Irony Alert #2 Posted by: McQ
on Sunday, January 11, 2009
Wow - two in one day.
Digby provides this one over at good old Hullabaloo. The subject is a film shown on CNN which Digby obviously believes to be nothing short of propaganda. The film, "I.O.U.S.A", discusses our fiscal problems, focuses on the debt and essentially says that we're headed for a economic meltdown unless we get a handle on the deficit and the debt.
As Digby sees it, that's heresy and those advocating that sort of thinking are "deficit obsessives":
I suspect that people who read this blog know why that's deeply dishonest and why the timing for this crusade couldn't be worse. It's obvious to those who are following this story that what's required to avert a far worse recession and quite possibly a depression, is for the government to do the opposite of what these deficit obsessives say must be done. But I don't think everyone in the country has that understanding.
So we have a royal disagreement between the "deficit obsessives" and the deficit spenders. There's a surprise.
The irony? The following two paragraphs. First:
The sainted Bill Breadley [sic] said it right out on the program:
People understand that if they run up debts in their own lives, it's no different than when the government runs up debts the same way.
Americans have been mentally trained over the past few decades to believe drivel like that—- the free market is always the preferred method to solve economic problems, that the government should be run like a business (or your household budget) and, most importantly, that government is the cause of problems, not the solution. This deficit obsession plays into all those beliefs and makes it very difficult to explain in the middle of the crisis that the government isn't a business or a household and needs to go further into debt in periods when everyone else is trying to escape it. And, needless to say, it also sounds like the tax 'n spend libruls are at it again.
Got that? The government is not the cause of problem and is instead, the solution. That's the entire point of Digby's sarcasm here. We poor dupes have been "trained over the past few decades to believe drivel like that", but Digby has seen through it and the opposite is the "truth". We should be spending like drunken sailors, because government is the solution.
OK? Everybody on board?
Then in the very next paragraph Digby writes:
I'm sure it hasn't escaped anyone's notice that the deficit scolds are coming out of the woodwork now that the Republicans brought us to the brink, slashing taxes for the wealthy, larding their own contributors with earmarks, solidifying the notion that military industrial complex spending is a sacred, untouchable icon, and fetishing and deregulating the market until they finally brought the whole system to its knees. They certainly didn't say much about the debt while it was adding up these last eight years.
WTF? So government (but under the Republicans, of course) was the problem? It wasn't "the solution"? The claim, per Digby, is that Republican deficit spending is responsible for bringing us "to the brink", correct?
The old trying to have it both ways dilemma.
Heh ... but not to worry - apparently Democrat deficit spending is somehow different and will fix everything. The effect will be completely different, just you wait and see. And now, if it fails, it certainly won't be government's fault. No sir. Because, you know, government is the solution. You betchya.
Got that? The government is not the cause of problem and is instead, the solution. That’s the entire point of Digby’s sarcasm here. We poor dupes have been "trained over the past few decades to believe drivel like that", but Digby has seen through it and the opposite is the "truth". We should be spending like drunken sailors, because government is the solution
I’m going to take a contrarian view here and defend Digby. He wasn’t saying that government is always the solution. And the call for some spending in a crisis isn’t the same as spending like drunken sailors.
We can even say as a general rule that it’s usually best for the market to work itself out. But we can also say in good faith that sometimes the government needs to act and needs to run up a deficit. The question is when and how.
We ran up deficits in the 1980s as increased military spending dealt a death blow to the Communist bloc. Few would argue the benefit of that outcome wasn’t worth the debt.
I’ll even go as far as to argue that the financial bailout — insofaras it kept our currency from collapsing — was both necessary and a proper function of government. That doesn’t mean I like the proposed bailout of the auto industry, or Obama’s stimulus plan.
I was more struck by the irony in the claim that government isn’t the problem, it is the solution followed by the paragraph that laid the blame for the present problem at the feet of the present government.
"Americans have been mentally trained over the past few decades to believe drivel like that—- the free market is always the preferred method to solve economic problems, that the government should be run like a business (or your household budget)"
Here’s another problem: Companies also borrow money and "deficit" spend sometimes, though they cannot do it indefinitely like the Federal government can.
Also, the government should not be run like your household at all, except to say that it should save more money in good times. In bad times, households often scrimp and save, but its not easy for the government to do this (F-16’s will now only carry cheaper Chinese missiles?) and when the private economy is hurting, its wise for the government to NOT suddenly cut back, too. Plus government programs like unemployment will be in high use during downturns.
Now technically, I guess a household could have direct deposit savings and already have enough savings to not save and scrimp during hard times and that would be the goal of government as well, but neither usually happens.
WTF? So government (but under the Republicans, of course) was the problem? It wasn’t "the solution"? The claim, per Digby, is that Republican deficit spending is responsible for bringing us "to the brink", correct?
The way I always thought of deficit spending was that it was neither a good nor bad thing, it was the context that made it good or bad.
When you have GDP growth of 3%, deficit spending is very bad, when you have negative GDP growth, deficit spending is very good.
Whether the deficit spending in negative growth periods is reduced taxes, public works spending, or both, it’s the right time for deficit spending.
Our current problem is that we had massive deficit spending during a period of significant GDP growth, which makes it that much more painful to do what must be done now, in a period of negative growth.
Here’s the thing, if defecit spending was necessary to keep the economy the growing for the last 8 years, then we are in much worse trouble than anyone suspects, because that would mean that the future holds on two variations, massive borrowing and hugely massive borrowing. If the deficit spending for the last 8 years was necessary, America is bankrupt, all that’s left is for the notes to be called.
But I don’t think this is the case, I think that the deficit spending of the last years was just really, really poor and shortsighted leadership, that had no thought of future needs.
So yes, you can simplify it to the basic assertion that Bush’s deficit spending (other than the early recessionary deficit spending) was bad, and Obama’s deficit spending in the face of negative GDP growth is good.
I’ll expect disagreement on how the deficit spending should be applied, but is there anyone that seriously thinks that NOW is the time to try and balance the budget?
But I don’t think this is the case, I think that the deficit spending of the last years was just really, really poor and shortsighted leadership, that had no thought of future needs.
It funded government expansion - bad use.
So yes, you can simplify it to the basic assertion that Bush’s deficit spending (other than the early recessionary deficit spending) was bad, and Obama’s deficit spending in the face of negative GDP growth is good.
It’s the magnitude. Trillion dollar deficits? Possibly $2 Tillion, if there is a $750B+ stimulus. Call me a cynic, but I think some may use the recession and financial crisis to borrow and pay for unneeded government spending and programs. Thus, the trillion dollar deficits, if they materialize, would be grossly in excess of what is really needed.
