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Budget Deficits & Blow Up Dolls
In the movie Lars and the Real Girl, the main character imagines that a female blow-up doll is his fiancé. To humor Lars, his brother and sister-in-law go along with the charade. Over the course of the movie, more people are drawn into the circle, until eventually the whole town is treating Bianca the blow-up doll as one of its leading citizens.
This seems to pretty well describe the debate over the budget deficit, except it's not clear that many people realize it's a charade. The main story is that Lars' budget hawk counterparts are upset that the deficits projected for 2013 or 2019 are too large. They want President Obama to commit to spending cuts and/or tax increases in order to bring these deficits to levels they consider acceptable.
The unreality of this picture is striking because the budget hawks seem not to notice that we are in the middle of an economic meltdown.
People are losing their homes through foreclosures at the rate of more than 100,000 a month. The default rates on credit cards, car loans and other debt is at record levels. Most of our major banks are effectively insolvent.
Home and stock prices have plummeted, destroying most of the wealth of the baby boom cohort as they stand on the edge of retirement. The economy is shedding almost 700,000 jobs a month, with the unemployment rate rapidly approaching the highest level since the Great Depression.
In this context we are supposed to be up in arms over the deficit projections for 2013 or 2019? This is a bit like someone complaining about the lawn not being mowed at a time when the house is on fire, it's just not the first priority. And the media all seem to go along with the charade - yes, they are very concerned about the projected deficit for 2013, just as the characters in the movie expressed concern about the health of Bianca the blow-up doll.
It is especially annoying to hear the whining from this group of deficit hawks since their whining in prior years helped to drown out serious discussion of the dangers posed by an $8 trillion housing bubble. While some of us were yelling at the top of our lungs about the imminent disaster that would hit the economy when the housing bubble burst, the media chose to focus on these deficit hawks with their dire warnings about budget deficits 40 or 50 years in the future.
Because the media and political elites chose to pay more attention to the deficit hawks than those warning about the housing bubble, we now get to enjoy the current economic crisis. And, one result of the economic crisis is (drum roll, please) ........record deficits.
To put the point so simply that even a Washington Post editor can understand it: because the media highlighted the views of the people who were ranting about the deficit rather than the views of people who understood the economy, we both got a wrecked economy and larger deficits.
The moral to this story is that the economy must take priority, not only because the state of the economy is what most directly determines people's well-being, but also because the state of the economy will be the most important determinant of the deficit.
The experience of the 1990s provides an example of exactly this sort of story. In January of 1994 the Congressional Budget Office projected that the deficit in 1999 would be $204 billion or 2.4 percent of GDP. This projection incorporated the impact of President Clinton's tax increase and spending cuts.
It turned out that there was a surplus of $125 billion in 1999, or 1.4 percent of GDP. This shift from deficit to surplus of 3.8 percentage points of GDP (equivalent to $540 billion in 2009) was not caused by further spending cuts or tax increases, it was caused by the strong economic growth of the period.
There is no guarantee that President Obama's policies will be successful in restoring strong growth, but they are clearly a step in the right direction. If we have strong growth, then our deficits will be manageable. If the economy remains weak, the deficit will remain a serious burden no matter how much we raise taxes or cut spending.
Someone has to tell the deficit hawks that their blow-up doll is not real. The issue is the economy, not the deficit.
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20 Comments so far
Show AllIt's also noteworthy that today's deficit hawks had no problem with spending under W. Money to kill is okay; money for health care and education is seen as waste; the joke is these folks also call themselves Christian.
Sioux Rose
AGING PACIFIST: It's the unquestioned near-reflexive allegiance to Mars in this culture, with its new cult of 21st century warrior kings... and where would they, or their wars of conquest, empire, and boundless ego(s) be without Mammon, the banker caste, supporting these exploits inclusive of their amoral massive rates of collatoral damage?
