For most of my adult life, the United States has been saying that the national debt is something we HAVE to DEAL WITH!!!! Forty years is a long time for the biggest, baddest country on earth to fail at something. Why have we failed? Because it’s really just a political ruse (Is there any other kind?). The fiscal cliff is just the latest failed gimmick.
The only reason for a “fiscal cliff” is to force the Congress to put in place a long-term plan for reducing the national debt. It’s like a fad diet for a fat person. It’s a gimmick. A gimmick doomed to failure. Look what happened. We stressed, we covered it in the media, and we collectively spent hours wringing our hands. Yet, instead of reducing the national debt, the deal that passed Congress late Tuesday night will add $4 trillion to the deficit over the next 10 years, according to the nonpartisan Congressional Budget Office.
Not the First Rodeo
This last effort to reduce the long-term debt is not the first rodeo with which we cowboys have tried to tame the bronco that is our national debt. In the 1980s, we tried the Gramm-Rudman-Hollings law. If the federal budget missed its deficit-reduction targets, the law triggered across-the-board spending cuts (“sequesters”).
It never happened. Congress exempted 70 percent of the budget from sequestration.
A number of candidates have tried to run for president on a platform of deficit-reduction. They all failed. Vice President Walter Mondale in 1984: “Ronald Reagan will raise your taxes. So will I. He won’t tell you. I just did.”
And we all waved buh-bye to Mr. Mondale and his candidacy crashed like the Hindenburg.
Senator Paul Tsongas promised tough love in 1992. He declared that he was “not running to be Santa Claus.” His opponent in the Democratic primaries, Bill Clinton, proved that Santa Claus is a popular fellow.
Ross Perot ran on the deficit issue in 1992 and got 19 percent of the vote. Clinton believed Perot had created a constituency for deficit reduction. So as president, Clinton raised taxes in 1993. And the Democratic Congress got wiped out in 1994.
Congress came close to passing a balanced budget amendment to the Constitution in 1995 by declaring the deficit unconstitutional! That debacle would have inserted federal judges into the budget process for the first time.
We’ve had numerous top-notch commissions charged with figuring out how to reduce the deficit. All three decided on a combination of spending cuts and tax hikes. The National Economic Commission delivered its report in 1988. The issue got buried when new president George H.W. Bush got elected on a pledge of “Read my lips: no new taxes!” The Kerrey-Danforth Commission even gave it a shot with their recommendation in 1994. The recommendations were unceremoniously trashed when a Republican Congress got elected for the first time in 40 years.
Bill Clinton managed to give us a budget surplus by the time he ended his second term, but it was short-lived as his successor, George W. Bush quickly raised the deficit $5.3 trillion by giving two rounds of unnecessary tax cuts and starting two unnecessary wars. In comparison, President Obama has only raised the deficit by $1.4 trillion while dealing with the worst Recession in history.
Lastly, Congress set up the Simpson-Bowles Commission during the 2011 debt ceiling crisis. This panel recommended, of course, a hefty mixture of spending cuts and tax increases. But the report didn’t even get enough support from even its own members to force Congress to vote on it. In its place, we got . . . the fiscal cliff! Ah yes, automatic spending cuts and tax hikes that would go into effect this year if Congress still had not passed a debt-reduction plan.
“We gotta figure out,” Senator Carl Levin (D-Mich.) warned after the debt ceiling debate, “how to avoid the train wreck we put in there to avoid the first train wreck.”
That’s precisely what the most do-nothing Congress just did; at the last possible second. It didn’t pass a solution. It passed a patch. A band aid for a gaping wound. It did nothing.
Was Anybody Even Watching?
Why does this scenario keep happening again and again, year after year, Congress after Congress? Because the American public, (absent a few RWNJ and the GOP that depends on their rabid, low-information, obsessive viewership) doesn’t understand nor panic over the debt. They probably know it’s a problem. They probably know it needs a solution. But it’s not an approaching crisis. Voters are not saying to officeholders, “Please! For God’s sake, do something about the debt or it will be the end of democracy! Anything! Raise our taxes! Cut Medicare spending! Do whatever it takes, but get this problem solved!”
