Austerity Groupthink

By: Dale Bowling



I read two opinion pieces today that really spoke to me. Maybe because they say what I've been saying for a very long time.

The first is Paul Krugman's op-ed in the New York Times on groupthink in the Iraq War. http://www.nytimes.com/2013/03/18/opinion/krugman-marches-of-folly.html?_r=1& His observation was how all non-insider, anti-Iraq War opinions, interpretations and analyses by experts and by journalists were marginalized as not being serious enough about the threat of non-existant WMDs. It was because the people "in the know" were so sure they were "in the know" on Iraq that anyone who had a different take wasn't considered credible. We know now, of course that those who were "in the know" were actually "full of crap."

Krugman then takes this example and applies it to the question of the non-existant fiscal crisis. The Deficit has been brought down by spending cuts and revenue increases amounting to $2 Trillion. We are now at a historically sustainable level of debt. But groupthink says we still need to worry tremendously about debt and balance the budget, even though we've almost never in American history had a balanced budget. For debt to be sustainable, it only has to increase slower than economic growth and we were actually there, before the Sequester - which threatens to create exactly the kind of crisis that it was supposed to avoid. Hope you have a taste for irony.

The second opinion piece was Greg Sargent's piece in the Washington Post, http://www.washingtonpost.com/blogs/plum-line/wp/2013/03/18/the-morning-plum-being-the-party-of-austerity-is-not-the-way-to-win/, which shows that people support a decrease of government spending in the abstract, but when spending is decreased people don't really like it and they blame the party they think is doing that. So Sargent thinks this is bad for Republicans to push austerity because it will only blow up in their face.

These are both really good reads and I urge you to check them out.

The moral of the story is that there is a discrepancy between reality and people's ideas about what reality is. Reality shows that we were at a sustainable level of debt because it was growing slower than the economy as a whole. But perception has been that the Deficit represents a big problem that can only be solved by cutting back on government spending. The funny thing is that while that seems like what Americans want, when it happens they don't really want it at all.

So there is a phony debt crisis. America thinks Congress needs to do something about it. When Congress does, America doesn't like it.

If we funneled the resources we normally would use to try to correct the non-existant debt crisis to actually deal with the job crisis, America would be in a lot better shape.

The President himself recently expressed his interest and sense of urgency in spending money to help alleviate the employment crisis.

Who do you suppose is going to prevent that from happening? People who are claiming to be Deficit Hawks, but really are against government investment in America no matter how advantageous it proves to be.

So we as Democrats need to explain to whomever will listen that the deficit crisis is over. What we need to work on at this point is the job crisis. We will put America to work by concentrating on this real crisis, and save America from the waste of combatting a crisis that doesn't exist.

As I have said many times. what America needs now is a big infrastructure bill that will rebuild America. It will grow employment, expand the economy and leave behind a world class infrastructure that will serve to futher economic expansion in the 21st Century.

Democrats need to champion that. It will save America.

The Republican vision of the future now rests on cutting more that Americans don't want cut and hoping that the Private sector will see it in their heart to invest in America.

This hope is what has kept us in slow growth mode for the last few years. America deserves better.