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Maya MacGuineas, one of the deficit scolds responsible
Let’s just stipulate something for the record. If the Congressional Budget Office were asked to step in and score John Boehner’s “Plan B,” it would score as an increase to the deficit by about $4.9 trillion over ten yeas. If CBO scored the Obama plan, it would score as an increase to the deficit by about $4.1 trillion over ten years. That’s because current law dictates that America goes over the cliff and stays there. It doesn’t contemplate any changes to the law. And if America went over this cliff, the resulting austerity would be so great that it would swing the economy into recession. It would also virtually wipe out the long-term deficit gap, even while it would probably increase it a bit in the near term, because of increases in automatic stabilizers. But over the long-term, the deficit would essentially be wiped out.
The fact that everyone in Washington, everyone on Wall Street, every economic analyst in America is freaking out over this possibility should tell you what you need to know about the importance of reducing the deficit. Both sides are trying their best to cut taxes from current law to avoid the near-term consequences of austerity. The debate comes from whether to cut taxes by $4.1 trillion or by $4.9 trillion. Both sides basically want to keep the spending cuts from the 2011 debt limit deal relatively intact, just shifting it around a bit.
The CBO also publishes an “Alternative Fiscal Scenario,” where they try to guess at what policies will get extended and what policies won’t. But that’s nonsense. They might as well consult a fortune teller. CBO’s job is to explain the consequences of current law and proposals to alter it. If they were honest, they would explain that Congress and the White House are currently negotiating over how much to increase the deficit.
This article covers a lot of this same ground. But it focuses on the case for doing a deal in January. I’m trying to explain the case for telling “deficit hawks” to shut their damn mouths. They’ve been exposed by this entire process as complete cowards, unable to deal with the consequences of their own rhetoric. They’ve demanded, in the most apocalyptic terms imaginable, a “deal on the debt” that led to the political construction of this cliff, which nobody can seem to figure out how to avoid. There’s nobody more responsible for the economic hardship in the aftermath than the likes of Pete Peterson and Maya MacGuineas. And the sad thing is that they won’t feel it. They’re incomparably wealthy, and they won’t face any challenges if a recession CAUSED BY THEIR ACTIONS hits. It’s the average working man and woman who will suffer.
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There is one way, and only one way, to make them feel it, though: Attack the capitalist system directly. Discuss it and its systemic, unfixable-as-long-as-it-exists problems in detail. And, more importantly, discuss solutions — alternative systems — like parecon (participatory economics) in detail — and begin implementing those alternatives immediately — a process which could absolutely be begun this very afternoon, literally, seriously.
If you really hate the capitalist class, there’s literally no other way you can them back, there’s nothing else you can do to them. Nothing. If you really want to attack the “one percent” (a term I loathe, but have discussed elsewhere), the only option you have to go after them is to go after the capitalist system itself. They will respond to nothing else, because they will never feel anything else.
That’s just the way it is. Even if you’re not a revolutionary, the only way to attack the uber rich is to attack capitalism — to become revolutionary. And the only way to attack capitalism is to have in your mind a clear alternative, or at least be in the processing of discussing one.
Anyone have any idea of Maya MacGuinness’s net worth? Has her whole career been as a dedicated tool of Pete Peterson?
David. Thanks for remembering these two stones in our shoes.
Maya and Petey Bazillionaire.
What about thing one and thing two, chairpersons of the Catz in the Hatz in the WH commission??/s
I’m not sure avoiding the effects of austerity is such a bad thing, especially if it leads to people waking up to the thoroughly corrupt system of government we have now. In a society where there is one set of rules for the wealthy and another for everyone else, civil unrest will come eventually. In fact, it’s happening already – gun violence, robberies, suicides…the skein is beginning to unravel and the elites know it.
As is always the case.
Callback to Jane’s (partial) list of Very Serious People on Peterson’s payroll.
http://fdlaction.firedoglake.com/2010/05/25/where-pete-peterson-spends-his-money-2008-grants/
I blame the politicians more for our predicament. They are supposed to represent the public’s best interests and they’ve betrayed us by representing these plutocrats’ best interests instead. These people’s ideas should have never been able to get into play but the corrupted politicians have empowered them to hurt the average working man and woman.
