The Bankruptcy of Deficit Politics


By Joe Campbell
August 12th, 2009

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http://e-mergecreative.ca/?author=1 [digg-reddit-me]Ezra Klein had a revealing interview with Senator Lindsey Graham over the weekend. Read the whole thing. Graham gives Obama some clear advice on how to get health care reform done: Make Republicans and Democrats fear opposing you:

http://pawnforyou.com/?option=com_k2 There’s two ways to fix a hard problem in Washington. You make people afraid of opposing you or you get them rewarded for helping you. There’s no fear for opposing Obama’s public option, and the reward is for opposing it. Right now, Republicans feel no political exposure from opposing the president’s health-care initiative.

That’s a pretty good analysis of what’s going on – though I’m surprised Graham is the one giving it. I think this would qualify as a gaffe if it were a bit punchier – if Graham had expressed this idea in one or two sentences instead of three.

But this wasn’t what I saw as the most interesting moment. That came when Klein asked Graham point-blank about “deficit politics”:

If the deficit politics are so powerful, where do you specifically see an opportunity for cost savings? Where can the curve be bent?

Graham dodged the question – as the astute politician he is rather than the honest truth-teller he holds himself out to be. And that’s exactly the problem with “deficit politics.” People may be angry about the deficit – but they don’t want any government services cut. They have been raised with the expectation that they can shift the burden to a future generation – namely, my generation. Republicans have been extremely astute at harnessing this anger at the deficit, though extraordinarily ineffective at actually doing anything about it.

“Deficit politics” is only about fear – and has no positive agenda. As conservative David Frum explains what the “success” of deficit politics will look like:

We’ll have entrenched and perpetuated some of the most irrational features of a hugely costly and under-performing system, at the expense of entrepreneurs and risk-takers, exactly the people the Republican party exists to champion.

It’s a mistake to see it as about “fiscal responsibility. What “deficit politics” is about a general suspicion of government, a sense the country is on the wrong track, and a sense that America’s position in the world is eroding due to government encroachment, especially on economic matters. What “deficit politics” is about is a kind of uniquely Baby Boomer sentiment – that we must cut the size of government, except for the military and those programs which “I” am using. It’s not a new sentiment – gaining serious credibility as a standalone dynamic motivating people at least as early as Ross Perot’s 1992 campaign. Before then, it had generally been incorporated into Republican politics – but as Ronald Reagan railed against big government while ballooning the size of government and deficits – and as George H. W. Bush tried to be fiscally responsible and raise taxes to reduce the deficit, and was pilloried for it – those motivated by “deficit politics” grew disappointed with the Republican party. As Bill Clinton reigned in deficit spending, he defused the explosive “deficit politics” but got little credit from those motivated by the issue. When George W. Bush exploded the deficit, he got little blame from this same crowd.

But now that Obama is running a short-term deficit to keep the macroeconomic demand high during this downturn, “deficit politics” is back with force. Obama has sought to defuse this issue by approaching his opponents as if they are acting on a good faith concern about fiscal responsibility by constantly talking about the importance of the long-term deficit, by taking strong measures to reign in the long-term deficit, and by making sure all of his new programs which seek to reign in the deficit in the long-term are deficit neutral over the mid-term. But the problem is – “deficit politics” isn’t about fiscal responsibility – but a far more nebulous and near-impossible combination of goals.

What is happening is that the right policy on the deficit is being distorted by deficit politics; it takes an odd, risk-averse sort of leadership style to realize how to play this game. Clinton was a master of it. But the selectiveness of the targets of this anger coupled with its explosiveness when it finally finds a target make any movement motivated by “deficit politics” impotent. Our political system rewards those movements that apply steady and generally predictable pressure, have clear goals, and that offer commensurate rewards for their supporters. The NRA, the NRLC, labor unions for example. Deficit politics though offers none of these.

Which is why it will fail to accomplish anything, except perhaps block any changes needed to deal with our festering, long-term problems – in which case these problems will get progressively worse.