Obama Wrong to Prioritize Deficit Reduction
I’m worried that President Obama is going to focus too much on the deficit in his State of the Union speech this week and in his actions throughout this year.
I’m worried because such a focus will make it less likely that he’ll be able, or even inclined to, pass the kind of massive jobs bill we need to bring down unemployment.
Not to push such a bill through would be a moral failing of the highest order: We can’t let 15 million people languish on the unemployment lines. And it would also be a political failing: He’s setting a trap for himself here because if he doesn’t solve the jobs problem, Democrats will face a debacle in November.
I’m also worried because the obsession with the deficit will give ammunition to those who want to shoot holes in Medicare, Medicaid, and Social Security—the programs that largely make up what remains of our safety net, especially for the aged and the disabled.
Obama himself is in favor of a Congressional bill establishing a bipartisan commission to study—and all but order--ways to cut costs in these so-called entitlement programs.
But I can’t stand that word “entitlement.” It makes us sound like we’re spoiled little brats to want the retirement funds we’ve already paid for, and the health care that should be our right to have.
There’s always trillions for war and bank bailouts, but when we come to claim what is ours, all of a sudden the cupboards are bare. If you’re concerned about the budget deficit, stop averting your eyes at the pricetags dangling from the Pentagon and Wall Street.
Also, the idea that Obama is still tilting at the bipartisan windmill is not a good sign at all.
Nor is it a good sign that the Democratic bill would fast-track any recommendations that this commission comes up with—providing no ability to amend or filibuster it. (See Dean Baker’s excellent commentary here: www.huffingtonpost.com.)
During his presidential campaign, Obama accused his opponent, John McCain, of wanting to cut Social Security.
If Obama and Congressional Democrats empower such a commission to justify that cut and then ram it through, this would be a huge double cross.
Matthew Rothschild is the editor of The Progressive magazine. To subscribe for just $14.97 a year, just click here.
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Comments
"You've identified a culprit - the only one that progressives can find."
No, there's plenty of blame to go around. There were the sovereign wealth fund managers who encouraged the financial industry to invent newer, riskier financial instruments, and made money; the senators and congressmen of BOTH parties who pushed for financial deregulation, took contributions from financial services lobbyists, and made money; the schemers who devised mortgage-backed securities and made money; the regulators at the Fed who failed to understand derivative swaps but signed off anyway, and made money; the agents who knew that the loans they duped people into taking were unsound, and made money; the Wall Street traders who bought and sold these securities, and made money; the banks that knew the loans were unsound, but took them anyhow because they could get insurance on the loans, and made money; the regulators at the SEC who knew something was wrong, but failed to pursue it, and made money; the ratings institutions that gave these WORTHLESS instruments AAA ratings, and made money; the insurance companies that didn't bother to research them, got stuck holding the bag, lost billions, then got bailouts, and made money; the hedge fund managers who saw the crisis coming, sold short, drove the economy down faster, harder and further than it would have gone, and made money ....
There's no shortage of blame. In fact, the only people who seem to have lost out in this mess are the millions and millions of people who lost their jobs; the families that have lost their homes; the taxpayers in general; those small businesses that have shut down; and the sorry fools who accepted the bad loans they were pressured to take.
But most everyone who caused this mess is doing just fine. As is generally true of capitalist economic disasters that put millions of people out of work, the people who caused it made a handsome profit.
Hooray for a deregulated free market! Let the market decide. The market will provide ... yet another disaster. Oh, and there might be a "correction" afterward that puts millions on the unemployment line. But that's how the economy works, you know? These things happen in cycles.
Is it really in our interest to have periods of moderate growth punctuated by catastrophe? There's something to be said for a government-regulated economy that is stable, predictable, and crisis free.