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BREAKING! Republicans Don’t Care About Deficits

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simpson-bowles

Here’s another key takeaway from the story about the Freedom [sic] Caucus I referenced earlier:

Republicans in the House Freedom Caucus may be shifting their uncompromising, tough budget stance under President-elect Donald Trump, according to a report in the National Review.

According to the piece, there is discussion underway to accept that just 50 percent of Trump’s infrastructure bill would have to be offset with spending cuts elsewhere– a precedent that they never would have accepted under President Barack Obama.

After Trump was first elected, members of the House Freedom Caucus were vocal about their opposition to some of Trump’s costly legislative priorities like a $1 trillion infrastructure bill.

Needless to say, by “50%” they mean “0%.”

Republicans are going to massively cut upper-class taxes, and they will dole out some more gooodies to business. They will cut social programs, perhaps quite drastically, but not by nearly enough to pay for the tax cuts. And they just don’t care.

To dream in technicolor for a minute, perhaps the next time (if any) Democrats take over the federal government again, they will remember this. Under the current partisan configuration, caring about deficits makes you a massive sucker. All that cost trimming done to make the ACA fiscally responsible? All gone. Even if some elements of the program survive, the tax hikes are gone. And if the subsidies had been more generous, the better parts would be more likely to survive. It was bad politics and accomplished less than nothing substantively in the end. When Dems get power, they should pass what programs they think need passing, raise whatever taxes can be raised, but don’t worry about deficits. Republicans don’t care, and more importantly whatever voters think in the abstract they don’t care in practice either.

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  • (((Malaclypse)))

    Needless to say, by “50%” they mean “0%.”

    Let’s be fair. They’ll certainly use paying for Trump’s kickback-fueled infrastructure bill by gutting the safety net even further. That will get you well above 0.

  • Dilan Esper

    Really? Was Clinton a sucker for caring about the deficit? I could have sworn that the economy boomed in the 1990’s as Clinton reduced government borrowing as a share of GDP and the Fed responded with interest rate cuts to move money into the private sector.

    Except in recessions, it happens to be good policy to pay for your programs.

    • econoclast

      Arguably that was Alan Greenspan blackmailing the Clinton Administration, and they could have cut rates anyway. Cutting the deficit definitely didn’t do anything to hurt the economy, though.

    • Lurks

      The way an old conservative friend tells it to me, the boom in the 1990’s was because Gingrich and the Republicans were keeping Bill’s spending-like-a-drunken sailor tendencies in check.

      Ah, revisionism.

      I’m still waiting for an answer about financial reverses from 2001-2008 under Republican rule and majority, but I’m pretty sure that will be explained in Hot Tub Time Machine 2: Thanks Obama!

      • tsam

        I seem to remember that Obama hadn’t even taken office when Fux News began referring to the crash as the “Obama Recession”. No fucking shame in these bastards.

      • CrunchyFrog

        No, no, no. Your conservative friend really needs to pay more attention to the NeoNazi sites he reads.

        > The Clinton Boom of 1995-2000 was caused by the 1981 Reagan tax cut.

        > The Bush crash in 2007-2008 was cause by the Clinton tax increases in 1993. And Obama. Somehow always Obama.

        At this point there isn’t even a pretense of trying to make the arguments logical. They know no one in the mainstream press cares, they’ll just report whatever argument the conservatives make verbatim without comment.

        • mds

          The Bush crash in 2007-2008 was cause by the Clinton tax increases in 1993.

          There was actually enough blame to go around to take in Barney Frank (member of powerless House minority party) and Jimmy Carter, for signing the Community Reinvestment Act in the first place.

          And Obama. Somehow always Obama.

          Well, the reason the CRA cratered the economy was because it forced banks to lend money to unqualified black people. Barack Obama is an unqualified black person. QED.

          • Rob in CT

            There was actually enough blame to go around to take in Barney Frank (member of powerless House minority party) and Jimmy Carter, for signing the Community Reinvestment Act in the first place.

            My father bought that hook, line and sinker.

            Because he wanted to, of course. It made no sense if you actually tried to work through it. But as a quick “it was actually the liberals’ fault!” answer it worked juuuuust fine. He got it from Fox and that was that.

          • Lurks

            Thanks for reminding me about the CRA. Said friend has indeed brought that up. But not for awhile, since Obama has generally been sufficient to cover all sins.

            But you’re right. If there is a Democrat in office at any point during your lifetime, anything bad that happens can be laid at their doorstep. Conversely, good things are always the result of past Republican decisions, even if they take geologic eons to be fully realized.

            I’m quite sure that when democracy and prosperity finally arrives in Iraq in 2215, cyborg Cheney someone will say it was all because of Bush.

            • Rob in CT

              The more sophisticated version alleged that changes made by the Dread Clinton in the 90s loosened lending requirements to Those People (via CRA) and in turn led to the crisis.

              The trick was to spread the blame between the two prior Dem Presidents. Oh, and of course Barney Frank and Chris Dodd (not that I really feel like going to bat for Dodd).

              • CrunchyFrog

                I left the details about Frank and CRA out but certainly lived them here in wingnutopia. Of course, the reality is that repealing Glass-Stegel created a situation in which the people authorizing the mortgages had ZERO liability for writing a bad one and huge incentives to sell as many mortgages as possible to put into sellable packs of mortgages. So, very bad mortgages became the rule, not the exception. In the mid-2000s pretty much everyone who’d been in the industry for a significant time saw that this was a house of cards that was going to collapse, but few saw how big a crash it would cause. Mortgages were going to everyone who couldn’t afford them, including lots and lots of white GIs here in Colorado Springs. It had nothing to do with race or CRA (since 96% of the loans weren’t even subject to CRA regulations due to the 1999 changes).

                A similar thing happened less than a decade after removing regulations on S&Ls, you’ll recall. But we don’t learn. In both cases Democratic politicians were as enthusiastic as Republicans in creating the foundation for the crash.

                • rea

                  I got testimony under oath from a bank executive a few years back. Not really a direct quote, but in effect “We did not care about whether he could pay back the mortgage–all we cared about was that the paperwork was facially in order so that we could package it and resell it.”

            • efgoldman

              If there is a Democrat in office at any point during your lifetime, anything bad that happens can be laid at their doorstep.

              Well, that explains the mononucleosis I got for the summer of 1966.

              Plus my girlfriend dumped me.

              • Lurking Canadian

                Well, that explains the mononucleosis I got for the summer of 1966.

                Plus my girlfriend dumped me.

                Thanks, Obama.

    • malraux

      There’s a difference between paying for your programs and caring about the deficit. If you limit the size of the program because you want to limit the tax increases to keep it revenue neutral, that’s caring about the deficit too much. Make the program as large as it needs to be to work quickly, and then call on congress to raise tax rates.

      If you set up dedicated funding streams for a program rather than just using the general fund, arguably that’s worrying the deficit too much. Part of why the aca is hated on the right is the Medicare taxes on the rich. Would the aca be in as much danger if the rich didn’t need to strip some people of their insurance to get a tax cut.

      • efgoldman

        Part of why the aca is hated on the right is the Medicare taxes on the rich. Would the aca be in as much danger if the rich didn’t need to strip some people of their insurance to get a tax cut.

        Bullshit. They want to immisserate people. It’s what they do and who they are. Otherwise, why didn’t they work with Obama and Harry Reid to make it different/better.
        After all, the ACA got all those Republiklown votes, right? Remember all those votes? Why, tons of them. Might even have been greater than zero. But probably not.

        • MAJeff

          This.

          Conservatives not only accept, but believe deeply in hierarchies, which are moral structures in their world. The poor deserve to suffer because of their lower, immoral, status on the class scale. If they were morally better people, they would have risen up the class ladder.

          • CrunchyFrog

            They deserve to suffer … except ME. I AM *different*. I got food stamps and welfare and you didn’t see anyone helping ME – not like those n*****s on Obama Welfare.

            And that abortion? That was different too. *I* wasn’t a slut like those n*****s and Democratic whores. It just happened. So mine doesn’t count.

            • FlipYrWhig

              “*I* just needed a hand when I got in a jam. I needed to get back on my feet. I didn’t want to make a life of it, like Those People who lie around all day doing nothing.”

            • Plus, you tell anyone who will listen that anyone who does what you did is bad. So I think you’re OK.

              (Fictional you from your comment, of course.)

            • cpinva

              the cognitive dissonance with these people is sort of amazing when you think about it. they have to do this, to keep on believing, all evidence to the contrary notwithstanding, that they are better than those people. it’s Calvinism on steroids.

              • Keaaukane

                Calvinism or Calvinball?

              • petesh

                I’m not sure John Calvin would approved of PEDs, but it is a form of neo-hyper-Calvinism, with rules of course created by young Calvin.

            • JustRuss

              Yeah, it’s the hypocrisy that kills me–well, besides the sadism. My step-daughter’s father is a conservative Catholic who always votes R, and he’s a serial adulterer with at least 4 aborted pregnancies to his credit.

              Then there’s my Chamber-of-Commerce-type friends who concern-trolled the deficit through the entire Obama administration, and probably won’t mention it again until another Democrat is in the Whitehouse.

              I can’t help wondering if I don’t have my own inconsistencies of which I’m not aware, but I just can’t believe I’m at their level.

              • Rob in CT

                The really “fun” part will be when you complain about the GOP blowing up the budget and they come back with “I thought you LIKED deficits!” as if you’re the hypocrite.

                Because 2009 – economy in freefall and 2017 – economy on solid if not spectacular footing are exactly the same.

                *glug glug glug*

              • Wamba

                and probably won’t mention it again until another Democrat is in the Whitehouse

                I envy your optimism!

            • efgoldman

              They deserve to suffer … except ME.

              I was referring to those who actually make the laws in congress, but your point stands.

        • DrDick

          Exactly. They are a bunch of greedy sadists.

        • In discussions during the 2012 election campaign about Bain Capital, I remember reading comments that the people who lost their jobs in companies taken over by Bain deserved to lose their jobs because they were losers for going to work for those companies in the first place.

          You know, there’s no way to combat that kind of reasoning.

          • DrS

            Not true.

            You can repeatedly hit them in the head with a shovel.

          • efgoldman

            there’s no way to combat that kind of reasoning.

            Of course not. It isn’t “reasoning,” it’s something else. It’s like trying to kill a virus with an antibiotic, or reason with a two-year old.

      • Rob in CT

        Would the aca be in as much danger if the rich didn’t need to strip some people of their insurance to get a tax cut.

