How, in the midst of a massive unemployment crisis—when it’s painfully obvious that not enough jobs are being created and the public overwhelmingly wants policy-makers to focus on creating them—did the deficit emerge as the most pressing issue in the country? And why, when the global evidence clearly indicates that austerity measures will raise unemployment and hinder, not accelerate, growth, do advocates of austerity retain such distinction today?
An explanation can be found in the prominence of an influential and aggressive austerity class—an allegedly centrist coalition of politicians, wonks and pundits who are considered indisputably wise custodians of US economic policy. These “very serious people,” as New York Times columnist Paul Krugman wryly dubs them, have achieved what University of California, Berkeley, economist Brad DeLong calls “intellectual hegemony over the course of the debate in Washington, from 2009 until today.”
Its members include Wall Street titans like Pete Peterson and Robert Rubin; deficit-hawk groups like the CRFB, the Concord Coalition, the Hamilton Project, the Committee for Economic Development, Third Way and the Bipartisan Policy Center; budget wonks like Peter Orszag, Alice Rivlin, David Walker and Douglas Holtz-Eakin; red state Democrats in Congress like Mark Warner and Kent Conrad, the bipartisan “Gang of Six” and what’s left of the Blue Dog Coalition; influential pundits like Tom Friedman and David Brooks of the New York Times, Niall Ferguson and the Washington Post editorial page; and a parade of blue ribbon commissions, most notably Bowles-Simpson, whose members formed the all-star team of the austerity class.
The austerity class testifies frequently before Congress, is quoted constantly in the media by sympathetic journalists and influences policy-makers and elites at the highest levels of power. They manufacture a center-right consensus by determining the parameters of acceptable debate and policy priorities, deciding who is and is not considered a respectable voice on fiscal matters. The “balanced” solutions they advocate are often wildly out of step with public opinion and reputable economic policy, yet their influence endures, thanks to an abundance of money, the ear of the media, the anti-Keynesian bias of supply-side economics and a political system consistently skewed to favor Wall Street over Main Street.
Taken together, the various strands of the austerity class form a reinforcing web that is difficult to break. Its think tanks and wonks produce a relentless stream of disturbing statistics warning of skyrocketing debt and looming bankruptcy, which in turn is trumpeted by politicians and the press and internalized by the public. Thus forms what Washington Post blogger Greg Sargent calls a Beltway Deficit Feedback Loop, wherein the hypothetical possibility of a US debt crisis somewhere in the future takes precedence over the very real jobs crisis now.
Even President Obama’s new jobs plan—a long overdue break with austerity-class orthodoxy—has been pitched in the context of deficit reduction. Every debate over measures to improve the economy begins with the question “How much will it cost, and can we afford it?” rather than “How many jobs will it create, and how will it help the country?” Far from possessing the solution to our economic crisis, the austerity class represents a major impediment to finding one.
We need a revolution, don’t we?
We (the government) are spending about 22% of our GDP on “stuff.” Revenues (taxes) to the government are about 16% of GDP. There is a 6% yearly deficit. Creating jobs will grow GDP and bring in additional tax revenues which will reduce the deficit. Cutting the defense, homeland security, and intelligence budgets will reduce the deficit. The Republicans are all about destroying those programs which “promote the general welfare” and protect the people’s “prosperity.” All Republicans—all Republicans—are nasty human beings. And either stupid or evil.
….or both!!
The ‘Beltway Deficit/Go to War in Iraq/Impossible to Consider a Public Option/Impossible to Prosecute Fraudulent Bankstahs etc., etc., Feedback Loop’ has been around for 30-40 years.
Right now their favorite flavor is austerity. It will always be some version of eternal war and/or making sure no one in a class below them can ever challenge them.
It might be wise to consider voting for candidates from organizations other than the Corporate UniParty, such that other views can be heard.
It’s the Corporatist Party. Obama is a bought and paid member of that group.
It is not just Repubs doing this, as noted in the aritcle, and Obama truly believes this is what is called for. This is what he was made president to acheive.
Sacrifice for the many. It’s lemon socialism: Socialize losses for the Powers That Be and the wealthy; privatize profits for the same groups.
Imho, those figures (a 6% annual deficit if you go by GDP, or a 38% annual deficit if you go by government spending vs. revenues) don’t seem possible.
Where does that data come from?
GDP = $16 trillion per year, more or less. $16 x 22% = $3.5 T yearly budget, more or less. $16 x 16% = $2.5 T in taxes (revenues) per year more or less. $1 trillion yearly deficit, more or less. The percentages are reported by the OMB, Congressional Budget Office, most politicians, and most economists. Here’s an additional interesting factoid. The worlds total yearly GDP is $62 trillion, more of less. The U.S. has 5% of the worlds population, more or less. So, the U.S population owns 25% of the worlds yearly wealth production. That fact causes conflict between the poorer nations, most of the world, and the U.S.