Americans are being lied to about the deficit Republicans want to gut social safety nets, not cut the US deficit.

Americans are being lied to about the deficit

Republicans want to gut social safety nets, not cut the US deficit. Heather Digby Parton Last Modified: 22 Nov 2011 11:01 inShare3 Email Print Share Feedback

Senator John Kerry cited Republicans' 'intransigence' for the committee's failure to come to an agreement [Getty/AFP]   So far the super committee charged with stepping up to the plate and dealing with America's deficit does not have a deal. But if they make one, they won't be what you see on the screen. They will be super heroes and they could change sentiment around the world and save America from a debt crisis like Europe's. - Erin Burnett, CNN host, November 8, 2011   So we reach the end of yet another lengthy deficit reduction negotiation, and all signs at this writing point to failure.   This is actually very good news, although to hear the pundits tell it, the Four Horsemen of the Apocalypse will be trampling down the doors of the New York Stock Exchange and everyone in the US will soon be force-fed poisoned baklava at gunpoint. Indeed, if you followed the financial and political press over the past couple of weeks, you would have thought the world would literally come to an end if this arbitrary deadline to cut an arbitrary percentage of the deficit isn't met.   And yet, no deal means "sequestration" (also known as "the triggers") will kick in, which will mean brutal cuts to discretionary spending and defence starting in 2013. If the goal is to cut $1.2tn in order to set the country's fiscal house in order, why should all these deficit hawks care how the government gets there? Well, it turns out that this isn't really about deficit reduction at all. The entire exercise is about gutting the social safety net, thus giving the markets "confidence" in the United States' ability to govern itself.   Ironically, this was considered to be so important that our democratic government had to convene a secretive committee to meet behind closed doors and enact policies that go against the explicit desires of a vast majority of American citizens. In fact, among the chattering classes, defying the citizens has become the defining act of political courage. Nearly all of them have demanded that the Democrats brutally slash their signature social safety net programmes to prove their seriousness while assuming that Republicans could never agree to substantial tax increases.   And sadly, Democrats were more than willing to go along with this lopsided demand, labouring under the bizarre illusion that they would be rewarded by the people for doing exactly what the people didn't want them to do. The only thing standing in their way was the Republicans' unreasonable refusal to consider raising any taxes at all on highly profitable corporations and the greedy 1 per cent. In the end, even that small concession to allow the Democrats to save a tiny bit of face was too much and the negotiations fell apart.   The GOP intransigence is somewhat mystifying, since Republicans know very well that cutting taxes is always popular and they would have the opportunity to restore the lower rates as soon as they come back into power. It's true that a right-wing ideologue named Grover Norquist has made nearly every Republican sign a pledge to never raise taxes under any circumstances, but that hardly constitutes a commandment handed down from Mt Sinai. And having the Democrats beg them to agree to slash the social safety net doesn't come along every day. Still, they cannot bring themselves to take yes for an answer. And thank goodness for that. "The public cares far more about jobs than deficits, and a majority of Americns are opposed to cuts in Social Security, Medicare and Medicaid." The Beltway conventional wisdom will be unsparing towards the Democrats, however, regardless of their willingness to throw their own legacy over the cliff. It is an article of faith that despite their clear willingness to slash spending, the fact that they wouldn't agree to only cut spending makes them just as guilty as the Republicans who refuse to raise any taxes, ever, under any circumstances. The Democrats will be given no credit for their fetish for a "balanced" plan and demanding "shared sacrifice". In fact, the Republicans will now go into the election honestly claiming that the Democrats have proposed to cut Social Security and Medicare as well as raise taxes.   The polls have been clear and solid over time: The public cares far more about jobs than deficits and a majority of Americans are opposed to cuts in Social Security, Medicare and Medicaid. Even a majority of Republicans believe that the wealthy should pay more and that the "entitlements" should be left alone. Considering that the world is in the midst of an epic economic slowdown, this should not be surprising. At a time when average working families are feeling intensely vulnerable, the last thing they want is for the government to kick out another leg of the wobbly stool of their financial security. One can only wonder what would happen if the powers that be cared as much about the confidence of the citizen consumers as they do about the confidence of the markets.   But what about those triggers? Well, because they require large cuts in defence, which everyone knows the Republicans will never actually sign off on, it's highly likely that congress will find a way to scrap them too. After all, any agreement congress makes, it can also break. And it certainly appears that the Republicans have no intention of following through.   What about the threat of another downgrade, which has been furiously floated at the last minute? Well, it could happen. There's nothing stopping any of these unaccountable credit rating institutions from dispensing another dire warning. The problem is that the more they do that, the less anyone seems to pay any attention to them. When S&P dropped their ominous declaration after the debt-ceiling agreement, the Beltway had a collective case of the vapours, but the markets yawned. (Perhaps smart investors have figured out that institutions that gave triple-A ratings to sub-prime mortgage securities might not be the most reliable analysts.)   Does this mean that there will be no deficit reduction ever, and the country will careen off the cliff burdened by unending debt no matter what? No. In fact, if deficits are one's most immediate concern, there is another looming "trigger" out there that doesn't require anyone to do anything. If congress does nothing but name airports after Ronald Reagan and congratulate winning sports teams for the next year, the Bush tax cut legislation will expire in December of 2012 and most of the deficit will be magically gone. If they do the smart thing and put together a real economic recovery programme that works and fully wind down Bush's wars as well, it will be completely gone.  This chart tells the tale:   Obviously, those Bush tax cuts include tax cuts for the middle class, the expiration of which both parties have been unwilling to allow. And it may be unwise to do it at a time when there is already a lack of demand. But citizens have a right to some honesty from their leaders about what they are being asked to give up long-term in exchange for keeping those taxes below what they were during the Clinton years. And that is essentially what we are talking about here.   Perhaps they will agree that it's worth it to slash Social Security, Medicare and Medicaid on top of a whole host of other government functions rather than pay the same taxes they paid in the year 2000. Or they might say that they would rather the government turn its attention to getting the economy back on track by raising taxes on the wealthy to fund it. They might just say that they want the government to ignore the deficit for a time until the economy is working again and see what happens. (Certainly interest rates don't indicate that the markets are particularly worried, in spite of non-stop fear-mongering for months on end.)   The point is that the American people are being lied to about the deficit and their choices for fixing it (or not fixing it). And this dishonest campaign is being led by people with a long-standing animus towards the social safety net, who are seizing this moment of confusion to push through something without the permission of the people. This bait-and-switch is happening because financial and political elites insist on demanding "sacrifice" from ordinary people in order to preserve an unsustainable financial system, not an unsustainable debt.   Among those few politicians and economists who are not licking their chops over this unique opportunity to finally destroy any vestige of a welfare state, it is acknowledged that the economic slump and runaway healthcare costs are the main drivers of future debt, neither of which will be fixed by slashing government spending and health benefits. They will, instead, make both of those problems worse, in both the short and the long term. It is exactly the wrong thing to do at the wrong time.   But austerity is the new black plague expanding across the globe, and there seems to be no stopping it. In the US in 2011, gridlock is the only medicine, we have to fight it. If we are lucky, this Supercommittee failure will break the fever and refocus the government where the people want it to be - on jobs, economic justice and financial reform. If they don't, there's a little election coming up about a year from now, and the people may decide to find some representatives who will.   Heather Digby Parton writes the liberal political blog Hullabaloo.