        Well, without the high-end taxes to help fund it, either you:

        1) Fund it like SS/Medicare through FICA, hitting everyone and putting (further) drag on the recovery by hitting people with little to no budget room as it is (which would also piss them off and justifiably so); or

        2) Deficit finance it.

        The trouble with #2 is that rich people see extra debt as a threat. Not the sort of threat they blather about in public, mind you, where the country will be DOOOOOMED! No, a threat to them, in the form of higher future taxes to pay for it.

        Going route #1 is bad policy and bad politics. Going route #2 doesn’t help with the rich hating the ACA thing.

    • Jon_H11

      This. I think we should remember that Government spending in itself creates (or prevents the loss of) growth only when its either spending on productive investment or if we’re in a deflationary free-fall, a la 1928-33 or 2008-10. Otherwise its a transfer pure and simple and has to be paid for either with taxes or inflation. An unfunded ACA would have made all health care end up like drug prices after Medicare part D.

      The problem is that right now Dems are expected by their electorate to create perfect programs that cost no one anything, prevent foreign wars and terrorist attacks with no military commitment, and not have even the slightest seeming on conflicts of interest (even if its only seeming), while, for their electorate, Republicans are just supposed to be white and racist.

      • CP

        The problem is that right now Dems are expected by their electorate to create perfect programs that cost no one anything, prevent foreign wars and terrorist attacks with no military commitment, and not have even the slightest seeming on conflicts of interest (even if its only seeming), while, for their electorate, Republicans are just supposed to be white and racist.

        This. Republicans’ complete abdication of even any pretense of caring about governance has left Democrats alone to shoulder the full burden, and it’s simply more than they (or any one party) can handle.

        They’re expected to be the reformist “we need to do better” party, the skeptic “how are we gonna pay for all this?” party, and the pragmatist “we need to keep the lights on” party, all at the same time. Every new Democratic government has to handle three huge responsibilities all at once: 1) repairing all the damage done to the system by the arsonists who just left, 2) performing all the routine maintenance that the system needs just to keep running (and that the arsonists have of course neglected to do), and 3) anticipate, plan for, and enact all the upgrades and expansions that the system will need in order to keep doing what it’s supposed to do while keeping up with the way the world’s changed.

        Even all that might still be manageable if the arsonists were gone, or at least, a negligible minority as they were post-1932. But no, enough people insist on continuing to send them to Washington that all three tasks described above have to be performed while the arsonists continue to riot and throw bricks and Molotov cocktails at the infrastructure you’re trying to fix. It’s simply not possible for one party to handle this much bullshit at once.

        • FlipYrWhig

          This.

          Which is also why I feel like if the Republicans want to win elections on white populism, it should be incumbent on them to find ways to push for, and pay for, white populist spending and policy priorities.

        • Lurking Canadian

          This is exactly the clear, succinct description of reality that CNN ought to be providing. Yet you’re doing it for free, while Wolf Blitzer is being paid millions per year to stroke his chin and wonder why both sides can’t come together.

          Granted, we can’t dissolve the people and elect another, but surely there’s some way to dissolve the media and elect another.

      • cpinva

        “while, for their electorate, Republicans are just supposed to be white and racist.”

        which is why the media doesn’t pound them for their failure to do anything constructive, except reduce taxes for the rich: they aren’t expected to. they are the party of five year-olds and dammit, they’re expected to act like five year-olds, screaming and throwing a fit, when they don’t get what they want, and blaming everyone else when the house burns down.

        • Hogan

          “I’m a scorpion. It’s what I do.”

    • tsam

      Clinton had a bunch of good fortune on the economy. Besides some more responsible budgets he won after a shutdown showdown, there was a massive housing bubble built on those toxic assets that would later blow up the financial sector on 08, and a massive dot-com bubble. How much of that made him a sucker? Who the hell knows? I do know it was monetary policy (outside his control) that allowed for mortgages to be handed to an awful lot of people who had no ability to repay them, and millions of second mortgages that allowed borrowing up to 125% of the home’s value. Greenspan would later famously say that nobody could have predicted a crash from this sort of super smart lending practice.

      • humanoid.panda

        I’ll give you the dotcom bubble, but the real estate bubble really didn’t pick up until 2002/2003.

        And the dotcom bubble was a complicated thing: much of it was hot air for sure, but at the same time, it was attended by a spike in productivity and wages. In other words, the 1990s economy had some froth on a very large wave. The 2000s were all froth.

        • tsam

          Fair enough. I guess those super giant IPOs like amazon and the like were later, but still prior to ever showing a profit.

        • CrunchyFrog

          Ahem. Part of the reason the dotcom boom happened was that the US beefed up the internet infrastructure. You remember Al Gore and the “Information Superhighway”? Yeah, that. This was part of the first budget they passed.

          • mds

            You remember Al Gore and the “Information Superhighway”? Yeah, that. This was part of the first budget they passed.

            I don’t know where you’re getting your “facts,” but I have it on good authority that Al Gore claimed to have personally invented the internet, and was a big lying poopyhead for saying so.

        • The dotcom bubble was at least two things. Tech companies that were really pre dotcom had stock prices that were historically overinflated, but in retrospect may not have been (made real stuff that was needed, are still in business today in some form). Also a lot of people, because of the money that brought in from people who wanted a piece of the action, were able to float companies that did very little for a couple of years and then lose basically everything anyone had given them.

          The bubble started popping very early in 2001 and was not fully recovered for two, three years.

          • tsam

            (made real stuff that was needed, are still in business today in some form).

            You’re talking about Cisco, for example?

            • And various companies now purchased by Cisco and others. Cisco is one of the big ones.

        • jmauro

          Also the Dotcom crash was more or less contained to the Dotcom sector. There was a big loss in equity, but nothing systemic, except maybe getting the now deregulated banking sector hooked on bubbles.

        • I’ll give you the dotcom bubble, but the real estate bubble really didn’t pick up until 2002/2003.

          Thanks for the chart. My recollection was that there were a lot of people I knew in the North Bay at the end of the 90s who were cashing in on the fast increasing equity on their homes to buy boats, SUVs, investment property, etc. Your chart shows that in the Bay Area that rise did occur more dramatically and a little sooner than in most of the rest of the country.

          • In further nosing around on the internet, it seems the late nineties Bay Area housing boom was likely a direct result of the local dotcom/telecom boom.

    • I could have sworn that the economy boomed in the 1990’s as Clinton reduced government borrowing as a share of GDP and the Fed responded with interest rate cuts to move money into the private sector.

      Jeez…and all this time I thought it was the tech bubble.

      • humanoid.panda

        Events can have more than one cause..

        • Bufflars

          And more than one event can happen simultaneously.

    • (((max)))

      Really? Was Clinton a sucker for caring about the deficit?

      Clinton was a sucker for reappointing Alan Greenspan. But caring about the deficit in the context in which Greenspan was Fed chair was kind of suckerriffic.

      I could have sworn that the economy boomed in the 1990’s as Clinton reduced government borrowing as a share of GDP and the Fed responded with interest rate cuts to move money into the private sector.

      The economy boomed in the second half of the 90’s when Alan Greenspan was confronted with rising employment (that is, a rising employment-population ration) and rising wages (aka mild inflation increases) and decided that monetary policy would simply allow the economy to run instead of clamping off growth as right-wing economic policy would demand.

      He did this because Clinton cut the deficit by cutting deficit spending.

      When Bush the Dumber came around with tax cuts, Greenspan, Randroid that he was, was happy to have deficits balloon. (He even argued that a government surplus was bad after bitching about deficits in the early 90’s.) Having deficits balloon was not, in and of itself, a huge problem. However, when combined with massive tax cuts on the wealthy, which caused a bunch of extra speculative money to move into the markets, combined with deregulation of finance, and suddenly we have got ourselves a housing bubble. Which bequeathed us the 2008 Great Financial Panic, much as the Reagan deficits when combined with tax cuts and massive deregulation of finance created the S&L Boom and Bust.

      In fact, the general model for this is that Republicans complain about deficits and government spending when Democrats are in office. When the R’s get into office, they cut spending on Democratic priorities, drastically cut tax on wealthy people, and deregulate finance like crazy, leading to brief & bogus speculative booms replete with financial fraud. The bogus booms collapse in turn, doing more damage to the economy than the fraudy growth created. Democrats start winning office and the Republicans suddenly start complaining about deficits.

      In our case, deficits are only a concern for most people when they can be used to constrain Democratic spending on those people. Deficits don’t matter that much in our situation because we have an enormous amount of headroom given the size of our economy and the stability of our currency.

      As long as Democrats don’t support mass deregulation of finance, increasing government spending with or without increasing the deficit simply shouldn’t matter that much.

      Except in recessions, it happens to be good policy to pay for your programs.

      And we can do that, if deficit spending bothers you, by raising taxes on rich people, which is a popular thing to do.

      max
      [‘Of course, the people who hate spending by Democrats and hate deficits when Democrats are in office REALLY hate tax increases ESPECIALLY on the wealthy.’]

      • Rob in CT

        +1.

        • catclub

          http://thereformedbroker.com/2016/12/13/every-unified-republican-government-ever-has-led-to-a-financial-crash/

          I am going to start the countdown clock.
          My first estimate is three years.

          • Rob in CT

            Well, if it’s gonna happen I’d prefer 3 years to, say, 4.

            Of course, I’d prefer continued slow & steady growth to that, but that’s the path not taken (and is obviously easier for me to say than someone who is unemployed/underemployed, or is making half of what they used to make or what have you).

            • efgoldman

              if it’s gonna happen I’d prefer 3 years to, say, 4.

              Why not right away (almost) so the RWNJs get good and slagged in the 2018 election?

              • Rob in CT

                Because there might be time for a rebound before the election, for one.

                For another, if it happens too soon it’ll be too easy for them to pin it on Obama.

                Nah, 2-3 years from now would be “best” politically.

                • efgoldman

                  if it happens too soon it’ll be too easy for them to pin it on Obama.

                  They’re going to do that (or at least try) no matter what happens or when.

          • Jestak

            The author of that post is generalizing on only three data points, so his argument isn’t really as powerful as he claims.

            • Mellano

              True, he does ignore the countless financial crashes caused by the reckless Democratic Party when it controlled Congress and the White House.

      • cpinva

        “(He even argued that a government surplus was bad after bitching about deficits in the early 90’s.)”

        that’s the thing about republicans, they can turn on a dime, to justify any policy they want at a given moment. having zero shame or moral center allows them to say, with a completely straight face, that whatever they supported before, they didn’t, even as video of them supporting it runs on the screen behind them, ala Trump. and the media lets them do this, because it’s what they are.

