The deficit hawks never miss a chance to tell the American people Washington, D.C., has a spending problem. I think they even mumble the words “out-of-control spending” in their sleep.
Time and time again, they condemn the government’s profligate spending habits and ominously warn that if things don’t change, and change quickly, our children, our children’s children and their children’s children will be left with a tsunami of debt that will render them unable to achieve their goals, or even enjoy the same success as their parents.
Understandably, such extreme rhetoric elicits feelings of fear and apprehension from Americans who get their news on the fly. Thanks to the deficit hawks’ ominous clarion calls to action, the deficit has rocketed near the top of the charts in terms of important topics on the cable news channels and among legislators. So, despite the fact that the national unemployment rate still hovers at just under 8 percent and the economy is still weak, the U.S. gross national product fell by 0.1 percent in the last three months of 2012. And the deficit scolds may still convince Congress to slash spending in a way that is bound to further impair economic growth.
While the U.S. does have a large federal deficit, that is entirely the result of the recession the country went into after the housing bubble burst and private demand plummeted. To counteract the worst consequences of the recession, government had to push through a stimulus — although it should have been bigger and spent more wisely — and increase spending on things like unemployment insurance and food stamps. Without that increased government spending, the economy would be in far worst shape today, and unemployment would be higher.
Despite the fiscal hawks’ overblown rhetoric about out-of-control government spending, even Jan Hatzius, of Goldman Sachs, forecasts the federal deficit will be below 3 percent of the gross national product by 2015 — hardly a terrifying number. While I suspect some of the fiscal hawks’ real agenda is not to shrink the deficit, but to roll back the accomplishments of the New Deal and the Great Society, I think some conservative Democrats and Republicans genuinely believe shrinking the deficit is the most important issue of our time.
Some elected officials were even willing to crater the economy by voting against raising the debt ceiling. While I don’t question the sincerity of their convictions, the medicine they’re offering America is precisely what we don’t need right now.
To get an idea of what effect austere measures would have on our economy, one only has to look at the horrible economic situation in Britain. In 2010, Prime Minister David Cameron brushed off warnings from economists that austere measures would throw his country back into a recession and went along with his plan to slash spending while the country’s economy still was weak. The result has been disastrous for our British cousins.
“Sure enough, the sudden severe medicine cut short Britain’s economic recovery; and threw the nation back into recession,” Paul Krugman, renowned economist and New York Times columnist, wrote.
Britain’s dire economic situation should have completely discredited the deficit hawks on this side of the Atlantic. Their policy solutions were tried, and they failed massively. There is no good reason for our government to enact the same counterproductive policies as the Brits. President Obama and company should worry less about the federal deficit and more about the jobs deficit.
Andy Heintz is a political commentator. He previously was a Herald staff writer, now a sports reporter at the Ottumwa Courier, Ottumwa, Iowa. Read his blog at http://www.orble.com/just-one-mans-vision/