I understand your point but I disagree. Political posturing (i.e. deficit hawking) is nothing but a straw man argument to get people all riled up so the important matters of society are ignored. These make believe subjects get traction because of a money-influence-money-power loop from the elite to the newspaper editors to the politicians and back. They REALLY don't want to talk about anything of substance because they enjoy cheating the taxpayers too much. The moment they can talk about spending on war and social programs at the same time, I'll be totally flabergasted. They have become a caricature of politicians (Jubilation T. Corpone, all tatered and torn Pone). Wind bags and empty souls all. It's sad.
Yes, they do call themselves Christians. And, no, they are not Christian.
Agreed.
I agree Agingpacifist. I think it's funny how the deficit was being run up the past 8 years and that's ok. But when ever it comes time to spend money on the people, then its wasteful spending. When ever anything comes around that is going to be good for the country, its wasteful. But if it will line the pockets of a few. Then its a mater of national security or some other scare tactic.
Politicians are good at that. They being Reps and some Dems, set up the system to fail. Now that everything is so bad, the current administration is going through hell to try and pass legislation on the things we desperately need.
All because the prior administration trashed EVERYTHING. And Americans only have a 5min memory so they don't remember any of that happening.
Yes, American's memories are short, but longer than your view. The people are still comparing Obama to Bush and Obama still has huge popularity. The path is being set for a better future, but to keep on the path we must somehow make legislative priorities somehow seem as important as blow-up sex dolls...no easy task.
While I fully agree with _ D e a n _ B a k e r _ that we need to "tell the deficit hawks that their blow-up doll is not real"
AND I agree that "bit like someone complaining about the lawn not being mowed at a time when the house is on fire"
WHAT IS WRONG, is that the HOUSE ON FIRE analogy does NOT equate to only the FINANCIAL CRISIS.
Regardless if you do believe this FINANCIAL CRISIS was planned ( and far from accidental ) -- the fact is that the elitist people in power are clearly still in power -- and they are the TEAM of arsonists who lit the HOUSE ON FIRE
Please see my postings about the absolute dissolute debt of depravity unplumbed ever before in human history :
http://www.commondreams.org/headline/2009/03/26
TIME-STAMPs : npwr.luv March 26th, 2009 2:50 pm and npwr.luv March 26th, 2009 2:48 pm
http://www.commondreams.org/view/2009/03/23-0
TIME-STAMPs : npwr.luv March 23rd, 2009 12:27 pm and npwr.luv March 24th, 2009 11:42 am
http://www.commondreams.org/view/2009/03/22-6
TIME-STAMP :npwr.luv March 22nd, 2009 4:49 pm and
"In short, during good times, moral, intellectual and personality values devolve to the point where a society is ripe for manipulation by snake-charmers and con-men of Rasputin-like charisma. Individuals become emotionally volatile, egotistical, and intolerant of other cultures. The resulting suffering necessitate great mental and physical strength to fight for existence and human reason. Slowly, what has been lost is relearned. Difficult times give rise to the values necessary to conquer evil and produce better times."
The damn "blow-up" doll is just smoke and mirrors ( a pretty ballon ) to evade detection of the real culprits behind it all.
Namaste
right. disappointing that d. baker has sort of jumped on the obama bandwagon. it will take no time at all to figure out what handing over more trillions to bankers is gonna do for the economy,
Oh I have an idea, let's spend twenty trillion taxpayer dollars on the banks and then, well, everythang's gonna be alright right now! I can't believe the American People swallowed the whole thang ! Fleecing is no longer enough, now the rich want to skin us too! The last thing I need right now is another Jewish guru telling me more stories. Wasn't Greenspan enough! Off with their heads!!!
People are losing their homes through foreclosures at the rate of more than 100,000 a month. The default rates on credit cards, car loans and other debt is at record levels. Most of our major banks are effectively insolvent.
It was the Great Genius, Reagan, who repeatedly said, "Deficits don't matter." Cheesedick Cheney repeated this mantra endlessly during the regime of George Wanker Bush.
I've been one of those 'voices crying out in the wilderness' for some 40 years now - and nobody seemed to want to 'get involved with politics' (let alone economics) through all those years. Well, hells-bells, surprise, surprise! Politics - social rule - is THE ONLY IMPORTANT PRIORITY in any of our lives!