    • ColBatGuano

      Was Clinton a sucker for caring about the deficit?

      Yes. Next question.

    • SamInMpls

      After reading some of the responses to this comment I’d be interested to get Scott’s take on this.

      The bond vigilantes weren’t a thing? 10 year yields went from 5.2 in October of 93 to above 8 in November of 94 and didn’t get down to 4 until 1998.

      This isn’t one of those topics where the “He. Never. Even. Tried.” card gets played? Clinton was a fool for not axing Greenspan and letting rates climb even after the disastrous 94 midterms?

  • Taylor

    Anybody here remember the worldwide stock exchange collapse of 1987, that was the first sign that the piper’s bill might be due for Reagan’s deficits? I always thought this was how GHWB got religion on tax increases.

    Surely the US government could not be stupid enough now to pick a fight with China while they are the only thing keeping the dollar from going into the toilet.

    • Woodrowfan

      Surely the US government could not be stupid enough now to pick a fight with China while they are the only thing keeping the dollar from going into the toilet.

      with republicans in charge it’s never good to ask “are they stupid enough to..” because the answer is almost always, “yes, yes they are stupid enough.”

      • DrDick

        Actually, the vast majority of US debt is owned by Americans (much by the government itself).

      • tsam

        with republicans in charge it’s never good to ask “are they stupid enough to..” because the answer is almost always, “yes, yes they are stupid enough.

        They appear to be chomping at the bit to get this trade/currency war going with China.

        • jmauro

          Rightly or wrongly, it’s what the base really, really wants. That and the swamp draining and southern wall paid for by Mexico.

          Of the three, a trade war with China is the easiest to do by executive order, so it goes first.

          • efgoldman

            a trade war with China is the easiest to do by executive order, so it goes first.

            Well, they better say goodbye to $400 wall-size flat screens, and iPads or the new generation of smart phones under a grand. And where do you suppose WalMart is going to buy all those $10 retail shirts now?
            Although I imagine imported Chinese plastic rice will be cheaper than the real thing.

    • humanoid.panda

      Surely the US government could not be stupid enough now to pick a fight with China while they are the only thing keeping the dollar from going into the toilet.

      This is a myth that people bandy about a lot, but it’s wrong. First off, China holds only a small proportion of American bonds. Second, in the last couple of years, China had been selling dollars and bonds in order to prop up its currency, not the other way around. In fact, one of the things threatening the American economy is the prospect of the fed raising rates in response to the coming wave of spending and tax cuts- which will make the dollar even stronger and hurt employment.

      • guthrie

        So you mean having a war with China would cause less damagae to the economies than has otherwise been suggested?

        • humanoid.panda

          No, I mean the notion that the dollar is weak and the Chinese are about to destroy us is over-inflated.

          A trade war would be terrible for many reasons, but “Chinese will sell all their bonds and crash the dollar” is not one of them.

          • rea

            Trump & Co are perfectly capable of crashing the dollar without Chinese help

            • humanoid.panda

              As Krugman explains, our big problem might be that they make the dollar too strong, not crash it.

    • econoclast

      The ’87 crash was transitory. The bill on Reagan’s deficits never came due.

      If the dollar went into the toilet, it’s not clear if it’s a net gain or a net loss — lots of countries have deliberately driven their currency into the toilet. US debt is denominated in dollars, so it doesn’t make it harder to pay back the deficit. It makes exports more competitive, but it makes imports more expensive. Arguably it’s the easiest way for Trump to satisfy his campaign promises without interfering with the Republican agenda.

    • Mike G

      Easy Al Greenspin, Your Bubble-Blowing Pal responded to the ’87 crash with massive monetary stimulus. Which, being of craven and political mind, he proceeded to respond to every blip in the market with additional monetary stimuli, with no offset tightening when the event was over.

  • FlipYrWhig

    I know I’ve said this before, but I think it’s worth repeating: when Republicans say “the deficit” they mean “welfare.” That’s why in their minds Democrats are always creating explosions of debt and deficits: because they’re giving away free stuff to Those People, and there’s not enough of Other People’s Money to pay for it, which is why The Economy is for shit. They always think this when a Democrat is in charge. They never think it when a Republican is in charge, because that’s not what Republicans do with federal money, as the morality play goes in their minds.

    But here’s the other problem. There’s a kind of Democrat that _really does care_ about deficits, because he fears that increasing them will lead him to get tagged as tax-n-spend. And who over-learned the lesson about deficit reduction and economic boom being concurrent under Bill Clinton. Someone like Mark Warner will never not care about deficits. Being “fiscally responsible” is part of the way they think they got elected by a skeptical electorate.

    • drpuck

      1000 likes FlipYrWhig.

      The Dems have never figured out–because they are both tactically and strategically impaired–how to get political mileage out of the GOP’s “borrow and spend.”

      Yes: when they say ‘deficit’ they mean the browns getting bought off by welfare so as to bring down America as we knew it; when they say deficit they mean the nanny state rather than the healthcare church going could provide; when they say deficit they mean the illness of laziness that always overtakes a newly unemployed person.

      One should be certain that the problem of inequality has been studied by supply-side borrow-and-spenders. And, for sure, this inequality was caused by a combination of too much regulation and the propensity of hippies to just want to tear down anything with a ‘boss’ attached to it.

      Hair Duce’s factotums will soon test out the idea that draining the swamp means, actually, getting rid of the anti-american leftwingy opposition and all those that do not wanna MAGA.

    • tsam

      It’s hard to counter that narrative when mass media continually talks about federal and state budget in the same terms they’d use for a household budget. People really do believe that the government of the world’s largest economy is like a super giant personal checking account.

      How many stories have you heard that divide up the deficit and/or debt by the population and tell you that each person owes eleventy million dollars? This shit comes from supposedly serious journalists.

      • Rob in CT

        It’s frustrating, to be sure. Maybe the best counter is to point out that lots of households do, in fact, carry quite a bit of debt in the form of a 30-year mortgage.

        • tsam

          YABUT I GO TO WORK EVERY DAY AND STILL HAVE TO PAY FOR THISE PEOPLE TO SIT HOME N WATCH SPRINGER

          • tsam

            In English; ,Abandon all hope.

            • N__B

              We need to put up a sign on the YUUUGE WALL that says Lasciate ogni speranza, voi ch’entrate.

          • Rob in CT

            Against the just world fallacy we contend in vain.

            • Steve LaBonne

              Against the just world fallacy racist beliefs that “those people” get all the bennies we contend in vain.

              FTFY.

              • Rob in CT

                They’re tied up together (e.g. “why haven’t Those People bettered themselves like we did?”).

        • FlipYrWhig

          Yeah, I’ve never quite understood why people with six-figure mortgages equivalent to many years’ worth of their incomes seem to think they’re debt-free and hence, by virtue of the household analogy, the government should be too.

          • Rob in CT

            Mortgage debt doesn’t count, see, because virtuous people have mortgages. It’s kind of like how military spending doesn’t count as spending. It’s special, see.

            Which is why this approach doesn’t work, because again it’s all a morality play for most people. Pointing out that the federal government is an immortal with very low borrowing costs only helps with a tiny fraction of voters. Most people will never accept that such things matter. What matters is DEBT IS BAD, particularly if it’s used to finance nice things for Those People.

            • FlipYrWhig

              I get that, of course. But I still think it would be nice if someone — Austan Goolsbee? — ran an awareness campaign about the national debt and deficits, making that equation to mortgage financing and clarifying that the risky behavior isn’t all borrowing but borrowing beyond the means to make payments comfortably.

              Also, I wish tax returns had a line where everyone calculated the proportion of their taxes paid to their total income. People _think_ they’re getting nailed by taxes, and many of them aren’t, and may not even be paying very much. That might change the mentality or at least prick the conscience.

              • Rob in CT

                I get that, of course. But I still think it would be nice if someone — Austan Goolsbee? — ran an awareness campaign about the national debt and deficits, making that equation to mortgage financing and clarifying that the risky behavior isn’t all borrowing but borrowing beyond the means to make payments comfortably.

                Sure, that would be nice.

                There’s still the other side of the equation: what you’re spending it on. It seems to be easy to convince people it’s all wasted. Countering that is hard.

                Also, I wish tax returns had a line where everyone calculated the proportion of their taxes paid to their total income.

                Sure, including showing FICA and income tax separately & then combined. And then a graphic about where the money goes.

                Though I don’t know if it would help. Maybe a little. And a little is, like, a lot! ;)

                • tsam

                  It seems to be easy to convince people it’s all wasted.

                  EXCEPT for more weaponry and military expansion. Easiest thing to sell to the public.

                • farin

                  When we’re talking in absolutes, it’s much easier to convince people government spending is all wasted than that none of it is; no matter what, to any given person a great deal of spending looks like a waste, so it only takes a little nudge to get from there.

                • Rob in CT

                  farin,

                  That’s a good point. I wonder if there’s a way to redirect the discussion away from absolutes…

                  You go to the grocery store and spend $100. $95 of it is on good stuff, but you also burn $5 on lotto tickets. Sure, cutting out the lotto tickets would be a good idea. But there’s no need to go after the other $95.

                  Something like that.

            • the federal government is an immortal

              I’m not so sure that’ll be so true in a while.

              Although I suppose that the undead are “immortal” in a sense.

          • Lurking Canadian

            I don’t think that argument is very useful. A mortgage is a big debt, yes, but it is also counterbalanced by a big asset (the house). Unless (as happened to so many not very long ago) the value of real estate collapses, you can always get out from under just by selling the house.

            A mortgage is a good match to something like a stimulus package: we’re going to borrow a shitload of money now, use it to build cross-country broadband internet and high-speed rail, then pay it back over the next N years from the excess economic growth.

            Sometimes, though, governments run deficits that are chronic because they don’t bring in enough revenue to pay their operating costs. There might be good macro-economic reasons for doing that, but it doesn’t map well to a household’s finances.

            • FlipYrWhig

              Fair enough, but if we can make any headway on any level towards having more people embrace the idea that deficits might have benefits, that would be great, and I strongly doubt there will be any way to make that happen without a simplifying analogy.

            • Rob in CT

              Yes, that’s true.

              The household budget-federal budget analogy has all sorts of problems. I’d rather it die. But it appears to be a zombie, so…

          • efgoldman

            I’ve never quite understood why people with six-figure mortgages equivalent to many years’ worth of their incomes seem to think they’re debt-free

            Of course they’re not, but if they (we) didn’t have the mortgage, they (we) would be paying rent, servicing the property owner’s debt. So it’s money out the door in any case.

