Deficit Hawks

Daniel Gross has a good article in Slate pointing out the hypocrisy of the "deficit hawks". Here's the key bit:

A once-endangered species is staging a robust comeback: the deficit hawk. Hunted nearly to death during the Bush years, many varieties not seen in Washington in a decade are now perching on branches and dropping their wisdom. Look, there's the puff-chested congressional peacock hawk, frequently seen strutting about Sunday-morning-TV-show sets complaining about pork while emitting loud honks on the receipt of stimulus funds. The furrowed-brow warbler hawk (natural habitat: the op-ed pages) loathes deficit spending for the purpose of eliminating social injustice but loves it when the spending is used to finance military actions abroad. The blue-bellied partisan hawk nests in think tanks; it goes mute when members of its own party run the show but squawks loudly when opponents run up debt. On Nov. 3, birders sighted the rare skinny parrot hawk, which repeats back calls about fiscal probity. Said President Barack Obama on that date: "The government is going to have to get serious about reducing our debt levels."

Yes, deficits are large. But a lot of this debate is for the birds. It's not uncommon for senators of both parties who oppose health care reform on the grounds that it is fiscally irresponsible to call for the elimination of taxes on the estates of the ultrawealthy.

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But there's a larger reason we shouldn't let the deficit hawks ruffle our feathers: As the volume of squawking has risen, the situation has actually become less dire. And even without drastic action, the situation will improve materially in the coming year.
Much of the horrific explosion in the national debt—the deficit soared from $248 billion in 2006 to $1.4 trillion in the recently concluded Fiscal Year 2009—can be pinned on cyclical factors. When the economy goes in the tank, it creates a fiscal double whammy, gutting tax receipts and boosting demand for government spending programs that are both ordinary (increasing unemployment benefits) and extraordinary (bailouts, stimulus). Spending rose 18 percent and revenues fell 16.6 percent in fiscal 2009—the worst decline seen since the 1930s, with corporate income taxes plummeting 55 percent. Had revenues been steady, the deficit would have been only (only, he said) $1 trillion.

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Being obsessed with deficit reduction when the economy has suffered its largest setback since the Depression is like being obsessed with water conservation when your house is on fire—an admirable impulse, poorly timed. [emphasis added]

What drives me crazy is the right wing fanatics who took the Clinton surplus and gave it away in two big tax cuts for the ultra-wealthy. That set the US up for the current deficit "crisis". The simplest way to eliminate the deficit is to reintroduce the same tax rate for the ultra-wealthy that was in place under the Republican Eisenhauer: 94%. That would eliminate the deficit. (I'm not being serious about putting in a 94% tax rate, but I'm making the point that there is a "deficit crisis" only because Americans are loathe to pay for their government. They act like consumers who declare that $3 a gallon gasoline is a crime against nature and that they will only pay the price of the 1950s, twenty cents a gallon. Nutty. If you want to drive a car, you have to pay the going rate. If you want to have a civilized society, you have to pay for a sound government.)