Democrats Bragging on Their Deficit-Cutting Skills Helps Nobody, Hurts America

[phantom power]

The boom not the slump, is the right time for austerity, as John Maynard Keynes said 75 years ago. Certainly that has played out among these two Democratic Administrations. Clinton closed the deficit (in large part by raising taxes on the rich, incidentally) and the economy moved forward. In fact, the economic boom did most of the closing on its own. Obama closed the deficit in a time where the economy could not take up that slack, and the result has been meager.

There’s a good argument to make that the Clinton surpluses were very damaging. But in general, this point holds. I remember seeing Bill Clinton speak right before the 2008 election, and he said very plainly that Obama will not be able to engage in the same kind of deficit-reducing policies that he did during his Presidency. Initially, that held with the stimulus and some follow-on moves. Our large deficit is the only thing keeping the economy afloat amid weak demand. But for the last couple years, there’s been a noticeable pull back, and we have weak growth to show for it.

The idea that you can generate “credibility” from the serious Beltway people by slashing the deficit is a chimera. They still caricature Democrats as tax and spend liberals, and in this case, the economy suffers as a result of the deficit reduction. What would help politically is a better economy, but the story of the economy is so confused, and Democratic partisans so unwilling to set the story right, that such a prospect seems very far away.

http://news.firedoglake.com/2012/10/15/democrats-bragging-on-their-deficit-cutting-skills-helps-nobody-hurts-america/