        • mds

          Maybe point out that huge, profitable corporations often have large revolving lines of credit, since it can be so cheap for them to borrow, too. And even small business owners take out loans to finance infrastructure and expansions. The problem with the household comparison is that it’s a fundamentally shitty analogy.

          • FlipYrWhig

            I don’t have any faith that people will ever understand debt in any other way. They don’t even really understand that jobs aren’t favors dispensed by the rich individuals who own the company.

            • liberal

              Huh? Next thing, you’ll be telling me that they’re a contract in which compensation is exchanged for labor.

              • FlipYrWhig

                “I never got a job from a poor person!”

                • “Well, maybe the occasional blow job.”

          • lunaticllama

            Beyond dedicated revolving credit-lines, all major corporations rely on commercial paper (that can have terms from a couple of days to a couple of months) to fund short-term operations.

          • tsam

            Maybe point out that huge, profitable corporations often have large revolving lines of credit,

            The stock we all have in these large corporations is a form of debt too.

          • Redwood Rhiadra

            The thing is, the vast majority of people do not run major corporations – and most of them think corporate financing is rather dodgy too.

            They DO, however, have a household budget. And trying to understand complex unfamiliar things by analogizing them with simpler, familiar things is a basic strategy we all use. You can’t work around that except by making everyone a financial expert, and that’s simply impossible.

            • tsam

              One weird trick I’ve used with a modicum of success is comparing the federal budget to local school bond levies. The feds (like a school district or municipal utility) don’t have a bunch of cash lying around to build a building. So the voters approve a bond (borrowing money), and pay taxes to pay it off. A banker makes some interest money, the public gets their nice new school, and we pay it off hopefully before the life cycle of the building.

              It’s not entirely accurate, but it’s not completely bonkers like trying to formulate a super giant checking account at Fort Knox or some goofy shit like that.

              • Domino

                Eh, I find using an example of a hypothetical country works (pretty) well.

                Let’s say I create the Domino Republic. And I decide I want my tiny nation to issue it’s own currency, so I create Domino Dollars. And then I create a property tax, so the people who live in DR have to acquire Domino dollars, and thus I’ve created demand.

                The only way for the residents of DR to acquire dollars is by the government giving them out to people. Thus, the government spends first, then taxes later. That’s how the budget and taxes work – Congress determines how much to spend, then after the fact they tax you in US dollars to stimulate demand.

                It’s not the most ethical system in the world, but it’s effective, causes little tension, and works pretty well. There is no giant pile of money that the Feds draw from to pay for things (except Social Security, but that’s taxed and funded differently).

                • tsam

                  DOMINO IS TYRANNY!

                  That’s a pretty nice little summation. I like it.

                • Domino

                  I got that from the TA who taught my ECON 201 course when I went to UMKC.

                  It was through him I learned that UMKC and UMass-Amherst are the 2 most leftist-leaning economic institutes in the country, and so I actually was being taught by a Marxist (a branch of Marxism – Institutionalism). Hell, he won me over with his argument (already left-leaning, but I agree with the tenets of it).

                  It’s hard for people to know that the Federal Government’s budget is fundamentally different from anything else, because it issues it’s own currency. Saying a hypothetical gov’t has to issue dollars out before getting them back in taxes usually works. Hell, if you tried to pay your taxes in cash, the IRS will pass those on to be shredded. Those dollars served their purpose.

                  EDIT: Bah, forgot to link to the wiki page. here you go – https://en.wikipedia.org/wiki/Institutional_economics

            • mds

              And trying to understand complex unfamiliar things by analogizing them with simpler, familiar things is a basic strategy we all use.

              Oh, okay. A roll of paper towels is pretty simple and familiar, right? Let’s just analogize the federal government’s budget to that. See, the absorbancy of the towel sucks up revenue, the perforation allows you to break that revenue up into smaller sections that go straight into the wastebasket, and at the end of the process you can go “dur-dur-DUR-dur” through the cardboard tube. There! Wasn’t that simple? Easy to understand? Let’s vote on policy now!

              Alternatively, maybe the point remains that attempting to analogize something with an almost totally unrelated thing is misguided at best, and easily leads to bad outcomes. Because there is no way that letting people think the federal government uses the same budgeting process as a household is even remotely accurate or good for progressive causes.

              • FlipYrWhig

                Well, the thing is, you’re not going to defeat a powerful analogy that people have been internalizing their whole lives and that has been destructive to American politics… by grousing about the deceptive nature of analogical reasoning.

                • mds

                  What the hell is going on here? I said that the household analogy was an especially bad one, spitballed about a slightly closer analogy, was told that a household budget was more familiar to most people, and groused about that. That’s not grousing about analogical reasoning; that’s saying pick better analogies. We sure aren’t going to defeat a powerful analogy that people have been internalizing their whole lives and that has been destructive to American politics by continuing to use that same goddamned stupid analogy because it’s “easy to understand.”

      • Davis X. Machina

        It comes from the elves at Peter G. Peterson’s operation, and the journalists pass it on.

        Why cook from scratch when you can pick up take-out on the way home?

        (You wouldn’t believe the road show they’ll send to your high school free for the asking if you promise to deliver your whole student body to the gym for a period.)

        • Steve LaBonne

          The first thing we do, let’s kill all the billionaires. There aren’t even that many of them.

        • Aaron Morrow

          I am old enough to remember when those deficit scolds argued against Clinton’s tax increases … for reasons.

          • tsam

            It will Shirley meltdown the economy–job creators already pay their taxes with job creation, see? It all makes sense if you can’t read good.

    • Rob in CT

      Yes.

      With apologies to Dr. Krugman, for the vast majority of people, economics is a morality play and no matter how much he rails against it, that won’t change.

      • Steve LaBonne

        Which is why I’ve reluctantly come to accept that social democracy can only be sustained in polities with a high degree of ethnic and cultural homogeneity. Tl;dr: we’re doomed.

        • Rob in CT

          I’m not quite that pessimistic. Somehow. And I’m not even drunk.

          • efgoldman

            And I’m not even drunk.

            Morning drinking is never a good thing.

            • Steve LaBonne

              I’m trying not to go there, but it’s been hard since Nov. 8.

            • BigHank53

              Morning drinking is never a good thing.

              Citation required.

            • tsam

              Morning drinking is never a good thing.

              NOW YOU’VE GONE TOO FAR

            • JustRuss

              My friend Bloody Mary disagrees.

              • tsam

                What a great friend you got. We should introduce her to my friend Irish Coffee.

        • tsam

          I think it can survive without that sort of homogeneous element IF we have a robust education system that has the authority to shitcan racist board members who want to rewrite history and make white men the always good guys in all the stories forever. Keep science as science, not fairy tales mixed with science, etc. but they’ve long since kicked that leg out of the table, and. Is we’re sliding off the edge.

          • efgoldman

            IF we have a robust education system

            Damn, tsam, you are one funny guy.

            You also left out the sarcasm font.

            • Mellano

              The thing is, we have this, through much of the country, arguably with deep roots going back to the Puritans. Of course the confederate states never liked it much, and now they and their allies are trying to burn it all down.

              Democrats are going to have to get their heads out from the collective ass of charter school lobby stat, unless we want an electorate even more open to denialism than the current one.

        • CP

          My thing with this belief is that in our country at least, and in much of the West, the parts of the country with the least cultural homogeneity are almost invariably the ones that are the most committed to social-democratic programs and values, while the areas with the least of it tend to be rural or self-segregated exurban all-white communities.

          • FlipYrWhig

            I expect there’s a weird effect where it seems like having _no_ people of color around is conducive to social democracy, and having _lots_ of people of color around is too, but having _a few_ around is tremendously destructive to the ethos.

        • Lurking Canadian

          I think the real barrier to sustained social democracy is economic inequality.

          I saw a statistic somewhere that said 1% of Americans pay 50% of federal income tax.

          Now, to me that’s entirely appropriate. Probably even low. 1% of Americans earn something like 50% of income, so of course they’re paying 50% of the tax. If the tax system were genuinely progressive, as it should be, they probably ought to pay more.

          But with the income and wealth distribution so utterly lopsided, it’s hard to avoid the impression that government programs take from this group (rich people) and give to that one (everybody else), since THAT IS WHAT HAPPENS. If there weren’t such enormous divides in income, it would look more like a society-wide pooling of resources to provide needed functions more efficiently, which is a much easier sell.

          • Vance Maverick

            To build support for redistributive policies, we must first redistribute!

            • Lurking Canadian

              You see the problem.

              This, in my opinion, is the real reason for the “confiscatory” (>90%) tax rates we used to have on ridiculously high salaries. It wasn’t actually there to raise revenue. It was there so nobody would make ridiculously high salaries in the first place.

              Now that they do make ridiculously high salaries…I don’t know. The French solved the problem of how to run a country with a ridiculously wealthy, tax exempt class between 1789-1800, but their solution was not without flaws.

              • efgoldman

                This, in my opinion, is the real reason for the “confiscatory” (>90%) tax rates we used to have on ridiculously high salaries.

                Those were only marginal tax rates, not absolute. We had plenty of rich – really rich – people, and plenty of people who got rich, after WW2 into and thru the 50s.

                • liberal

                  Yes.

                  If you look at the tax code, even back then there was all sorts of crap that should make one very wary of looking at marginal rates and ignoring what’s actually taxed (aggregate gross income or whatever).

              • Redwood Rhiadra

                Actually, the 90% marginal tax rates we used to have were for the purpose of funding WWII. (FDR was originally going to set a 100% rate under his wartime powers; Congress panicked and passed the 90% rate as a compromise. )

                It had NOTHING to do with reducing inequality.

                (The same happened with WWI – top marginal rate was raised to 77% during the war, and then dropped back down a few years after the war ended.)

                • Aaron Morrow

                  Regardless of the original cause, the top marginal tax rate remained at 91% after World War 2, through 1964. Therefore, it remained high for reasons besides fighting the war.

        • leftwingfox

          California is the counter-argument here, where whites in a largely mixed population voted more progressively than whites in more homogenous communities. (See also New York City vs New York State)

    • I sometimes think the number of people who believe if the government runs up a deficit, everyone else spends without thought of the future, and if the government balances its budget, everyone else becomes sober and prudent, may be non-negligible.

      • FlipYrWhig

        I sometimes think that people think “the government” and “the country” are the same thing, so “the budget” and “the economy” are the same thing, and thus “the deficit” means the total amount of money the American people in aggregate owe on all their bills.

    • The other thing to remember about this is that Republican (and some Democratic) voters do care about the deficit, but are completely ignorant of the history of deficits over the last 50 years, believing what they are told, without examination or analysis, that the Republican politicians are the responsible deficit hawks.

