We Need To Get The Deficit Under Control — But, Not Now?

09 Apr, 2010 by John Hawkins

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Getting government spending under control, like securing the border, is something “everyone” supposedly agrees on. Whether they’re liberal, conservative, Republican, Democrat — it doesn’t matter — every politician insists:  he’s:  : the one you can trust on the budget.

Yet, what do we get in practice? Bad (The Republicans) and much, much, much worse (The Democrats). Despite the fact that Democrats like Barack Obama talked incessantly about getting spending under control, you have to go all the way back to FDR to find a President who has spent money like Obama — and in FDR’s defense, he was at least using the money to win a worldwide war against Nazism. Meanwhile, we’re spending that kind of money to create government jobs, prop up the unions at GM and Chrysler, and to pay off the Dems ‘:  campaign donors at the big banks.

You may be thinking, “All true,:  : John, but this is boilerplate. We’ve heard it all before. So, why are you writing about it again?”

Simple, because I’ve read not one, but two articles today that feature supposedly “responsible” people calling for deficit reduction, but deficit reduction that doesn’t occur now.

First, here’s Douglas Elmendorf from the CBO:

“U.S. fiscal policy is unsustainable, and unsustainable to an extent that it can’t be solved through minor changes,” Congressional Budget Office (CBO) Director Douglas Elmendorf told reporters at a Christian Science Monitor breakfast.

…“Unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth,” Bernanke said in a speech Wednesday.

…Elmendorf cautioned against a fiscal retrenchment that is too quick and could hamper an economic recovery. The deficit levels are expected to drop from 10 percent this year to nearly 4 percent within four years, “the most rapid withdrawal of fiscal stimulus since the Second World War,” he said.

The ideal timing for deficit reductions would be “at some point beyond the next few years,” he said.

So, Douglas Elmendorf wants to get spending under control — just not now. Then, there’s Federal Reserve Chairman Ben Bernanke:

“The arithmetic is, unfortunately, quite clear,” Bernanke said. “To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above. These choices are difficult, and it always seems easier to put them off – until the day they cannot be put off anymore.”

He said a “sharp near-term reduction in our fiscal deficit is probably neither practical nor advisable,” but that a long-term plan for fiscal sustainability could help to lower interest rates and borrowing costs, and even stimulate economic growth.

In other words, the same jackass who supported the bailouts and the stimulus, yet was caught with his pants down by the housing bubble, is saying “unsustainable budget deficits” are coming, but he doesn’t want to do anything about them now. That’s the exact same thing Elmendorf is saying, isn’t it? What a coincidence!

Meanwhile, people like Jim DeMint and Paul Ryan, who actually want to start dealing with the defining issue of the next few decades today, before the whole financial house of cards we’ve built for ourselves comes crashing down, are relentlessly vilified.

Here’s the reality: You can talk about “unsustainable budget deficits” all day long, but if you’re not for getting spending under control RIGHT NOW, you’re part of the problem, not part of the solution.