As the latest reports indicate that the U.S. economy is slowing down and the intellectual foundation for austerity economics has been discredited, Congressional Democrats are pushing back against President Obama’s austerity budget. Democrats in the Senate and even more in the House no longer see the logic in austerity cuts to social programs such as Social Security and Medicare given that the evidence contradicts the intellectual rationale for them.
And then there are the other Democrats — the ones who reject the entire premise of the current high-stakes fiscal fight. There’s no short-term deficit problem, they say, and there isn’t even an urgent debt crisis that requires immediate attention. This group could make it even harder for President Barack Obama to strike a grand bargain because they increasingly see no immediate need for either new spending cuts or significantly more revenue, both of which they say could further slow the economy.
And the numbers keep breaking their way.
But aided by a pile of recent data suggesting the deficit is already shrinking significantly and current spending cuts are slowing the economy, more Democrats such as Virginia Sen. Tim Kaine and Maryland Rep. Chris Van Hollen are coming around to the point of view that fiscal austerity, in all its forms, is more the problem than the solution.
This group got a huge boost this month with the very public demolition of a sacred text of the austerity movement, the 2010 paper by a pair of Harvard professors arguing that once debt exceeds 90 percent of a country’s gross domestic product, it crushes economic growth.
Turns out that’s not what the research really showed. The original findings were skewed by a spreadsheet error, among other mistakes, and it’s helping shift the manner in which even middle-of-the-road Democrats talk about debt and deficits.
Not to mention those things called “elections” where Democrats would have to tell their constituents why in the world, when all the evidence contradicted the necessity for it, they voted to cut Social Security and Medicare. Good luck with that.
The current budget debate in Washington is a case study in why the American people don’t trust their government. Despite all available evidence and good common sense austerity dominates the policy proposals of the White House and Congress because the rich 1% want it to, seeing an opportunity to cut Social Security and Medicare and further rollback what’s left of the social safety net. Hopefully there are enough reality-based lawmakers in Congress to stand up to Obama’s austerity budget and prevent further pain and suffering for the American people.
Photo by National Archives under Public Domain