[Vision2020] Hawks and Hypocrites

[Art Deco]

  [image: The New York Times] <http://www.nytimes.com/>

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November 11, 2012
Hawks and Hypocrites By PAUL
KRUGMAN<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html>

Back in 2010, self-styled deficit hawks — better described as deficit
scolds — took over much of our political discourse. At a time of mass
unemployment and record-low borrowing costs, a time when economic theory
said we needed more, not less, deficit spending, the scolds convinced most
of our political class that deficits rather than jobs should be our top
economic priority. And now that the election is over, they’re trying to
pick up where they left off.

They should be told to go away.

It’s not just the fact that the deficit scolds have been wrong about
everything so far. Recent events have also demonstrated clearly what was
already apparent to careful observers: the deficit-scold movement was never
really about the deficit. Instead, it was about using deficit fears to
shred the social safety net. And letting that happen wouldn’t just be bad
policy; it would be a betrayal of the Americans who just re-elected a
health-reformer president and voted in some of the most progressive
senators ever.

About the hypocrisy of the hawks: as I said, it has been evident for years.
Consider the early-2011 award for “fiscal responsibility” that three of the
leading deficit-scold organizations gave to none other than Paul Ryan. Then
as now, Mr. Ryan’s alleged plans to reduce the deficit were obvious
flimflam, since he was proposing huge tax cuts for the wealthy and
corporations while refusing to specify how these cuts would be offset. But
in the eyes of the deficit scolds, his plan to dismantle Medicare and his
savage cuts to Medicaid apparently qualified him as a fiscal icon.

And how did the deficit scolds react when Mitt Romney served up similar
flimflam, with Mr. Ryan as his running mate? Well, the Peter G. Peterson
Foundation is deficit-scold central; Peterson funding lies behind much of
the movement. Sure enough, David Walker, the foundation’s former C.E.O. and
arguably the most visible deficit scold in America, endorsed the
Romney/Ryan ticket.

And then there’s the matter of the “fiscal cliff.”

Contrary to the way it’s often portrayed, the looming prospect of spending
cuts and tax increases isn’t a fiscal crisis. It is, instead, a political
crisis brought on by the G.O.P.’s attempt to take the economy hostage. And
just to be clear, the danger for next year is not that the deficit will be
too large but that it will be too small, and hence plunge America back into
recession.

Deficit scolds are having a hard time with this issue. How can they warn us
not to go over the fiscal cliff without seeming to contradict their own
rhetoric about the evils of deficits?

This wouldn’t be hard if they had been making a more honest case on the
budget: the truth is that deficits are actually a good thing when the
economy is deeply depressed, so deficit reduction should wait until the
economy is stronger. As John Maynard Keynes said three-quarters of a
century ago, “The boom, not the slump, is the right time for austerity.”
But since the deficit scolds have in fact been demanding that we make
deficits the priority even when the economy is depressed, they can’t go
there.

So what we get instead, for example in a white paper on the fiscal cliff
from the Committee for a Responsible Federal Budget, is a garbled set of
complaints: The adjustment is too fast (why?), or it’s the wrong kind of
deficit reduction, for reasons not made clear. Or maybe they are made
clear, after all. For even as it rails against deficits, the white paper
argues against raising tax rates and even suggests cutting them.

So the deficit scolds, while posing as the nation’s noble fiscal defenders,
have in practice shown themselves both hypocritical and incoherent. They
don’t deserve to have a central role in policy discussion; they really
don’t even deserve a seat at the table. And they certainly don’t deserve to
have one of their own appointed as Treasury secretary.

I don’t know how seriously to take the buzz about appointing Erskine Bowles
to replace Timothy Geithner. But in case there’s any reality to it, let’s
recall his record. Mr. Bowles, like others in the deficit-scold community,
has indulged in scare tactics, warning of an imminent fiscal crisis that
keeps not coming. Meanwhile, the report he co-wrote was supposed to be
focused on deficit reduction — yet, true to form, it called for lower
rather than higher tax rates, and as a “guiding principle” no less.
Appointing him, or anyone like him, would be both a bad idea and a slap in
the face to the people who returned President Obama to office.

Look, we should be having a serious discussion about America’s fiscal
future. But a serious discussion is exactly what we haven’t been having
these past couple years — because the discourse was hijacked by the wrong
people, with the wrong agenda. Let’s show them the door.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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