The National Debt and Niagara Falls

"Slowly I turned . . . "

Now with some lefty bright spots coming out, like New York City for instance, come parallel efforts at centrist sabotage. One such effort is embodied in the new online magazine, “The Argument.” I was driven there today by a new effort to rehabilitate deficit reduction by Jordan Weissman.

I’m not faulting Weissman’s intentions, ostensibly to protect the welfare state, but this is an old scam. I’m triggered by “national debt” or “deficit reduction” the way head stooge Moe is by Niagara Falls.

A tiny bit of history. In the 1990s there was an outfit known as the Democratic Leadership Council and its affiliated think tank, the Progressive Policy Institute. Both are still around. Back then they functioned as Bill Clinton’s support group and brain trust. Their objective was to marginalize the Left, including my employer, the Economic Policy Institute. One of them once referred to us as “European taxers.” What they did was help Clinton lose his majority in the Congress.

Their slogan was “cut and invest.” There were some cuts under Clinton, mostly defense actually, but little investment. The scam was the nostrum that the Federal budget had too much funding of consumption, at the expense of investment. We could certainly have used more investment, but there would have been no need to attack the safety net or Social Security. (Wags suggested that Monica Lewinsky’s, uh, activities saved Social Security from DLC/Clinton attacks posing as reform.)

We were fed all manner of horror stories about the unsustainable growth of the national debt. Ha ha. Here we are thirty years later and guess what, the same comedians are still telling us the growth is unsustainable, while the debt just keeps rollin’ along, like Old Man River.

The Clinton Administration and the Newt Gingrich House of Representatives in the 1990s did much to reduce debt, to the point where it could have been extirpated altogether in 2000. In the process, Clinton pissed away his healthy majority in Congress.

And guess what. The same clowns who had been whining about debt, exhibit A Fed Chair Alan Greenspan, then took it upon themselves to warn against eliminating it. Then the political party whose name begins with the letter ‘R,’ that had been whining about debt, went ahead under their leader George W. Bush to give away with tax cuts the budget savings painfully accumulated by Democrats. Obama comes in, again with a nice majority in Congress, and pisses that away again with a botched “ObamaCare” implementation, partly due to a botched design motivated once again by a stupid commitment to deficit reduction.

So are we going to start bleating again about the debt? Even the dumbest, most fossilized Democratic geezers have figured out that if Democrats do politically painful things in the name of deficit reduction, the Republicans will just dine out on tax cuts for you-know-who.

The politics of deficit or debt reduction are simple. Whenever progressives propose expansions of non-defense spending, we get demands for “pay-fors,” offsetting cuts to other spending or tax increases. This has the unambiguous effect of freezing all progress in Social Welfare. Of course, pay-fors are never applied to expansion of defense spending.

Weissman claims a creditable history of skepticism about deficit mania, but he insists that now things are different. Trumpismo is certainly something different. Should there be efforts to rein in Federal borrowing? Sure, but the frame for such appeals should be a new deal that is green, not sterile projections of debt and interest payments (misleading for other reasons).

Joe Biden had a better fix on these matters, thanks I believe to his chief economic adviser, the above-linked Jared Bernstein. I harbored some dread over whether Kamala Harris would have picked up this mantle. Alas, we will never know.

It’s hard to predict how a social-democratic platform would fare in a national election. It would certainly drive the other side into the kind of frenzy we see in reduced scale regarding Mamdani and New York City. Another obstacle will be certain Democrats quacking about “European taxers.” By contrast, I think we can be confident about what cannot win.

Trump’s unpopularity suggests a minimal Democratic stance is enough to prevail, but we saw how this worked last year, when there was no lack of information about how Trump would operate, and Harris’s insistence that she was not Trump. True enough, but we still got smoked.

The Clinton era is over. I read a funny bit yesterday. Riddle: what is it that, the more you describe it, the better people like it, until you name it? Answer: democratic socialism.