Shadow Budgeting

There is a stark contrast between what the media and politicians say people are most concerned about and what the polls tell us. Right now, this is critically true about the Deficit Danger, made prominent by the Deficit Commission Report, the recommendations of the chairs, and the deadlock partisan stance of its carefully chosen members. Bowles and Simpson are screaming Jeremiads about the coming Doom if we do not start shrinking the deficit now. They demand we have a “grown-up conversation” about the real issues facing us. Really, gentlemen?

The critical shortage of jobs has long been way ahead of the deficit as a major public concern and increasing jobs does mean increasing the deficit in the short term.

Only 4% place the deficit ahead of jobs in the very latest polls.

http://tinyurl.com/2vz2fkr

States are bankrupt and cutting essential services from California to New York. They need federal help and it has been cut off. More aid to states will increase the deficit. It is a zero sum game in the short run, but in the long run ignoring economic stimulus – big economic stimulus – will significantly increase the deficit because fewer jobs and invested capital will produce less and less revenue to meet it. New Republican governors are axing plans to upgrade railroad infrastructure. Governor Christy’s sledgehammer approach to serious problems is too depressing to detail.

Also today, Democratic (Moderate?) Senator Kent Conrad waxed righteously wroth with a thunderous Apocalyptic sermon about the terrifying examples of spendthrift Ireland, Greece, and Portugal as if we were even remotely in the same boat. We control our own currency, they do not. Our currency is the reserve currency of world trade, theirs are not. Their total economies are much smaller than many of our states. And so forth.

There is public opinion and then there is public opinion about public opinion. It looks like the media are taking much of what the rich and their loyal servants are saying and equating it with popular opinion of what the people want. I guess it is not stupid for McConnell and Boehmer and Kantor to never say ‘we’ want or ‘I’ want, but “The American People” want, when it is patently untrue in most cases. Finally, Peter Peterson’s billion dollar campaign is paying off.

So much financial and media reporting for the “thinking man” in places like the Times and The New Yorker and 60 Minutes are often soap operas of the executive suite — inside struggles at Google, NewsCorp, and Goldman Sachs. I thoroughly savor the savvy and snappy writing of Ken Auletta, David Leonhardt, Michael Lewis and the whole gaggle of articulate flies-on-the-wall.

Yet, too often as a result the viewpoints and perspectives of those at the very top become the frame of much larger public policy questions.

People outside of Madison Avenue, Wall Street, Silicon Valley and Davos actually do have heartaches and struggles of their own humble dimensions – and even ideas and concerns about what priorities America must face realistically.

Defense spending, now at an annual quarter-trillion and most of which is not used to pay the additional horrendous course of two useless and tragic military adventures is not mentioned as a cause of the deficit and always off the table. It should go head-to-head with Social Security and see what we really need for real national security, which surely cannot exist if individual Americans are insecure. Dare we mention how the many serious casualties of our troops will add to the deficit? We can’t cut that, but we can prevent the cause.

After World War 2 the country was exhausted and our deficit in constant dollars was much larger than it is today. What did we do? America came up with The Marshall Plan and the GI Bill, and, often forgotten, the conversion of our immense war-bloated industrial base to peacetime production of both public infrastructure and private product consumption. Taxes at the uppermost reaches of income and wealth were kept at their wartime highs. Despite the abominable fashions and haircuts, the Fifties did very well economically.

Just think of how these measures would be greeted today: Our Money for Nazis! Free rides to elitist universities! We pay for bridges in Connecticut!

Now, in effect, the national discourse as directed by the major corporate media evades the question of good deficits and bad deficits, like cholesterol. Defense spending and breaks for the very rich produce good deficits, whereas health care and social services produce bad deficits. Nothing to quarrel about, if you are a Republican, a Defense Contractor, or a millionaire – make that billionaire – buddy of Pete Peterson.

Senator Conrad, so worried of us skirting the danger of becoming another Portugal, recently brought us much closer to it by voting against unemployment benefits at a time when they are most needed.

Whatever Conrad and the Deficit Hawks are, they are not grown-ups.

We simply cannot afford them.

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