Learn to love the deficit: Obamanomics

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The statist-biased, lame stream media keep tolling the bell that deficits are good for the economy. One economist admonishes that it is “necessary for government to run big deficits” and that Obama should educate the public what all budget experts know — that we do not have a chronic deficit problem. Then there’s this gem, by John T. Harvey, contributor to Forbes, “Why You Should Learn to Love the Deficit: Federal Budget Fallacies,” that preaches “nothing could be more foolish right now than policies that reduce government spending or increase taxes.”

The holy grail of statists is government spending: the more spending, the better, because it grows government. They really believe government can spend its way out of debt and a gloomy economy. Millions of Americans are unemployed and the Bureau of Labor Statistics oddly does not count the millions who have dropped out of the system altogether.

Federal-budget-fallacy spokesman Harvey has the solution to put Americans back to work. He says, “The government can play a useful, indeed vital, role. They can … employ the unemployed as soldiers, sailors, airmen, marines, teachers, firemen, police officers, etc.” What he really means is big daddy government comes to the rescue and coerces unemployed Americans to work in jobs they may not have the background, desire or ability to properly fulfill. To statists, government is always the solution.

What’s the solution to our unemployment problem that doesn’t involve growing government? Solve the budget deficit. There are two ways to address the budget deficit: cut government spending and/or raise revenue (notice I said “revenue” not taxes). It’s so simple that a college student could figure it out.

Steven Greenlaw teaches economics at The University of Mary Washington in Fredericksburg, Virginia, and as far as I know he doesn’t write for the statist-biased media. Greenlaw gives a good explanation in two videos, “What’s Wrong with Budget Deficits” – Part 1 and Part 2. This is what should be on the CNN or Forbes business page, not the inane pontifications of what Obama should do that are sometimes found there.

Washington lawmakers managed on New Year’s Day to kick the can farther down the road because the bill they passed did not include spending cuts. The GOP capitulated to team Obama by agreeing to raise the tax rate on the top 2 percent of earners, along with other tax increases that would impact “the rich.” Republican Congressman Darrell Issa said they were blindsided at the last-minute as the bill was “absolutely filled with pork.” In order to get the bill passed, lawmakers had to tuck in special interest paybacks.

Pamela Seley is a regular contributor to The Brenner Brief. Twitter: @PamelaSeley

Pamela Seley is a regular contributor to The Brenner Brief. Twitter: @PamelaSeley

Then there’s GOP House Speaker Boehner who has been a disappointment to many conservatives. His “Plan B” proposal was a tax hike like the one Nancy Pelosi offered last year. Plan B also gave Obama a one-year extension to the debt ceiling. To hike both taxes and the debt ceiling is an oxymoron. It does not solve the deficit problem if both taxes and the debt ceiling are raised without spending cuts, especially if the spending cuts are the Washington version, which are no cuts at all.

Our debt has been growing at an astronomical speed since Obama has been in office. We are now at $16.4 trillion and growing, and there is not enough revenue to pay it. Obama is not concerned about the debt because he and Democrat lawmakers see nothing wrong with borrowing more money and raising the debt ceiling.

In Obama’s fiscal cliff speech he said “we can’t cut our way to prosperity.”  He also said “the deficit has to be reduced in a balanced way, by everyone paying their fair share.” The most egregious slap in the face to the GOP is when Obama says, “Republicans in Congress said they’d never agree to raise tax rates on the wealthiest Americans. We’ve now raised those rates, permanently, making our tax code more progressive than it’s been in decades.” Obama blames the GOP for the “debt” they incurred. What does the GOP have to say for passing the most progressive tax code in decades?

Republican Steve LaTourette was quoted that the GOP “got whooped” by the fiscal cliff compromise and that Obama is not serious about cutting spending, and perhaps never was. In effect, Obama told the GOP to stand down, and he got his way. Most likely, he will get his way with the next three fiscal cliffs ahead if the GOP doesn’t stand up.

Senate Minority Leader Mitch McConnell says the answer is not tax increases, but that government spending is the number one problem. Yet, he made a fiscal cliff deal with Biden at the 11th hour to increase taxes on Americans earning $400,000 or higher.

Does the GOP stand for limited government? If they do, then they will be serious about cutting spending and not imposing a poorer quality of life on us and future American generations. Otherwise, you will have to learn to love the debt according to Obamanomics.

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Comments

  1. Dan Mitchell at Cato would have a serious problem with that logic. Our problem is we don’t have Mitchell and others out there like him screaming what nonsense this is from the rooftops. But again, we lost and we have to come to the reality that there will not be comprehensive tax and/or entitlement reform because Democrats and their chosen one do not care about spending, the debt, or the deficit. Americans are going to have to learn to love Obamanomics because they voted for it. Now, they will have to live, or I should say, try to live/survive through it.

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