Joe Conason: 'Dick Cheney was right' and 'Deficits don't matter...'

[babylonsister]

Dick Cheney was right

Deficits don't matter -- and Republicans who are complaining about Barack Obama's spending are hypocrites.

By Joe Conason


March 27, 2009 | Dick Cheney once observed that "deficits don't matter," which may well have been the most honest phrase he ever uttered. His words were at least partly true, which is more than can be said for the great majority of the vice president's remarks -- and they certainly expressed the candid attitude of Republicans whenever they attain power. His pithy fiscal slogan should remind us that much of the current political furor over deficit spending in the Obama budget is wrong, hypocritical, and worthy of the deepest skepticism.

In our time, the Republican Party has compiled an impressive history of talking about fiscal responsibility while running up unrivaled deficits and debt. Of the roughly $11 trillion in federal debt accumulated to date, more than 90 percent can be attributed to the tenure of three presidents: Ronald Reagan, who used to complain constantly about runaway spending; George Herbert Walker Bush, reputed to be one of those old-fashioned green-eyeshade Republicans; and his spendthrift son George "Dubya" Bush, whose trillion-dollar war and irresponsible tax cuts accounted for nearly half the entire burden. Only Bill Clinton temporarily reversed the trend with surpluses and started to pay down the debt (by raising rates on the wealthiest taxpayers).

Republicans in Congress likewise demanded balanced budgets in their propaganda (as featured in the 1993 Contract with America), but then proceeded to despoil the Treasury with useless spending and tax cuts for those who needed them least. Even John McCain, once a principled critic of those tax cuts, turned hypocrite when he endorsed them while continuing to denounce the deficits they had caused.

But was Cheney wrong when he airily dismissed the importance of deficits? In the full quotation, as first recounted by Paul O'Neill, Bush's fired Treasury Secretary, he said, "You know, Paul, Reagan proved deficits don't matter. We won the midterms . This is our due." What he evidently meant -- aside from claiming the spoils -- was that the effects of deficit spending tend to be less dire than predicted. And that insight deserves to be considered if only because all the partisan barking over the projected deficits in the Obama budget is so hysterical -- as if nothing could be worse than more federal spending.

Such is the institutional bias of the Washington press corps, which habitually refers to deficits "exploding" and to the nation "engulfed in red ink," and so on. But in fact the United States has recovered from considerably deeper indebtedness than that now on the horizon. Besides, as history warns, there are things much worse than deficits and debt. One such thing was the Great Depression, prolonged when Franklin Roosevelt decided to curb the deficits that had revived the economy, and ended only when he raised spending even higher in wartime. Another was worldwide fascist domination, a threat defeated by expanding America's public debt to unprecedented levels during World War II. No sane person cared then that public debt had risen well above gross domestic product.

more...

http://www.salon.com/opinion/conason/2009/03/27/deficits/

[antimatter98]

1. They don't matter because the Fed/Treasury will print money, and American workers don't matter.

I mean: look at today. Trillions handed to banks with no strings,
but Americans being laid off in droves and losing their homes---and
guess what: our government only cares about the banks, and WILL FIX
the banks no matter what it takes. Americans? They can die.

This is what Cheney meant.

[babylonsister]

2. What are you doing here? Thank you for explaining what

Dick Cheney meant. Are you related?

[Tempest]

3. Do you even know when Cheney said that?

Here's a hint: it was long before the recession started or any of the financial problems surfaced.

In fact, it was long before the derivative market, which is the biggest reason for the financial crisis, was started.

[terisan]

4. What we are spending on definitely matters. Used to be guns or butter;now Wall St or healthcare.