      • efgoldman

        The other thing to remember about this is that Republican (and some Democratic) voters do care about the deficit, but are completely ignorant

        You probably could/should have stopped right there.
        As we found out in the last shutdown battle, there is a significant number of people in the RWNJ Republiklown Kongressional Krazy Kkkaukus who don’t know the difference between the deficit and the national debt.

  • Tom Till

    One of the Democrats’ worst habits is equating deficit reduction with good government. Good government means making sure that the needs of the people are being met in an effective way, not internalizing fragrantly opportunistic criticism from a party whose chutzpah when it comes to all things fiscal knows no limits. The press, overrun with deficit scolds, certainly does not help here.

    • FlipYrWhig

      Democrats learned this habit as a way to negate the “tax and spend!” attack, AFAICT especially in the Sun Belt, starting in the 1980s. To the degree that “DLC” has any meaning, it’s that fetish for streamlining, efficiency, “reinvention” and so forth.

      • liberal

        There’s nothing wrong with “efficiency” per se. Devil’s in the details.

        • Steve LaBonne

          But as Atrios often points out, the actual programs that have generally emerged from that mentality, loaded with bureaucratic sand traps intended to keep the “undeserving” from benefiting, are anything but efficient.

          • liberal

            Of course. That’s stupid efficiency. If you sum over everyone’s “utility”, the efficiency gain (apart from political damage) is probably negative.

            I’m using efficiency in the real dictionary way—more bang for the buck. The class your talking about doesn’t fit that description.

  • Jackson87

    If we all just keep in mind that all government expenditures are an abomination, excepting, of course, payments made to the MIC, we’ll all be less stressed out by events of the next 4 years.

  • JohnT

    This whole year has given me a much more visceral understanding of what Churchill meant when he said that democracy was the very worst form of government…except for all the others. Democracy has always seemed to work OK but I am really having doubts. If I thought that people were deliberately choosing ‘hard’ Brexit, or this borrow-to-give-away-to-millionaires bullshit, or many of the other atrocities likely to spin out of 2016, then on one level, I could live with that. I would oppose but continue to accept democracy. In the elections in the Eighties and Nineties the results were not always what I liked but they seemed to reveal a genuine revealed preference of the majority of the electorate for heading left or right or centre. But now…a decisively large number of people seem to be voting based on stuff that is not true, for stuff that can never happen, without thought of consequences. There was always some of that of course but it feels much worse now.

    The trouble, as per Churchill, is that I don’t like the only plausible alternative – Singapore style ‘managed’ democracy either. It’s stifling and needs an immense social conditioning at every level, both for the ruled to accept the system and for the rulers to consistently try and rule for the people’s benefit rather than their own enrichment. And Putin-style authoritarianism definitely sucks.

    It’s a bit of a pickle….

    • Rob in CT

      Another Churchill quote exists for this:

      The best argument against democracy is a five-minute conversation with the average voter.

      Democracy’s big advantage isn’t that it produces better policy outcomes. The ideal of smart, informed voters making careful choices is mythical, sadly. What democracy (a well-designed one, anyway, which we may not have) has in its favor is legitimacy & peaceful transfer of power, which make rebellions/civil wars less likely.

      • tsam

        Even Plato knew that back when they were more or less inventing what would become democracy. Dumb people break shit. But then this fell out of millennia of hereditary despotic monarchies, so….not sure where else they were supposed to go with it.

        • djw

          Plato wasn’t involved with inventing it at all–he was an elitist critic of Athens’ democratic reforms from the start.

          Athenian democracy emerged (as most democracies do) from a moment of intra-elite conflict, where one faction of the elites saw their interests as well-served by empowering the citizenry, which they succeeded in doing. Virtually every Athenian intellectual whose writings survive from that era was affiliated with the faction of elites who opposed democracy. The democrats didn’t write much of anything down, sadly.

          Thousands of years later, many aristocrats, monarchs and other powerful parochial figures would condemn democratization just as vigorously, but we see it for the special pleading it is, and don’t nod along with their self-interested special pleading. We really should get smarter about Athenian democracy’s critics, and see them in that light.

          • tsam

            I’m more referring to Socrates’ (mostly correct, I think) criticism of the fact that the vices of the many will manifest in the government in a democracy. It’s one of those eternal paradoxes, where democracy can’t exist without the input of the stupid, but the input of the stupid does damage to the system.

            I’m probably mis-remembering a bunch of that, since it’s been a LONG time since I’ve studied it, but I think that was the general thrust of Socrates’ argument.

      • McAllen

        I don’t think I agree. I always thought that democracy’s main advantage was that it correlated strongly with a society having liberal values.

        • Rob in CT

          Maybe, but you’ll forgive me if I’m having a little trouble seeing that right now (even if it’s probably true).

          • McAllen

            Sure, but I’m having trouble seeing legitimacy & peaceful transfer of power right now, too.

            Or, to put it another way, the danger with Trump is that he’s destroying a lot of the things that make democracy good.

            • efgoldman

              the danger with Trump is that he’s destroying a lot of the things that make democracy good.

              To be fair (and I hate to be) that’s really the whole RWNJ TeaHadi Republiklown project for the last eight years.
              Hmm… what do you suppose the triggering event could have been?

            • eh

              To be sure, he hasn’t actually destroyed anything yet.

              • Sure he has. Neo-Nazis have come out of hiding as a direct result of his campaign and, later, election. Hate crimes of all sorts have spiked. “The president-elect grabs women by the pussy, so I can too” is now a thing men actually say. There has been an epidemic of sexual assaults. Among schoolchildren.

                Trump may not have taken office yet, but he’s already destroyed a lot of established norms of our society, and it’s going to get a lot worse.

      • djw

        Democracy’s big advantage isn’t that it produces better policy outcomes.

        Just because democracy doesn’t produce better outcomes through the method an idealistic version of the folk theory of democracy proposes doesn’t mean it doesn’t produce better policy outcomes. In addition to peaceful transer of power, democracies have economies with (modestly) higher growth and lower inequality, on average. (Which holds up when a variety of other potential variables are held constant.)

    • tsam

      Well, our legitimacy problem is probably contributing to that, but I’m 47 years old, and I’ve never seen a right wing so incredibly insane as they are now.

      I think Trump signaled a big impending change. I have no clue what this change looks like, but it hardly seems intuitive that it will be a good thing.

      • BigHank53

        There’s a joke that floats around our house–the shorthand version is “canned goods and ammunition”. The long version is speculating when it will be time to convert all our liquid assets into canned goods and ammunition–useful trade goods–because the dollar is going to crater, shortly followed by a significant portion of the state and financial system.

        It’s been a joke. When GOP politicians talk about missing payments on the national debt and dismiss the economists tearing their hair out with “I don’t think it would’ve been that bad,” we are clearly dealing with deeply stupid people. They’ve never had a credit card jacked to 29%, or had five bill collectors on the phone every day, or a dead car in the driveway and a job thirty miles away. Their universe of pain is limited to the wiffle-ball existence of a well-off suburban white guy: A hike in capital gains taxes? Aiee!

        Engineering students always have to break things while learning to build them. These jerks want to skip school and get right to work on the largest economy in the world. What could go wrong?

        • N__B

          Engineering students always have to break things while learning to build them.

          Yeah, but let’s use an example that the average ten-year-old knows: Clue. You learn most from a totally wrong guess.

          • BigHank53

            No, breaking things is great–in the lab. Prototypes are excellent! The Church of the Free Market types scare the living crap out of me, because they’ve got scripture from Hayek or Friedman or Rand that’s already told them exactly how the world should work, and they just need to pound the world into the right shape. The historical record is not short of examples of top-down ideologies being imposed, and y’all can go check out the mass graves, too.

            • liberal

              That’s one of the problems with economics: in many ways it’s a deeply, deeply un-empirical “science”.

              Friedman has this whole paper about how it’s OK to have unrealistic assumptions, as long as the resulting model does indeed fit the real world reasonably well. That’s fine as far as philosophy of science, I guess, except the models don’t fit well.

              After 2008, economics should rightly be regarded as a laughingstock. In principle, it’s certainly possible to have a “positive” theory of economics, but the field is so corrupted by pecuniary influences, it’s hopeless.

              The irony is that the economists’ own mantra that “incentives matter!!1!” predicts this very result.

        • econoclast

          As an economist, I have to say this attitude of Republicans is very exciting. A sovereign like the US defaulting would be completely unprecedented in modern history. What would happen next? I don’t know! It would be bad, of course, but which of the myriad ways it could be bad would it be?

          When the housing bubble burst, I knew it would be bad, but I didn’t really anticipate how it would play out. It was very educational.

          • tsam

            Let’s run that model somewhere else, k?

          • Rob in CT

            Prior to the election, my boss said “I kind of wish we could run a simulation to see what Trump winning would look like…”

            Yeah, about that. THIS is the parody/simulation universe.

            • N__B

              We were flies who dreamt we were men…

          • Hogan

            Maybe something like this?

            Or maybe we could do our own expulsion of the Jews, like Edward I. Or both.

          • econoclast

            I made this joke to a British economist after Brexit, and he said I wouldn’t feel that way if it was my own country. So I’m now honor-bound to make it again.

          • efgoldman

            which of the myriad ways it could be bad would it be?

            All of them, Katie

      • efgoldman

        but I’m 47 years old, and I’ve never seen a right wing so incredibly insane as they are now.

        Oh, hell, I’m easily old enough to be your father [is your meatspace name “Luke”?] and a little bit besides, and I’ve been politically aware since before JFK and I’ve never seen a right wing – in this country – like it is now.
        As I’ve said before, a substantial percentage of their voters can’t even see reality from two counties over.

        • Steve LaBonne

          My dad was active in local Dem politics and my parents knew all the politicians in town of both parties. Back then, what is now mainstream Republicanism was purely Bircherism and was despised and laughed at by every single Republican. (Of course, this was in the Northeast.)

          • liberal

            Interestingly, the original home of the JBS is Belmont, MA.

            • efgoldman

              Interestingly, the original home of the JBS is Belmont, MA.

              Where we lived, and raised our daughter, for 18 years.
              Now just another overpriced, mostly white, mostly liberal Boston suburb. Excellent schools and town services.

              • liberal

                We looked at homes there. Decided on a different town of the same type, nearby.

                …not sure what you mean by “overpriced,” though.

                My dad jokes about my $[large amount] house every time I mention something wrong with it (mine’s built in 1937, which is practically brand new around here), but you’re really paying for the site value, not the structure.

