The country’s best known Nobel economist, Paul Krugman, put it plainly: “[P]enny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems.” 
Democrats aren’t listening to Krugman. The House just passed a “budget enforcement resolution” that didn’t actually contain a budget, but did call for a spending cap of $1.12 trillion. That means $7 billion will probably have to be carved out of existing domestic spending. The bloated Department of Defense budget plus supplemental funding for Iraq and Afghanistan are exempt from cuts.
How do they propose to eliminate $7 billion in non-military spending? The details were left to President Obama’s bipartisan fiscal commission (aka the Catfood Commission), which is supposed to report a long-term budget plan by December.
The National Commission on Fiscal Responsibility and Reform was established with little fanfare last February. It is stacked with prominent advocates of drastic cuts to social programs, including Social Security and Medicare. Thanks to Monica Lewinsky, most people have forgotten President Clinton’s plan to raid the Social Security Trust Fund for the benefit of Wall Street. Now it’s back.
There is no way the Catfood Commission is going to recommend raising taxes on the rich, quickly bringing the troops home from Iraq and Afghanistan, or creating jobs for 15 million unemployed Americans. Those measures would balance the federal budget, but they wouldn’t benefit Wall Street as much as privatizing Social Security.
Marie Antoinette never said “let ‘em eat catfood.” But she was in favor of balancing the budget on the backs of low-income people, and that’s what the Catfood Commission is all about.
UPDATE: The hand wringing about $7 billion in budget cuts is astounding when you stop to think that’s ONE PERCENT of military spending. Also, the federal government hands out more than $4.5 billion a year to the oil & gas industry in tax subsidies alone (this does not include the federal leases auctioned off at bargain prices).
#1 by Ronald D. Hunt on July 6, 2010 - 2:30 pm
this commission brought to you by the same people that did this,
http://www.denverpost.com/ci_15437320
#2 by Dwight Sheldon Adams on July 6, 2010 - 5:50 pm
Very interesting, Ronald.
On the one hand, the community unity that comes from interdependence (rather than codependence on government) is laudable. On the other hand, should it be required in order to maintain a healthy physical environment. Isn’t maintenance of that environment one role of government if the people choose to divert their resources to it?
I think it’s a matter of choice. The people of that city have made a choice, and now some of them are going to suffer for it while others are made stronger for it.
We’ll see.
–Dwight
#3 by Ronald D. Hunt on July 6, 2010 - 6:07 pm
The way I read it, is that a few upper class area’s able to afford this charity where able to keep their parks, street lamps, etc. And that that everywhere else just gets to go without.
And yes they made the choice so all the more power to them, but this article is a very important one to show people what the end road of “conservatism”(or is it objectivism at this point?) is.
What sane person wants to live in a city where the police don’t show up for home robbery’s or have a fire department spread so thin that fighting fires could easily become a major problem. Its one thing to shut down municipal pools, and fence the big toys at city parks due to inspector/maintenance cuts completely another to cut safety the way they have.
Just seems to me that is a prime example of this tea party style going off the deep end nonsense.
#4 by Dwight Sheldon Adams on July 6, 2010 - 8:17 pm
I agree, Ronald. The people seem to have made a stupid choice. Furthermore, I see what you see—that natural separation of upper and lower class aided by a chaotic environment in which those who are insulated against it may thrive in spite of the underprivileged. We’ll have to see if that separation (which already existed, anyway) is exacerbated. It appears, at present, that it already has been.
I think that they’re likely to face an even worse backlash because of this; if gun laws increase crime as conservatives claim, you’d think they’d be able to see what happens when the police force is diminished. There are now motives in the city for an increase in crime, from both fronts: From want of necessities and amenities and from want of crime prevention.
I hope that this does serve as an example of the “end road of ‘conservatism.’” I hope no one suffers too much before the city makes a turnaround, but I at least have to value this as an experiment. Who knows? Maybe something will be learned from this more than simply that we were right and they were wrong. Maybe they’ll come up with new ideas and new ways of doing things by trying something that most of us are foreign to.
We’ll see. I wouldn’t do what they have done, but I’m still reserving judgment.
–Dwight
#5 by brewski on July 7, 2010 - 1:52 pm
http://www.cnn.com/video/#/video/podcasts/fareedzakaria/site/2010/07/04/gps360.07.04.cnn
This is the best debate on this topic that I have seen on MSM. Someone is right and someone is wrong. This debate is serious, honest and non-partisan.
On the other hand, Krugman does make the point that spending money, and spending money which creates jobs are not the same thing. He criticizes the alleged stimulus bill for beingg poorly designed to create jobs. In short, the stimulus bill was partly tax cuts (which can be saved and not spent), unemployment benefits (which may be a good idea but does not create jobs and Larry Summers has documented actually hurts jobs), and aid to states (which went to preserving state employee pension plans and rich benefits). Very little of this bill was actual stimulus in the way we mean it to mean works programs which created jobs.
So it is not enough to just point to numbers of dollars spent and say that more or less spending is the debate. It also must be about HOW that money is spent which is crucial. So far Obama gets poor marks for that.
#6 by Richard Warnick on July 7, 2010 - 9:43 pm
I think the White House made the mistake of thinking Congress would automatically add a lot more spending to ARRA, so they low-balled it.
Then Democrats included $275 billion in tax cuts in exchange for only two Republican votes in the Senate. Tax cuts don’t stimulate the economy, and don’t help those left jobless by Bush’s Great Recession. But tax cuts took up a third of the bill.
ARRA included only $90 billion for infrastructure. Conventional wisdom says infrastructure projects take too long to mobilize, since most recessions bottom out before this kind of spending creates many jobs. This recession is different, more like the Great Depression. We needed much more of this kind of spending, “shovel-ready” or not!