As for this article, it is a case of the pot calling the kettle black. All this talk about 'deficits' and 'GDP' is unrelated nonsense. Like the monopoly money that gets printed by PRIVATE banks and sold to us.
If I hear any more BS about 'strong growth' - on the same day as a report about Alaskans who can't heat their own homes - I'm going to scream! This is a finite planet - we've already had far too much 'growth' - it has to end. And so does stupidity, apathy, and GREED - a vice, no less, that leads to corruption every time. People better get their heads out of their asses and start doing something instead of staring at the idiot-box and cheering for sports idiocy. Human 'society' has become a dysfunctional organism - and Mother Nature abhors dysfuntion. Survival is supposed to be an instinct - but that doesn't seem true anymore. Most of the humans that I meet are more worried about petty priorities than actual SURVIVAL.
The 'money' - a computer entry, in most cases - is FAKE. The 'gains' and 'losses' - deficits and surpluses - are imaginary. The only 'real' things are commodities you can consume - food, water, energy, education, healthcare, shelter, etc - and that's why the 'rich' accumulate them. The rest - all that banking and economic nonsense isn't even real. Ignore it. Manipulate (massage) the numbers and equations - the way these toadies always have done, but in reverse - and those 'money problems' will all go away. It really is all that simple - and who is going to stop us? Only ourselves. Stupid is as stupid does.
My friend worked at the Toronto Stock Exchange for a while back in the 80's until one day he realized that he was paid to manipulate numbers about numbers about numbers about numbers about money. He realized that he was not actually doing anything. He quit, hung his suit on the fence, joined a thrash metal band and was much happier.
If a career banker were to go and pull a carrot out of the ground - it would be the first thing he had ever actually done.
>>It turned out that there was a surplus of $125 billion in 1999, or 1.4 percent of GDP. This shift from deficit to surplus of 3.8 percentage points of GDP (equivalent to $540 billion in 2009) was not caused by further spending cuts or tax increases, it was caused by the strong economic growth of the period
The growth was predicated upon creating a BUBBLE.
Look through history of Bubbles that have occurred in economies the world over. Revenues to Government via taxes go UP. Which is one reason Governments are so loathe to to anything to stop such bubbles...Grow revenues without a tax increase or without cutting spending!!
Almost too good to be true.
And it was too good to be true.
Economic GROWTH as measured by our economists is not a reflection of real wealth.
So when do we get out 'trickle down' rewards?
This is like being locked below decks on the Titanic.
So, all of us being adults here, we do know that the chief purpose of "blow up dolls" is to give horney humans a sex aid that only requires some hot air (plenty of that in DC) and some lubricant (translate $$$ from guess who) to deploy. No annoying emotions or human interactions and you get your desired release from having to confront reality.
It's all too funny--but not really.
Poet
Like Sarah Palin?
The hawks screech 'The deficit is too high, too high' and Obama team screeches 'We must bail out the big financial institutions- the sky is falling!' BS! It's all one big charade. And Baker doesn't see it. After the screeching's over, they all get together with their lobbyist sycophants and wank each other off. This government is now completely a corporate dictatorship that views the masses as tools to their own myopic, greedy, sick ends. Obama may sound like he cares about the masses, but he is demonstrating that he is beholden, if not a part of those elite sickos. Unless he begins to put his actions where his mouth is VERY soon, he will completely destroy any credibility he might have had- just as W did after 9/11. Don't hold your breath!
"Deficits don't matter, Reagan proved that." Cheney to Paul O'Neill when O'Neill protested the mindless tax cuts the Bush administration was proposing. And this was during relative economic prosperity
Dean Baker says "The moral to this story is that the economy must take priority, not only because the state of the economy is what most directly determines people's well-being, but also because the state of the economy will be the most important determinant of the deficit."
Right-on! And that's why we need single payer health care.
I'm a HR 676 fan, but Bernie Sanders has just introduced a single payer bill in the Senate. S 703. Call to thank him (202) 224-5141.
Maybe we can now get the Senate Finance committee to ask the CBO to "score" potential savings if we move to a NONPROFIT single payer system.
If Baucus, Grassley, and other profligate supporters of the private profiteers object, just say, "It's the economy, . . .!"