A not-unexpected reaction

Unfortunately, there’s nothing surprising about the fact that Republicans have now convinced the nation that the deficit, and not the lack of jobs, which is in turn due to lack of consumer demand, which is in turn due to the collapse of the housing bubble, is the real problem and that it must be fixed NOW!!!


The suggested solution, of course, is to cut government spending. Never mind that the government spends money because it is trying to meet real and serious needs. The battle cry is “We must cut spending!” The British elected a new Parliament recently, which set about “hammer and tongs” to cut Britain’s budget. How did that work out for them? Not well at all. Britain’s GDP showed a 0.5% contraction as opposed to any sort of growth.



“The Chancellor needs to get his head out of the sand. He doesn’t seem to understand that without jobs and growth you can’t get the deficit down. The slower growth, higher unemployment and higher inflation we now see under George Osborne means he is now set to borrow £46 billion more than he was planning to. That’s a vicious circle and makes no economic sense at all.


“Families know that cutting too far and too fast is hurting, but now we know it’s not working either. George Osborne can’t keep making excuses – it’s not the wrong kind of snow that’s to blame, it’s the wrong kind of policies. He needs to think again before it’s too late.”

Is it a good idea to reduce the deficit in any event? Actually, it isn’t. The US is seriously behind in getting our infrastructure fixed and up-to-date. Missouri just had to evacuate 1000 people from threatened areas because the levees in the town of Poplar Bluffs failed in four separate places. Nothing surprising about this failure. The levees were rated as “unacceptable” back in 2008 by the US Army Corps of Engineers. Why did this particular levee fail? The community simply couldn’t afford to keep it up. The US as a whole needs to spend about $50 billion in order to get all the levees back into shape (The US has 881 counties or 28% of the total number of all counties, that have flood control systems). Of course, people have been moving into areas that are protected by levees, so the longer levees go unmaintained, the more US citizens that are put at risk. In all, the US needs to spend about $2.2 trillion in order to meet all of our infrastructure needs. Curing the deficit by getting spending down is a very bad idea as our infrastructure will then be permitted to deteriorate still further.

Can the Democrats make the case for more federal spending? Well yes, but President Obama’s support for the “Cat Food Commission” (i.e., the Deficit Commission) directly contradicts the idea that the deficit is meaningless compared to getting Americans back to work. Essentially, Democrats would have to contradict pretty much everything that the party has been saying about the deficit for the past two years in order to convince Americans that jobs should be our number one priority.

Update: From Daily Kos Pundit Round-up

“Note in the [Stafford Act chart] that it’s the Governor, who asks FEMA, who asks the President to declare a Federal disaster or emergency so as to free up funds and relief that through the National Response Framework can be delivered to the states. …”

The federal response is intiiated by the state, and complexity and speed are inversely related. The wider the area affected, the slower the response will be (because supplies and infrastructure needs to come from farther away.) So let’s talk about cutting the budget, shall we? Especially for FEMA. (see GOP’s Continuing Resolution Cuts Funding for National Weather Service, FEMA.)  Brilliant idea.

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