                • efgoldman

                  …not sure what you mean by “overpriced,” though.

                  We lived in the section of town that’s mostly two and three family houses between Cushing Square and Waverly Square. In my living memory those were the places where the parents lived in one apartment, the [married] kids in the others. They worked in the candy factories in Cambridge, or were Edison workers, T drivers, muni employees… you know “working class.”
                  No more. All those people were priced out – or chose to be bought out – decades ago.
                  Love and loved the town, but I don’t think that’s healthy, maybe because I grew up in Brookline in an apartment on the combined paychecks of an Army warrant officer and a nurse. That can’t happen any more, either.

        • tsam

          Meatspace name is not Luke, Dr. Vader. Find another kid and saw his hand off. I need this one for me time.

          My parents probably are near your age and they are continually finding new lows for conservatives.

          I feel like there was a time–in my lifetime even, that even if conservatives like say, during the Reagan era were bad at governance, they still wanted the country to be governed, rather than just rotted out from the inside and turned into a Central American post-intervention banana republic where there are a few rich warlords with their own private armies who control the government and everyone else is completely destitute. Even if their vision of a middle class was wholly racist and sexist, they wanted one to exist. Now they just want to burn it all the fuck down.

          • CP

            I feel like there was a time–in my lifetime even, that even if conservatives like say, during the Reagan era were bad at governance, they still wanted the country to be governed, rather than just rotted out from the inside and turned into a Central American post-intervention banana republic where there are a few rich warlords with their own private armies who control the government and everyone else is completely destitute.

            I think Reagan was, in fact, when that vision took over the Republican Party. You don’t notice it right away because 1) it was only beginning, 2) he had a strong opposition party pushing back and limiting his worst efforts, 3) even though his faction was now dominating the GOP, there were still lots of Republicans who weren’t like him and did believe in governance.

            But Reagan was the first president who was actively hostile to the New Deal consensus and was perfectly happy to rot it from the inside; IIRC, the “Leninist strategy” of ruining government from the inside until it could be destroyed was begun under him, and it’s even some of his advisers who were first heard using the term. A Central America style banana republic is very much what they were aiming for.

            • There were some but I think under Reagan they (with exceptions) really believed you could have small business owners, small farmers, etc., like God and Jefferson intended. And that laissez-faire would get them there. Now more seem to have accepted that’s not where laissez-faire gets you, and it’s a good thing, too.

              • CP

                Did they (by which I mean politicians and those around them) actually believe it, though, or was it just something they knew they had to say?

                The impression I got was that in the 1980s, when they were just beginning to take over politics and tear down the system, they had to pretend that it was all going to result in widespread prosperity and opportunity and other Morning In America-y things in order to maintain public support. It’s only now, three decades later, when they’re securely entrenched at every level of politics and they’ve destroyed so much of the system, that they can afford to shrug and say yeah, it’s probably not ever going to get better.

                • tsam

                  Well, that was the ascension of the Sagebrush Rebellion, a precursor to the Tea Party, logical successor to the John Birch Society.

                  I guess it’s the same old vandals, they just finally managed to grab some power and do all the damage they could get away with at the time. Their orthodoxy caught on, and lookit what we got now. It’s almost become standard orthodoxy among the population–cut all the taxes, give me (ME, NOT THEM) all the services and kill all the commies moooooslims!

                • Do you mean, do I think were they all intellectually consistent libertarians? That would be ridiculous.

                  Did they have any vision of what America should be that was different from what they thought, wrongly, America “always was”? That would also be ridiculous.

                  They probably had no persuasive about what could possibly happen, They wanted “like it was when I was a kid but even better and without dissenters.”

                  Sure, it depends who you’re talking about.

                • CP

                  I suppose I meant it in a more generic “did they sincerely believe that their policies would actually return power to the small businessman and the small farmer, or at least make life better for them, instead of only screwing them over more comprehensively as actually happened?” way.

          • efgoldman

            even if conservatives like say, during the Reagan era were bad at governance, they still wanted the country to be governed

            Hell, even Newtie and the gang wanted that, they just wanted it done THEIR WAY.

            Now they just want to burn it all the fuck down.

            ‘zackly, And there a still enough people like us, and a number of old-line Dem politicians, who can’t really believe this has happened/is happening. [I absolutely believe it, but I was a cynic before it was fashionable, and already an adult during Tricksie Dicksie Nixie) Obama, FSM bless him with pasta forever, somehow kept things from going completely in the shitter for eight years. He’s going to be gone in a month….

            ETA: No fair changing avatars in midstream

            • tsam

              BUT IT’S HULK WITH KITTIES

        • N__B

          your meatspace name

          “Dressed Venison” but that’s very personal.

          • tsam

            I won’t tell nobody!

        • rea

          I’ve been politically aware since before JFK and I’ve never seen a right wing – in this country – like it is now.

          “Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes that you can do these things. Among them are a few Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid.”

          –Dwight Eisenhower

          • Lurking Canadian

            You’d think if any 20th century figure would understand thinking strategically, playing the long game, etc… it would be Dwight D. Eisenhower.

            • guthrie

              The opinion of many British was that during the war Eisenhower didn’t get strategy at all. He might have learnt some during it though. Also I think he was dead by the time the quote became a national strategy for the Republicans.

              • Rob in CT

                I think it’s fair to question whether the British High Command’s view of Eisenhower & the Americans was justified (and vice versa, of course).

                But military history isn’t my thing so maybe he was a poor strategist.

                • Mellano

                  Wrong place

                • ColBatGuano

                  Right. They hated him because he wouldn’t do things their way.

              • Denverite

                I for one think that the architects of Operation Market-Garden were master strategists and were perfectly qualified to judge Eisenhower’s strategic chops in WWII.

                (More seriously, Eisenhower’s Western Front strategy — we’ve got all the men and equipment we could ever need, let’s just keep on marching along and let the Russians bear the brunt of the German defense — was pitch perfect, if a bit boring.)

                • Hogan

                  Given the constraints he was under and the cross-pressures he had to deal with, I think judging Eisenhower as a strategist based on the ETO is like judging Obama’s ability to craft health policy based on the PPACA.

                • tsam

                  Some historians (one being a college teacher of mine who was responsible for my awakening), believe that American strategy–waiting until June ’44 for the mainland invasion, and letting the Russians take all of the Eastern and Northern heat contributed in a big way to the Cold War getting so…cold. While Stalin waited for relief with a Western Front, around 10 million Russians died fighting the SS advance and siege.

                • rea

                  There is a fairly convincing argument that trying it before June ’44 would have ended in a catastrophe. Had to build landing craft, train troops, gain some experience in smaller amphibious operations.

                • Mellano

                  Some historians (one being a college teacher of mine who was responsible for my awakening), believe that American strategy–waiting until June ’44 for the mainland invasion, and letting the Russians take all of the Eastern and Northern heat contributed in a big way to the Cold War getting so…cold.

                  ? Saying that the timing of the Normandy invasion caused Stalin to distrust the western allies is like saying Congressional Republicans would have cut a grand bargain but Obama never truly negotiated in good faith.

                • tsam

                  No, I think the idea was that Stalin thought we were deliberately delaying the invasion.

                • Rob in CT

                  Well, Stalin thought a lot of things. Like that he could cut a deal with Hitler to grab half of Poland and that would work out fine, for instance…

                • Mellano

                  Maybe he really thought that and wasn’t simply taking the obvious public position. I’m curious what the current research says.

                  But so what? Stalin didn’t need an excuse to want buffer states in Eastern Europe, and with the wartime Red Army, he was able to seize them.

                  I mean, the guy executed half of his own officer corps. A resurgent USA with atomic bombs isn’t going to make him paranoid because they landed in France in ’43 rather than ’44?

                • guthrie

                  Yup, many of them were. Especially the ones who had nothing to do with Market Garden…

                • guthrie

                  Wait, it was American strategy to wait until 1944 before Normandy landings? That’s contrary to everything I’ve ever read abotu WW2; the Americans were for a 1943 landing (And the less said about Churchill the better) and were eventually persuaded otherwise.

                • tsam

                  That’s contrary to everything I’ve ever read abotu WW2; the Americans were for a 1943 landing (And the less said about Churchill the better) and were eventually persuaded otherwise.

                  Pretty sure the US was pushing for the earlier invasion, and I think, as rea states above, it may have been a good thing we didn’t. The training and equipping that took place in the interim was probably critical to the success of the landing, which was pretty horrible in terms of casualties despite the success of it.

                • Hogan

                  I have trouble believing that Stalin gave more of a shit about those particular 10 million war dead than about any of the others. There may have been a “Why do I have to do all the work?” complaint at the time, but since a later invasion gave him more time to establish facts on the ground in eastern and southeastern Europe I’m inclined to accept his native paranoia as the main explanation for his postwar behavior.

        • Domino

          I forget the age of some people here.

          I turned 26 this year. My first vote for president was for Obama. I’ll always be happy about that.

          • tsam

            Wow–seems like so long ago. My first vote was for Dukakis (!)

            • (((Malaclypse)))

              Mondale!

              • tsam

                So we both got crushed in our first attempts at voting. No wonder we’re sour bastards.

                • (((Malaclypse)))

                  I prefer to think of myself as bitter, thank you very much.

                  EDOT: Oh, and and Bush/Dukakis was the peak of both my leftier-than-thouism and my personal drug use, so I genuinely thought there was some chance the the Socialist Workers of America would do well given the choices presented.

                • tsam

                  I was pretty politically un-curious then, so I went with the Democrat, still being angry with the Reagan administration for selling guns to Iran (so soon after American hostages languished there for 444 days), and then sending money to people who were pulling families out of their homes and murdering them. I was a Democrat because all I knew of politics came from my parents, and there was discussion of fine Republicans like Nixon, Reagan and Bush Sr–who was a CIA spook for WAY too long to be any kind of decent human.

      • bob333

        I’m sixty and I agree they have never been this insane.

        • tsam

          In some ways I wish I was that old, so I would have seen the late 60s and early 70s. For as horrible as some of that was, much of it was pretty inspiring to me–at least based on the music that came from that era. But being born in 1969 made me start to become politically aware in the 5th grade when the pure shock and alarm I witnessed from my parents at the election and presidency of Reagan made for a smallish awakening. Then Iran-Contra during high school pretty much secured my disdain for Republicans for good. Watching Oliver North’s smug fucking ass testify as if he were being inconvenienced by having to answer for his illegal actions was a real eye-opener for me. This was nothing new, but I knew nothing of the Pentagon Papers or Watergate.

