Let's talk about “fiscal responsibility,” shall we?
Republicans love to use that term, don’t they? They became the “Party of No”™ by whining and complaining about the deficit pretty much every day, and using that as a rationale for trying to kill everything. Suddenly, they are so incredibly worried about the huge debt our kids will be left with; it’s almost touching, unless you consider the incredible hypocrisy involved.
You see, more than 90% of the current level of national debt was laid there by Republicans. They can seek to blame others for it, but the bottom line is, the only reason there should be concerned about the deficit now is because of the foundation the Republicans have laid at our feet. Their concern about our children and grandchildren might be touching, except for the fact that Republicans have already stuck them with higher taxes than would otherwise be necessary, had they not been fiscally irresponsible for the better part of a generation.
You see, folks, our government is supposed to run a deficit when economic times are hard. The problem with the Depression – the reason it held on for so long – was because Roosevelt was too worried about the deficit and didn’t spend enough money to grease the economy’s wheels. When World War II came along, spending had to go through the roof, and we ended up with a post-war boom period like no other. We came out of the Great Depression and World War II with a national debt that was so high, it represented 128% of GDP, but we had something to show for it; prosperity. By 1950, it was down to about 90%, and it continued to drop, even through infamous "stagflation" of the 1970s, to the point that, by the time Ronald Reagan took office and the Right Wing hit the fan, the national debt was around $950 billion, or about 33% of GDP.
Then, the “all new” Republican Party took office. It’s really important to remember that the current incarnation of the Republican Party is a different animal than the one that preceded Reagan. Before Nixon opened the floodgates to every racist cracker who was pissed off at the Democrats for giving blacks civil rights, the party was dominated by moderates; the “loyal opposition,” if you will. The “Taft Wing” of the party, as the right wing was known, was kept mostly on fringes, where they rightly belong. But beginning with Nixon’s “Southern Strategy,” which brought segregationist Democrats into the fold, a new breed took over the party, and dominated the politics. And they were ably manipulated by extremely rich patrons who saw the purchase of government services as their god-given right.
Thus, we found ourselves with a government, led by Republicans whose core belief was all about “starving the beast.” Their intention was to cut taxes as much as possible, because that would force the government to spend less money. Only they didn’t spend less money; they spent more. While they cut taxes on the rich, they also guaranteed huge contracts and subsidies for those who were already receiving the bulk of the tax cuts. Oh, there were spending cuts; jobs programs, programs to help the poor and student financial aid were among the programs they either cut to the bone, or restructured to our detriment. Yes, that’s right; the reason college students come out of school in debt up to their eyeballs is because Republicans made it that way.
The Republican Party essentially created an economy that was based entirely on borrowing from others and using that money to pretend we were wealthy. They actually borrowed money to engineer a series of phony economic booms by creating a cache of fake money. They gave you the fake money, while their cronies took the real money. If you feel like you have less than you did 30 years ago, it's because you do.
Yes, that's right; the party of "fiscal responsibility" did this to you. Tell you what; if anyone would like to give me a credit card with a limit of $10 billion dollars, and add a stipulation that I never have to pay the money back, except for an interest payment every quarter or so, I could live like Bill Gates. But here's the question; if I do that, am I actually rich, or am I just pretending?
In the nearly 200 years the country had existed before the right wing took over the Republican Party and the government, we had only borrowed a total of $950 billion. By the time Bill Clinton was elected in 1992, the debt had quadrupled, to $3.8 trillion. This was at a time when the Reaganites were constantly repeating the mantra, "longest peacetime economic expansion in history. But ask yourself; if the economy was expanding so mightily, why were we borrowing so much money? How did we make it through 200 years borrowing less than $ trillion, but suddenly, we can't get through 12 years without borrowing $3.5 trillion? We can all understand living off credit cards for a few months while you’re unemployed, but when you get a job, shouldn’t one of your primary goals be to pay the money back? What do you call a guy who is in that position, and when he gets a job, the first thing he does is to run up the credit card balance more, by buying a Playstation, a plasma TV and every electronic toy he can get his hands on. Many of us would call him “irresponsible.” You might as well call him “Republican,”because that’s exactly how they ran our government.
During the Clinton presidency, there was relative calm with regard to the deficit; the debt level didn’t go down, but we did start running surpluses, and it stabilized. The debt level in 1992 represented about 59% of GDP, and in 2000, it was 58% of GDP, and with surpluses as far as the eye could see, it was at least stabilized, and it was possible to envision paying some of it down for once.
Then the Supreme Court appointed Bush president, and Republicans took over Congress. They proceeded to cut government revenues to the bone, under the guise of “returning your money to you.”