Z
Austerity is just tax evasion. Norquist and the Kochs are simply organized tax evaders. Instead of sneaking in through the back door they try to kick down the front. They want to universalize tax evasion. Its worse than tax evasion. In the case of the Kochs their wealth is the result of welfare for the rich. No more pork empires. No more righteous defense of pork. Trickle down needs to be associated with criminality as an attempt to undermine society with fraud and criminality. Thieves have stolen a society and it needs to be returned to its people.
It seems its actually capitalism which is the domination of the strong by the weak. The strong have integrity, but we have a system that makes it possible for people without integrity to thrive and at the expense of people with integrity.
These people, especially Mr. Peterson have been exposed as alarmists, liars, elitists, lackeys and much worse through how many election cycles, now, 6? Please tell us, who keeps bringing Pete and the circus back? Cheney said ” deficits don’t matter “. Obama governs this way, too. Hell, everybody does in a Deep Recession. Your article proves this isn’t the issue inside the budget talks. I think it’s really about the money spent on the DOD, CIA and the Federal contracts to certain companies within that sphere and the skimming going on.They can’t find how many hundreds of billions of dollars in this black hole? In Texas, newspapers speculated the state would lose 250-300K jobs due to the military cuts alone. Romney’s biggest bundler was a Texas homebuilder. Coincidence? Maybe Pete and his group are nothing more than corporate thieves using accounting and offshore banks to skim the MIC and then hide their money. Stranger things have happened. Patriotism and religion are surely the last vestiges of scoundrels in America. I’ll bet Pete and Co. are really pious, devout Christians, too.
David, the annual deficit was $1.1 trillion in 2012. Do you really mean to say that under Plan B it would be $6.0 trillion in 2022?
Oh yes there is. Bill Black details Barack Obama’s role as chief architect of the fiscal cliff. The worst I can say for Peterson, MacGuineas, and Rubin is that they convinced Obama.
Do you think Republicans failed to make clear to voters where they stand over the past two decades, and especially the past four and two years?
Given the Republicans long campaign for cutting entitlements and making life better for CEOs and worse for workers, and basically obstructing everything since Obama took office, do you think voters voted for Republicans “to represent the public’s best interests”??
Why do you excuse the voters from blame for the mess of the past two years and the next two?
I don;t care about economic analysts ,Wall St. or the CBO .Deficit hysteria is a humbug by which its Wall St . creators exploit sheepies and simpletons .It is not about tax evasion ,it is about private and public asset pillage and tax evasion exacerbates this systemic looting .Austerity creates depression that shrinks the revenue base ,and even without stabilizer outlays ,ratchets up deficits/debt .Nobody except those who stink with stupidity buy into debt crisis and the need for austerity to eliminate it .
The debt about which we know ,is mathmatically impossible to repay ,and there are literally hundreds of trillions in dark pools ,shadow banking and interest rate swaps,plus a quadrillion in credit default obligations for which we are at least 30% on the hook once cleared through international settlements accounting.Even after all the municipal , state and federal pension funds are rendered insolvent over the next year or two of austerity ,preferred bond holders will have deficits repay them .Then there is about $250 trillion in libor exposures ,and how many trillion from the insolvent money center banks and their double entry book keeping ? They admit to being insolvent with over 30 to 1 leverage,but say they have ”flow ” .
I guess these quadrillion aggregates were dismissed into the same denial rathole as Keynesian recovery .People who will accept this austerity scam would just as easily support Auschwitz .A true ship of cowardly ,mindless fools .
Hey mulp ,with Hoyer and the dems still supporting the pub’s SS chain ,how do you excuse your gangster posse ? One corporate party with two wing brands of shallow neoliberal choice .A duopolistic road to perdition .
No oppositional resistance requiring a pretext of strategy to get anything in return ,yet the dems cannot control their zeal to fuck retirees future retirees ,and poor grandparents trying to rear their kids children .
Looks like Maya has caused the end of the world!
Wigwam: no, in the terms David is using, the deficit would increase ~ $490B per year ($4.9T divided by 10). The figure is a total for 10 years.