        • I’m 57, and I agree with you. This present insanity started in the 90s. I remember in 1980 being unable to take Reagan seriously as a candidate; he seemed so dumb and irrelevant to 20 year old me, I actually formulated a theory that he was a Russian Manchurian candidate. I was wrong, that time.

          • econoclast

            God is punishing us for all the times we quoted that Marx tragedy/farce line. He’s saying “I’ll show you motherfuckers what farce looks like.”

            • Rob in CT

              Frankly, this is one more piece of evidence (amongst a huge pile of it) that there is no God, or if there is one he’s an asshole.

              • Mayur

                More like Azathoth; a “blind idiot god.” Trump and the RWNJs are actually perfect avatars of such a being; “free and wild and beyond good and evil, with laws and morals thrown aside and all men shouting and killing and revelling in joy.” (well, that technically describes the cults of the Old Ones, but I’m eliding.)

    • CP

      The trouble, as per Churchill, is that I don’t like the only plausible alternative – Singapore style ‘managed’ democracy either. It’s stifling and needs an immense social conditioning at every level, both for the ruled to accept the system and for the rulers to consistently try and rule for the people’s benefit rather than their own enrichment. And Putin-style authoritarianism definitely sucks.

      My main thing is this; it’s not that I don’t think the electorate, even in the best of times, doesn’t include tons of stupid fucks who couldn’t find their own asses with both hands and a map. I totally do. I just don’t believe that there’s any such thing as a ruling class that doesn’t have that exact same problem. All throughout history you find ruling classes – whether political or corporate or clerical or academic or (definitely) hereditary – who despite their claim to be smarter or better bred or more capable than the general public, turn out to be just as riddled with incompetent idiots as the rabble they’re trying to rule.

      TL/DR: yes, all things being equal, my politically brain-dead Appalachian relatives are probably too dumb to be trusted with any political power, but then so was George W. Bush. (Not all elites are like him, but then not all voters are like them, either).

      A secondary point is that even if one could somehow create an elite that was so much smarter and better informed than the public that it would be objectively more qualified to rule the country, there’s no guarantee that they’ll run the country for the benefit of the public instead of themselves. Unless they’re somehow accountable to the public, and the ballot is still the best way we’ve found, even if it’s far from foolproof, to hold them accountable.

      • Rob in CT

        Yeah, this too.

      • efgoldman

        even if one could somehow create an elite that was so much smarter and better informed than the public that it would be objectively more qualified

        But we already have one: LG&M commenters. Lemieux is a benevolent despot.

        • ColBatGuano

          Would we get scepters and robes? Because then I’m in.

      • liberal

        A secondary point is that even if one could somehow create an elite that was so much smarter and better informed than the public that it would be objectively more qualified to rule the country…

        AFAICT much of the elite are total fucking morons in terms of this stuff. (Not political elite necessarily. But certainly oligarchs and businessmen, who know jack shit about the monetary system, the debt cycle, etc etc.)

        ETA: you said it better than me in later graphs; I posted too quickly.

  • Denverite

    They see a recession coming in 2018 or so and are priming the press for the massive helicopter cash drop that will be coming. I don’t even mind, really; it’s the right policy, even if the rich will be the beneficiaries of the lion’s share of the drop.

    • liberal

      But they’re not capable of a cash drop.

      Interest rates are already very low. The only effective way to get the money into the economy right now is by using fiscal policy. Republicans don’t do that, except to the extent that they like to cut taxes on upper incomes. The wealthier the recipient, the less efficient the cut is as fiscal push.

      While a lot of people will suffer, I’m going to be eating lots of popcorn if they destroy their brand because of their own ideological blinders. It’s going to be interesting to watch (yes, I’m mindful that “may you live in interesting times” is a nasty curse).

      • Rob in CT

        They destroyed (nuked from orbit, really) their brand under Dubya. That produced a very short-lived period of Dem control, after which people forgave the GOP and started electing them again.

        So, while I’m all for hoping for the best, even if we get a 2008-like result again we should assume it’s going to last about five minutes.

        • jim, some guy in iowa

          their brand, such as it is, involves catering to people’s nastier instincts. Can’t *be* destroyed

          • liberal

            Yes it can be. What was the Nazi’s brand like after VE day?

            • Mayur

              I dunno ask Steve Bannon.

    • guthrie

      I think you underestimate their abilities. Even if they were in a car heading towards a cliff and the logical thing to do is step on the brakes, it looks from over here like they would hesitate, or just not brake at all.

      So a more complex thing like helicopter money can really easily be mismanaged, especially if they just give it to the rich. That way all the racists can be happy no money is going to black people.

  • Harkov311

    I remember in the Herblock book “Through the Looking Glass” he had a satirical Republican definition of the word ‘budget’ which read: “something that should have been balanced in the past, and ought to be balanced in the future, but not right now.”

    And that was on 1983. Some things don’t change.

    • efgoldman

      And that was on 1983.

      Well, Arthur Laffer joined himself at the hip to Sanctus Ronaldus Magnus, some Republiklown “economists” and politicians hung on like barnacles, and an orthodoxy was born.
      And it really works, this one weird trick! Just look at Kansas.

  • Aaron Morrow

    the tax hikes are gone

    When I toast in the new year, I’m literally going to toast to a progressive Medicare tax system that captures unearned income as well as payroll wages.

    raise whatever taxes can be raised, but don’t worry about deficits

    If Democrats want to say that and act like voters want them to raise taxes on higher incomes because of the deficit/debt/media boogeyman of the week, I won’t lose sleep over that. I’m in agreement on not curtailing programs because of it, but I sure wouldn’t mind using the argument for progressive ends.

  • searcher

    The problem is that Democrats care if the government functions and Republicans don’t. That means that sometimes (like, the last 8 years, when interest rates are near 0) deficit spending makes sense, and sometimes it doesn’t. Democrats are always going to need to be willing to pay attention to budget deficits, because we want to the government to work.

  • cgordon

    “Under the current partisan configuration, caring about deficits makes you a massive sucker.”

    Caring about deficits instead of real economic consequences like unemployment and inflation makes you a useful idiot.

  • JKTH

    The point about the ACA could be broadened to more be “don’t make policy to preemptively shield yourself from Republican attacks.” There’s no good faith going on. That’s how Republicans can complain about exchange plans being too generous and having too high deductibles in the same sentence. Or say we’re turning into Greece and taxes are too high in the same sentence.

    • FlipYrWhig

      But deficit fear-mongering isn’t solely a “Republican attack.” It’s also a DLC/technocrat attack arising from within a substantial portion of the Democratic Party, its politicians, its staffers, and its consultants.

      • liberal

        Do you still support Obama’s nonsense about “tightening belts,” then?

        • Rob in CT

          “Have you stopped beating your wife?”

          One can think Obama is a good politician & a good President and also think he’s wrong about this or that particular thing.

          I recall most if not all of the commentators & FPers here thinking Obama was foolish to play with that sort of rhetoric (my assumption is that he believes it, not that it was just posturing) and wrong to seek a Grand Bargain with the GOP. Many were relieved when it turned out the GOP was too batshit to make a deal.

          Is there some reason you think FlipYrWhig is/was a deficit scold?

          • FlipYrWhig

            “liberal” likes to relive old skirmishes with me.

            As I recall, what I said at the time was similar to something I said upstream today about mortgages: BECAUSE the household analogy is never going to go away, I’m never surprised when politicians including Obama use it. But let’s refine it. The concept of “good debt” isn’t THAT foreign to ordinary people.

            • Rob in CT

              Ah, I see.

            • liberal

              No, at the time you were in favor of him using the phrase.

              As for old skirmishes, yes, I’m happy to relitigate old stupidities of liberal hawks who thought that overthrowing Qaddafi was a great idea.

            • liberal

              I should apologize somewhat…in the one clear thread, it was more “General Stuck” who was completely unrepentant. But he was (was…he’s dead now) an actual deficit hawk.

              You did say that you didn’t think use of the household/belt-tightening analogy by a politician was always wrong, as a tactical matter, which I strongly disagree with.

              • FlipYrWhig

                Right, and you’re strongly wrong for it still, because there will never be any alternative understanding of debt that overtakes the household analogy. What a politician does with the analogy is a different matter, as you said earlier about the idea of efficiency.

          • liberal

            “Have you stopped beating your wife?”

            One can think Obama is a good politician & a good President and also think he’s wrong about this or that particular thing.

            Ah, talking out your ass, huh? In the referenced conversation, he said there was nothing wrong with it.

            • ColBatGuano

              Nothing like reliving a 4 year internet spat. Go on, it’s making you look good.

      • JKTH

        I would assume that a health care bill that had near-unanimous support of Democrats in Congress would be acceptable to those people if they claim to be in the party. The VSPs are a different story but there’s no political reason to placate them.

        • FlipYrWhig

          But a health care bill that was deficit financed would go down in flames among Democrats, because at least a third of elected Democrats actually believe that deficits are horrific, either as a matter of good policy, as a matter of politics that will jeopardize their reelection, or both.

          • Murc

            I’ve been saying for years that at some point, the Democrats are going to have to get over their aversion to taxes. Stuff costs money. Deficits and debt do, in fact, matter if you run them long enough and high enough; Japan got itself into some real trouble on that score. We’re nowhere near that point yet but it ain’t impossible the GOP gets us there.

            So if we want to do stuff, we do have to pay for it. That means biting the bullet on taxes.

            • tsam

              I remember Al Gore running on “pay as you go” and Bush running on Fuck It, Man…

              • rea

                Mr. Reagan will raise taxes, and so will I. He won’t tell you. I just did.

                –Walter Mondale

                Remember how well that worked?

                • Rob in CT

                  America: Lie to me!

            • liberal

              Deficits and debt do, in fact, matter if you run them long enough and high enough; Japan got itself into some real trouble on that score.

              Not that I think we shouldn’t raise taxes, but is this really true, in this particular instance? What’s the current debt-to-GDP ratio of Japan? What’s their current borrowing rate? What’s their current inflation rate?

              • econoclast

                Yeah, Japan is a terrible example. Debt to GDP is 230%, while both inflation and interest rates are negative.

            • Rob in CT

              We’re nowhere near that point yet but it ain’t impossible the GOP gets us there.

              I remember a winger, about 7 years ago, who laid out what he thought was/is/should be the GOP long-term plan:

              1) When in power, jack up the debt. Spend like drunken sailors on stuff you like, cut taxes, the whole 9.

              2) When in opposition, scream and yell about the deficit to constrain what the Dems can accomplish. Ideally, the Dems have to spend their time shoring up the balance sheet and therefore cannot advance the liberal agenda.

