has no choice but to work in. And the effect on morale was devastating, as the 2010 results and the president’s standing for most of last year showed.
The point I wish to make here is that this isn’t pragmatism. In fact, I don’t see Obama as a particularly pragmatic figure. A pragmatist would have given up on cooperation from Congressional Republicans ages before Obama did, probably after the stimulus, and just figured that the only way to get Republican support would be to either shame or strongarm Repubs into backing his policies. Really, what we’re dealing with is a reformer whose idealism, attention to process and distaste for partisan argument frequently has led him in decidedly nonpragmatic directions. Republicans savvily realized this and capitalized on it, so that the conversation was all about them even when they were a small minority. Really, that covers most of what’s been going on the last three years. Let’s hope it doesn’t define the rest of Obama’s time in office.
Turns out Texas was the state that depended the most on [funds from the federal stimulus bill] to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures. Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.Yep, you read that correctly. God-fearing, gun-loving Texas used eeee-vil stimulus funds to plug 97% of its 2010-2011 budget shortfall. All this after possible secessionist Governor Rick Perry when on a big whinefest in the national media about how Texas could take of itself, thank you very much:
When he made a show of rejecting some Recovery Act money, Perry said “this was pretty simple for us…We can take care of ourselves.” As The Wonk Room explained, in addition to filling nearly his entire budget gap with Recovery Act funds, Perry also used the Build America Bonds program — created as part of the Recovery Act — to fund billions of dollars in infrastructure projects. He also grandstanded against — and then promptly accepted — federal funding meant to prevent teacher layoffs.
A year ago, in one of my first guest posts here, I cited a Cato blog criticizing the stimulus’ Cash for Clunkers program as one of the dumbest ever. Some objected to the critique–for instance the first commentator termed it “right wing whining” and asked for an automated way to skip reading my posts.
Unfortunately this week the data are in, and the predictions were correct. For those of us living in the world of reality-based economics, Cash for Clunkers is a classic government folly.
I’ve always been a fan of E.D. Kain. I discovered him over at The League of Ordinary Gentlemen and he now writes for my favoritest blog eva, Balloon Juice. He’s one of the few remaining lights of sanity in the otherwise inky blackness of conservative thought these days.
Just to illustrate for you how neat I think he is, consider the fact that today he exposed me to a new idea that I had never come across . That so rarely happens! Check it out – very thought-provoking:
Essentially Krugman is arguing for a larger stimulus. The one we got, he argues, wasn’t big enough. All it did was patch some holes in state and local budgets rather than go the next step and actually stimulate the economy. This is true as far as I can tell. I would gladly support more stimulus spending especially. I think we’re in essentially a balance-sheet recession. More spending makes sense especially at the interest rates Krugman is talking about. During a recession high levels of government spending can help turn around the economy; I think that keeping taxes as low as possible during a recession makes sense for similar reasons.
What worries me is that there really are structural problems that may get swept under the proverbial rug when stimulus dollars come in to bail out state and local governments.
Take Arizona, for example. Like Colorado Springs, Arizona has been under the sway of a bunch of anti-tax zealots. (They’re zealots for other reasons, too, but we’ll talk about that some other time.) In any case, low taxes are much more important to the legislators in Arizona than actually governing. So we get laws allowing concealed weapons to be carried without permits, but we can’t manage our budget even well enough to remain in possession of our own Capitol building. Our legislature refuses to raise taxes even though it means we have to let a bunch of state parks go to gravel – despite the fact that state parks are a major part of the tourist industry in Arizona. And while some states face real problems with overly powerful and entrenched teachers’ unions, Arizona is not one of them and yet still plans to cut millions from public education.
The anti-tax ideology is so deeply ingrained here that Jan Brewer, of all people, had to lead an effort to get a measly 1-cent sales tax passed by voter ballot – which it did, by a reasonably wide margin. There is some disconnect, I suspect, between the voters and the legislators here. I’m not sure it’s enough to throw the bums out, but I hope it is.
So I take Krugman’s point on the anti-government rhetoric being a driving force behind some of the structural problems facing the country. What I worry about in these instances is that all these stubborn, ideological lawmakers who refuse to raise taxes will end up taking a bunch of stimulus money and not having to own up to their own politics. They get bailed out. They get to slash spending on basic services, keep taxes low, and still get the money they need. Then what? They get reelected and do it all over again.
What an interesting point. I can definitely see where he’s coming from, although it kind of strikes me as a case of punishing a girl after she gets pregnant. Done deal, right? My first inclination would be to deal with the pressing problem at hand and then worry about the long-term ramifications afterward. I must ponder on it some more.
More responsible conservatives calling for tax increases please!
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