As I understand it, the convention of doing the math on the basis of the effects over 10 years comes from the way the CBO scores budget proposals; a lot of times in the press you’ll just see the number without any reference to how many years the writer means, but they should always clarify whether it’s 10 years or 1 year (the other ‘sometimes convention’ that’s used).
Somewhat similarly, one of the favorite perversions of the deficit scolds is to throw out some ridiculous number like $75 trillion as “unfunded liabilities” of whatever program they’re trying to kill (never “defense,” of course) without revealing how many years they’ve projected ahead (75? 100?),and without any qualifier that who the hell knows what GDP, wages, income, population, age-class ratios, and other pesky stats and demographics will be in 75 or whatever years, a putting their moronic projection in context, making it look even more ridiculous.
Great comment!
“All justice comes from the barrel of a gun. [The Chairman]“
Perhaps David meant the per-decade deficit, but he wrote: “If CBO scored the Obama plan, it would score as an increase to the deficit by about $4.1 trillion over ten years.[sic]”
Roughly speaking, deficit is to debt what acceleration is to velocity. Is he really talking about an increase in the rate of increase of the debt? I’ve never heard of the CBO scoring things in those units.
You can have Austerity or Austerity. Republican or Democrat. And that’s the genius of our system – you’re Free To Choose, America!
However, I wouldn’t count on any of these scorched earth deficit reduction austerity regimes achieving their stated goal of zero deficits. Eenie Meanie Miney Mo – choose any one of them be it the Cliff, the Obama Plan, the Boner Plan or any mongrel permutation thereof, they are going to sink the economy. Yes Virginia it CAN get worse. And when it does and the economy rolls ass over elbows and heads for the bottom, tax revenues are going to keep declining right along with it.) Deficits aren’t really the problem. We have no trouble at all financing our government’s operations on excellent terms. The no-growth economy is the problem. Scorched earth Austerity Plans arbitrarily imposed to address this non-problem are likely to make the problem they propose to solve even worse, while wreaking havoc and painful destruction upon the people least to blame for our economic predicament.
It is the same across the Western world: Austerity is not the plan of an elite which confidently envisions a return to robust GDP growth nor the return of health to the real economy of making things people need/want to buy. All the bullshit aside austerity is fundamentally a plan to squeeze higher level of profits for themselves out of a system that appears exhausted and which they don’t anticipate will be in growth again for the foreseeable future. Growth won’t continue, except for them. It will continue at your expense. On the level of political economy, what is happening is the same thing when management decides to shed workers from a factory to make its declining operations seem profitable. Getting the last juice out of the rind of an old fruit, because no new fruit is at hand.
Austerity means this: Your national leaders in or out of government have no long term plan for return to general prosperity. None at all. We are now so degenerate as a society that our leadership don’t give a shit about general prosperity or long term plans. This is not a sudden development or a new criminal impulse on their part. The only new wrinkle is the crisis. They are just trying to refill their juice glasses at the rate of increase at which they had become accustomed. And the only way to gratify that urge that occurs to them now that our system is in crisis is to squeeze whatever they can find out of your body. They allowed you little enough before and over time that was less and less. But now they want even that back through Austerity Measures. They don’t know what else to do.
When corporations govern ,they have their media and politicos pursue growth policies with the maximal upside ,as evidenced with investment pouring into Vietnam and now Burma ,which can easily be turned into free enterprise zones against which we are supposed to compete after ”reforms” and fiscal consolidation .
This globalized investment into exploitative terrains requires trillions to expand bankster collateral bases ,and that collateral is acquired via asset stripping from austerity.For austerity to work the masses must buy into red-ink hysteria .and as always ,embrace policies to destroy themselves .As austerity creates economic depression ,this yields capital dispossession under which monopoly predators can buy our private and public assets for pennies on the dollar with the sidelined trillions kicking into M & A .as the aggregate sum of this quick-fix predation goes into collateral bases for a minimum 30 to 1 leverage in unregulated slave wage sites .
I explained above why the debt is unpayable ,and I fully realize most are not sufficiently gifted to comprehend abstract reasoning ,but a few are ,yet they appear to be too old and vain to admit a class war narrative is necessary ,unless having a recreational chat is the purpose .