              Rinse, Repeat.

              It sure seems to fit, and I honestly don’t know the best way to counter it.

              • jmauro

                On #2, turn off cable TV and do what needs to be done. They’re going to complain to no end no matter what you do, but there is no need to internalize it and do their dirty work.

                If the New Deal taught us anything providing broad, non-means tested benefits and improvements in governance to people can solidify and keep the other party out of power for a long time. (The New Deal was so successful that Republicans of the era mimicked the Democrats until 1980 or so).

                • Rob in CT

                  No sure it plays out that way w/o WWII, though.

            • cgordon

              “Deficits and debt do, in fact, matter” Yes, because they have consequences for unemployment and inflation. Unemployment and inflation are real concerns, the deficit in and of itself is inconsequential and should be completely disregarded.

              “Japan got itself into some real trouble on that score.” Japan is doing just fine. Their economy reflects their demographic reality. Old people don’t need a lot of economic growth.

              “So if we want to do stuff, we do have to pay for it. That means biting the bullet on taxes.” The Federal Government finances its spending by printing money, not by taxing or borrowing. Taxing and borrowing serve to control inflation and interest rates. Their role in funding Federal spending is entirely incidental.

              • Rob in CT

                Try getting the average voter to accept MMT.

                • cgordon

                  Working on it.

              • jmauro

                Recent research has indicated that a huge chunk of inflation is entirely psychological and not derived from government spending at all. It’s why countries like Japan can spend like a drunken sailor with 0% inflation, while countries with balanced budgets, like Brazil, have massive inflation problems.

                Basically if the people are convinced we’re going to have inflation, we’re going to have inflation. If they don’t it won’t exist. I think once Volker broke the inflation cycle with his PR campaign, there hasn’t been any sort of public push to have it return and as such we’re unlikely to see high inflation (5%-6%) not even into the hyperinflation age.

                • econoclast

                  What is this research?

              • Murc

                The Federal Government finances its spending by printing money, not by taxing or borrowing.

                I am relatively certain this is simply flat-out untrue.

                • Lurking Canadian

                  It’s MMT doctrine. It’s “true” in the sense that axioms are always “true” by definition within the universe they describe.

                  Whether it’s “true” in the sense of “this statement meaningfully describes reality” is much harder to answer.

                • cgordon

                  I am relatively certain that every dollar in my pocket was printed by the Bureau of Printing and Engraving at the direction of the Federal Reserve Bank, and is signed by the Secretary of the Treasury and the Treasurer of the United States. Why do you suppose they did that?

                • Murc

                  I am relatively certain that every dollar in my pocket was printed by the Bureau of Printing and Engraving at the direction of the Federal Reserve Bank, and is signed by the Secretary of the Treasury and the Treasurer of the United States. Why do you suppose they did that?

                  … to establish a fiat currency?

                  Also I don’t understand this point. It is true that was use a fiat currency, that every dollar in existence, whether it has a physical existence or is just a notional dollar on a balance sheet, was printed by the US government. But you said:

                  The Federal Government finances its spending by printing money, not by taxing or borrowing.

                  And that’s… not true. At all. There’s a massive bureaucratic and legal apparatus dedicated to the collection of tax revenue, and many expenditures are financed directly off dedicated streams of this tax revenue. The federal government also borrows a lot of money; indeed, the entire global economy is somewhat dependent on the US government being willing to borrow a lot of moneys.

                  The government doesn’t just print money when it wants to do something. I’m aware there are economic models where it COULD do that. It currently does not.

                • cgordon

                  Yes, to establish a fiat currency. The purposes of which are three: To move real economic resources from the private sector to the public sector, to facilitate economic transactions in the private sector, and to satisfy a desire for financial savings in the private sector.

                  It is logically impossible for the government to collect dollars in taxes if it has not previously spent those dollars. And yes, there are some secondary purposes for taxes, like discouraging unwanted activities (alcohol, gambling) and assessing costs on users (gasoline taxes for roads). But the primary purpose is controlling inflation.

                  It’s hard to explain briefly, but the Federal Government doesn’t really “borrow.” It swaps securities (a form of money it creates) for reserves (a different form of money it creates). Then at some future point it does the reverse. The point of this is to drain reserves out of the financial system, so that it can control interest rates on those reserves which would otherwise fall to zero.

                • Murc

                  As near as I can tell, your entire contention rests on defining taxing, spending, and borrowing in ways that nobody else actually defines them, and on moving the goalposts around.

                  The government does gather tax revenue. It then spends that tax revenue. This, alone, puts paid to your claim no matter how much you try to claim that what it is doing doesn’t “count” as collecting taxes and spending them.

                • cgordon

                  Murc, it’s true I’m defining money differently than most people. Most people think money is “kind of like gold, only made out of paper…or something.” Money is, from the point of view of the issuer, a promise of value denominated in currency units, or from the point of view of the holder, a claim on value denominated in currency units.

                  The Federal Government used to promise to exchange its money for gold. They don’t do that any more, but dollars are still backed by a promise. The FG promises to accept the dollars it issues as payment for taxes.

                  The taxes the FG requires us to pay serve to create a need for dollars in the private sector, and therefore establish a value for the dollars.

                  There are certain laws passed by Congress concerning treatment of tax revenues that obscure these facts (debt ceiling, for example.) But there’s no other explanation for money that corresponds to logic and simple accounting rules.

                • Murc

                  None of which has anything at all to do with the existence of taxation, spending, and borrowing as commonly understood and defined.

                • cgordon

                  Again, there is no other explanation of money that is consistent with logic and simple accounting truths (no valid promise without an obligation, no financial asset without a corresponding financial liability, no blood from turnips, that kind of thing.)

              • tsam

                The Federal Government finances its spending by printing money, not by taxing or borrowing.

                No–they print money to cool down the value of the dollar at times, or reduce printing to stimulate it’s strength, but for the most part, the feds do debt the same way your local school district does. Bonds, then taxation to pay for the bonds. There can come a time when debt service gets to be a problem, but we’ve never hit that in the US–at least not in any significant way.

                • cgordon

                  My local school district doesn’t print dollars. Don’t know about yours.

                • tsam

                  Wat?

                • cgordon

                  The Federal Government and the local school board both create debt by making promises, the FG by issuing money and the local school board by issuing bonds. But the FG’s promise that backs money (you can use their dollars to pay taxes) is different than the school district’s promise (they will pay off the bonds with FG dollars).

                  There is an important distinction here. The FG can *always* keep its promise. The school district might not be able to.

            • efgoldman

              So if we want to do stuff, we do have to pay for it. That means biting the bullet on taxes.

              it’s funny, years and years ago (70s and 80s) George Fucking Will, of all people, had credibility because this very thing was his hobby horse.
              Of course then he went full metal asshole like the rest of them.

            • ColBatGuano

              You don’t have to tell people when you’re running about taxes. Just raise them later.

              Worked for Reagan and people still don’t believe he did it.

  • Murc

    I’m a little bit concerned with how this is handled politically.

    Right now, it looks like Schumer is trying to give the kiss of death to Trump’s infrastructure bill. “Sure, we think a trillion dollars is a great idea!” Running the Obama playbook basically, “if we say we like this thing, the Republicans will hate it and then it will die.”

    I’m just… not sure that’s going to work with an actual Republican President. The Republicans, for all their insanity, seem to understand American politics very well, and to the extent that they’re able to they’re going to want Trump to do well enough to get re-elected. This means they’re going to, as many, many people and the very topic of this post have noted, stop caring about some things they pretended to care very much about when a Democrat is in power. Not all things. But some things. And one of those things is deficits.

    I’m real concerned that they’re gonna come out with a giant infra plan that gooses the economy through 2018, and Schumer will be left staring at it and wondering how that happened. The Freedom Caucus seemed so sincere, he was counting on them to torpedo it for him!

    I’m also… hrm.

    I don’t like Trump being normalized, even as part of a political tactic. Genuine question: is it unreasonable of me to expect the Senate Dems to basically take a line saying “Yes, in fact, we will be opposed to anything that admitted serial sexual assaulter, serial liar, and noted racist Donald Trump proposes simply because he’s the one who proposed it. He lies. All he does is lie. If he told us the sky was blue we’d want a trusted third party to confirm. We consider anything he is for to be something we’re against unless proven otherwise.”

    Is that asking for too much? Would that be a bad idea on our parts even if we had the balls to do it, which we do not?

    • liberal

      I’m just… not sure that’s going to work with an actual Republican President.

      I agree with your overall sentiment, but my impression is that Trump wants to do his infrastructure bill entirely through tax cuts/credits to private sector companies. That’s a horrifically inefficient way to do it, so it’s not clear it’s a political win for the Republicans (in the sense that Keynesian fiscal spending ==> political win due to increased economic activity).

      • Murc

        I agree with your overall sentiment, but my impression is that Trump wants to do his infrastructure bill entirely through tax cuts/credits to private sector companies.

        So… he doesn’t want to do an infrastructure bill, then.

        • jim, some guy in iowa

          the only things we can say for sure about trump are 1) he can manipulate people and 2) he doesn’t have even a “Schoolhouse Rock” idea of how the government is supposed to work

          shorter me: if t says its an infrastructure bill good luck changing his mind

          • lunaticllama

            Trump probably believes giving tax cuts to developers is an infrastructure bill, because he doesn’t know what the commonly understood notion of that term is.

      • FlipYrWhig

        Trump’s whole economic agenda, to the degree that he has one, is going to involve funneling government money to companies on the basis of whether he likes their owners.

  • hickes01

    Sigh. Back on the Hamster Wheel again. Deficits balloon. Interest Rates skyrocket. Local governments are starved, fees and property taxes rise. But hey, Tax Cuts, right?

    • njorl

      Localities can raise needed funds by auctioning off the rights to place speed cameras every 30 feet. And to attract the best speed camera collection agencies, they can cut business taxes on the profits those companies earn.

  • bob333

    I have to say I am utterly shocked that all of sudden deficits are not the worst thing ever. Nor was I aware that gambling was going on in this establishment.

  • Jake the antisoshul soshulist

    Hoocoodanode?

  • AdamPShort

    In lukewarm defense of the Republicans, the deficit does not, in fact, matter, and is mainly a useful club with which to beat one’s political opponent’s policies into dust (since the public believes fiscal deficits must be bad. )

    IOW it is not simply in the”current environment” that worrying about deficits makes you a sucker, unless by “current environment” you mean “the global economic order that has existed for at least 70 years and quite possibly since the dawn of civilization.”

    Deficits are the point of money. They’re not a bug. They’re not a feature. They’re the entire application!

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