To the contrary, officeholders hear from voters: “If you dare raise my taxes, or cut Medicare, or Social Security we’ll throw your ass out of office!”
The national debt is really an establishment issue. Wealthy Banksters on Wall Street and politicians in Washington worry about it. A lot. Republicans demand austerity, for everyone but themselves and their wealthy donors of course. They want to tell the other people, “Do without! Pay up! Starve! Quit being lazy bums!” This while the just ended 112th Congress worked a grand total of 129 days out of the 365, passed the lowest number of bills in history, did not pass a jobs bill on which they campaigned and won overwhelming approval for in 2010. No, The House voted 34 separate times to repeal ObamaCare. They voted over 40 times to change the names of Post Offices. That left at most, 56 opportunities to vote on something involving jobs, yes?
No. Various and sundry bills included demanding repayment from the U.N., elimination of public financing for elections, temporarily extended the Patriot Act, eliminated funding for Planned Parenthood, Barred new regulations for Greenhouse Gasses, Banned Funding for NPR, Banned funding for Salaries under ObamaCare, Approved 1099 changes for Businesses, Approved School Vouchers for D.C. Schools, Banned…well, you get the idea.
That’s never going to work in a populist political culture. It was much easier to impose austerity measures in European countries that have elitist political cultures. But look at what has happened in the Euro zone and the UK. Economic disaster. Double-dip recessions where recoveries had begun. Political meltdown. Governments falling left and right. Rioting. Depression-era unemployment in Spain, Italy, and Greece, with Portugal, Ireland, and others on the brink.
Let me say one more time. Austerity has Never ever worked in reviving an economy in a slow-down. It turns recoveries into recessions and recessions into depressions. Austerity can only work if implemented during a growth cycle and that’s a tough sell too.
The fiscal cliff did accomplish something. It forced Congress to raise tax rates for the first time in nearly 20 years.
It worked because President Obama had a clear public mandate on his side. Obama had run for re-election on a promise to raise taxes on the wealthy — and every poll showed strong public support for doing just that.
The vast majority of American voters consider themselves middle class. What they mean by that is simple: “Neither rich nor poor.” So the public thinks it’s O.K. to raise taxes on the rich. It means, “not me.”
Every gimmick to reduce the debt in modern times has turned the national debt into a crisis. But the majority of voters know the crisis isn’t real. It’s a self-made calamity by our esteemed members of Congress whose sole focus is their next election so that they can keep what they want to deny every other American. Safe, secure, cushy jobs, where they get to lie, plunder, gouge, and pander for money…big money….and lifetime pensions and healthcare. So if we can’t raise taxes or cut spending enough to get the deficit under control, what can we do?
The answer is simple, and painless. The deficit did disappear for four years (1997-2000). The economic boom of the late 1990s caused tax revenues to pour into the Treasury so fast that the country ended up with unexpected surpluses. In the 2000 campaign, Al Gore wanted to put the money into a “lockbox.” George W. Bush promised to give it back to the people — and he did. He gave $1.4 trillion in tax cuts. He spent $2.8 trillion of wars in Afghanistan and Iraq, turning a surplus that could’ve been used to pay down debt into a turnaround of $4.2 trillion dollars. Now that’s spending.
There’s really only one way to reduce the deficit. Growth. Bill Clinton knew it. Even Ronald Reagan knew it because he raised taxes 11 times to spur growth.
President Ronald Reagan knew that way back in 1985, when he said in his State of the Union speech, “The best way to reduce deficits is through economic growth.” It worked for Reagan in his second term. It worked for Clinton in his second term.
Unfortunately for President Obama, neither Reagan nor Clinton had Republican imbeciles in the House of Representatives that insisted on shooting themselves in the foot and allowing some far right radical loony-tunes frighten sensible Republicans into doing what their base has perfected: voting against their own interest.