The GOP Foam Rubber Cudgel: The Debt Crisis as a Manufactured Outrage Moment

There is high drama surrounding the budget/debt/deficit discussions inside the Beltway.  Republicans leaving the “talks” because the Democrats insist on putting taxes (especially for millionaires and billionaires) on the table.  The components are made for political theater.   A Republican Senate Minority Leader making his point that the President should intervene and exercise his leadership to make the Democrats go along with what the GOP wants.  Democrats defending Medicare and Social Security, Republicans who insist that the social safety net programs must be eliminated, privatized, to save the nation from catastrophic insolvency….

Except that if the Congress of these United States did absolutely nothing the whole budget/deficit/debt crisis goes away by about 2016.  The CBO has charts:

(h/t Talking Points Memo)

What’s the major difference between the two charts?  The alternative chart (at bottom) shows what happens if the Bush Tax Cuts are extended.  Not to put too fine a point to it, but the Congressional Republicans are throwing a Tax Tantrum in the midst of their Manufactured Outrage Moment, and seek to use the resultant drama to insist upon the elimination of Medicare and Social Security as we know them, and to advance a radical pro-corporate agenda.

The GOP appears to be frantically waving a foam rubber cudgel crafted to appear real, but as with so many other examples of Manufactured Outrage Moments, lacking substance and weight.

So, we don’t need to address deficit/debt problems at all? Not. So. Fast.  We can and should pare down duplicative services, and this is not to argue that we can’t find some ways to make government more cost effective.  The problem with shaking one’s foam rubber cudgel is that the action masks real problems which deserve attention.

#1. We DO need to discuss Medicare.   However, the discussion we ought to be having concerns the implementation of Part D and the expense to the government from the non-interference clause which doesn’t allow the federal government to negotiate prices for pharmaceuticals.  We also need to discuss Medicare reimbursement policies which actually reflect the formulas in the original legislation.  We should also go a step further and discuss how much private insurance corporations are subsidized for various forms of supplemental insurance coverage.

#2. We DO need to discuss taxation.  We just don’t need to do it as if any increase in revenue from any source is a “tax on the American people.”  In essence what the Republicans are demanding is that we revise our Medicare and Social Security programs, and re-prioritize our government, in order to protect tax havens for companies that ship American jobs overseas, protect tax loopholes for profitable corporations, and give tax breaks to millionaires and billionaires.

What we do not need to do is to continue our attempt to function in a demand side economy with a supply side political theory.  The pleasant fiction that if the rich keep more of their earnings there will be more investment in economic expansion was a hoax, and remains a hoax.  A writer for the Financial Times explains:

“To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: “supply-side economics”. Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue.”

We wouldn’t be having this argument about deficit spending and the national debt if the politically expedient supply side theory had worked in reality.

#3. We DO need to discuss government purchasing policy.  On March 9, 2009 the Obama Administration issued a memorandum to agencies calling for improved purchasing and acquisition standards, calling for the following  Priorities:  …to  (1) strengthen contract management and internal review practices; (2) maximize the use of competition in contracting; (3) improve how contracts are structured; (4) build the skills of the acquisition workforce; and (5) clarify the role of outsourcing. [WH]  This effort needs to be continued.  In February 2011 the GSA and other agencies announced that they were revising and updating FAR (Federal Acquisition Rules) to create more transparency and accountability in government purchasing.  [GSA]

#4. We DO need to discuss the implementation of GAO recommendations which would reduce fragmentation and duplication of government programs.  The General Accountability Office released a report (2.21MB pdf) in March 2011 that offers several suggestions for trimming governmental operations in rational ways.   The Department of Agriculture could revise the administration of food safety in ways that would not jeopardize public health, realigning the U.S. military medical command could produce savings in the $281 million to $460 million range, we might shave $5.7 by eliminating duplicative efforts to increase domestic ethanol production, we could consolidate some 44 different job training programs now housed in at least three cabinet level departments.  The report was quickly grabbed by the GOP to “illustrate” how government could save money [TNR] and just about as quickly discarded when the GAO recommendations didn’t align with Republican ideology.  The report needs to be dusted off and discussed by adults.

#5. We DO need to discuss the fiscal implications of American foreign policy.  We can translate this as “wars are expensive.”  However, reality dictates that as long as we are dependent on fossil fuel then we need to pay attention to American interests in pipelines already in existence, pipelines in the works, and pipelines still on the drawing table, and how our interests are to be best protected.  We need to be aware of Chinese production and distribution on one end, to Turkey’s natural “energy bridge” on the other end, and of course, everything in between.

In order to put our fiscal house in order we could do with a great deal less tantrum tossing and political posturing, and a great deal more adult conversation about how best to collect and spend our tax contributions to our own government.   And, by the way — about those charts — they’ve been available since August 2010.

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