The problem is, they weren’t returning anything to us. They were borrowing the money they were giving in tax breaks, and leaving the bill to our children and their children. Isn’t it ironic that the party who renamed the Estate Tax the “death tax” as a pretext to cutting the hell out of it would leave our kids a debt that will probably prevent them from seeing significant tax relief anytime soon?
Too bad they don’t understand irony.
And don’t listen to their plaintive cries about Congress being the only body that can spend money, and thereby attempting to imply that Democrats are just as responsible. That’s bullshit. The budget originates in the Executive Branch, and the final budget bill must be signed by the president. Therefore, the president decides what the government will spend money on, and Congress has to send him a bill he won’t veto. If they send him one he does veto, then the government may have to shut down, which is no good for anyone. Besides; Democrats in Congress were actively trying to spend less money; six of the eight budgets sent to Reagan for his signature, for example, were smaller than the ones he sent to them in the first place.
The time to worry about high deficits is when the economy is doing well. When the economy’s doing well, we should be preparing for the inevitable downside of the cycle, and resist borrowing money that we don’t need. Do you know what’s really sick? The fourth-largest single expenditure in our budget for the last several years has been debt service. The only segments of the budget that are higher than the interest we’re paying on the national debt are Defense, Social Security and Medicare. In FY 2008, the government paid $454 billion in interest payments, with half of that going to foreign governments. That represents 9.5% of government spending. (Source: GAO, Citizen’s Guide to the 2008 Financial Report of the United States Government.) The Obama Administration has managed to negotiate lower interest for the current fiscal year, which has saved us more than $100 billion, but what happens if our creditors feel the need to increase rates in the future? There’s nothing to prevent that $454 billion from going much higher in the future.
Think about that a minute. At the same time Republicans in Congress were whining about the $750 billion the government spent on economic stimulus, so that average people could count on a job to keep their families afloat, they knew that half of that amount of money was going to pay interest on debt that they themselves had incurred.
Listen to them bitch about the “high cost” of enacting health insurance reform. They’re complaining about the “tremendous costs” of that reform, knowing that there would be more than enough money in the coffers if were weren’t forced to spend so much money on interest for debt they incurred. Again; at least 90% of our current national debt can be laid at the feet of Republicans; what if the government had an extra $400 billion last year? More than half the cost of the stimulus bill would already have been covered.
For the eight Bush years, Republicans took “fiscal responsibility” and threw it out the window. They kept the Iraq and Afghanistan wars off the books, and simply borrowed more money to conduct them. They borrowed money to pay Halliburton, Blackwater and dozens of other companies billions of dollars in “no-bid contracts” for many services the Iraqis were more than capable of providing for far less.
The current teabagger-influenced Republican Congress has backed itself into a corner once again. It has tried to convince everyone that the only way to cut the deficit is to cut spending. They are apparently too stupid to figure out that spending isn't even the reason for the huge deficit in the first place. Therefore, they are locked into an ideological trap that is guaranteed to not only not work, but make the deficit even worse, while doing nothing to improve the economy.
That's not to say the deficit's not a problem. Despite what Dick Cheney and the Republicans have said in the past, when they've been in charge, deficits do matter. But given the current state of the economy, it is absolutely necessary for the government to run high deficits for a few years. The reason the deficit is so high now is because so many people no longer pay taxes because they don't have as much money. The key to economic recovery and cutting the deficit are exactly the same; when you create more jobs, you create more taxpayers. More taxpayers cuts the deficit. Why do those who claim "fiscal responsibility" fail to grasp that simple concept?
Of course, the deficit would be far less of a problem had the Republicans not added at least $12 trillion to the debt during what they were bragging were “economic expansions.” If the debt was “only” around $2 trillion, no one would even be discussing this. We need more economic stimulus, and the government is the only body with the means to help people recover from the near-Depression caused by the Republicans’ ignorance and incompetence. We know the economy can handle a higher debt level than we’re currently experiencing, because we’ve gone through that before. But you have to admit, it would be far nicer to be discussing increasing the debt to a level equal to 20% of GDP, than talking about raising it from the current 90% of GDP to 110% of GDP or higher. We have to invest in real economic development – meaning we have to get back to manufacturing and selling goods, and get away from the Ponzi schemes Republicans have pushed in the past. We have to work toward making ourselves whole again. In other words, it’s not “fiscally irresponsible” to run a deficit right now. It WAS, however, fiscally irresponsible to run huge deficits while claiming the economy was doing well.
The next time a Republican says anything about “fiscal responsibility,” or whines about the deficit, just laugh and tell them to piss off. The current incarnation of the Republican Party are the most fiscally irresponsible politicians who have ever run this country.