How to Spot a Deficit Peacock

How to Spot a Deficit Peacock By Michael Linden January 20, 2010

Deficit hawks come in a variety of breeds. There are those who believe that the long-term deficits pose serious risks, but that short-term deficits are necessary and wise during a recession. There are those who believe that deficits are always risky and should be avoided at all costs. Both kinds of hawks are genuine in their concern over our nation’s finances and are sincerely committed to working toward a more sustainable federal budget.

And then there is another species of deficit bird all together: the deficit peacock. Deficit peacocks like to preen and call attention to themselves, but are not sincerely interested in taking the difficult but necessary steps toward a balanced budget. Peacocks prefer scoring political points to solving problems.

1. They never mention revenues.

2. They offer easy answers.

3. They support policies that make the long-term deficit problem worse.

4. They think our budget woes appeared suddenly in January 2009.

President Bush took office when the nation had a record budget surplus . Yet he turned that surplus into a record deficit after repeatedly cutting taxes while prosecuting two wars and enacting billions of dollars worth of new spending programs without paying for any of them. When President Obama took office in the Congressional Budget Office projected a budget deficit of $1.2 trillion for the year. The steep decline from record surplus to record deficit resulted in a nearly $3 trillion increase in publicly held debt, the largest debt expansion in American history.

The steep decline from record surplus to record deficit resulted in a nearly $3 trillion increase in publicly held debt, the largest debt expansion in American history.

President Obama inherited the least balanced balance sheet in 60 years, took office in the midst of the deepest, most dangerous recession since the Great Depression. A large budget deficit is both necessary and wise during a recession. The extra spending and reduced taxes that cause big budget deficits help counter the recessionary spiral and ease its negative effects. Unfortunately, two terms of fiscal lunacy left the country in a much poorer position from which to respond to economic conditions, and left President Obama with little fiscal room to maneuver.

http://www.americanprogress.org/issues/2010/01/deficit_peacock.html

Payback Time - Party Gridlock in Washington Feeds Fear of a Debt Crisis - Series - NYTimes.com

Payback Time - Party Gridlock in Washington Feeds Fear of a Debt Crisis - Series - NYTimes.com “After decades of warnings that budgetary profligacy, escalating health care costs and an aging population would lead to a day of fiscal reckoning, economists and the nation’s foreign creditors say that moment is approaching faster than expected, hastened by a deep recession that cost trillions of dollars in lost tax revenues and higher spending for safety-net programs.

Yet rarely has the political system seemed more polarized and less able to solve big problems that involve trust, tough choices and little short-term gain. The main urgency for both parties seems to be about pinning blame on the other, before November’s elections, for deficits now averaging $1 trillion a year, the largest since World War II relative to the size of the economy.…

The president is not giving up. On Thursday, administration officials say, he will sign an executive order establishing the 18-member National Commission on Fiscal Responsibility and Reform. He also will name as co-chairmen Alan K. Simpson, a former Republican Senate leader from Wyoming, and Erskine Bowles, a moderate Democrat from North Carolina who, as President Bill Clinton’s White House chief of staff, brokered a 1997 balanced budget agreement with Congressional Republicans.

“There isn’t a single sitting member of Congress — not one — that doesn’t know exactly where we’re headed,” Mr. Simpson said in a telephone interview Tuesday just before word of his role got out. “And to use the politics of fear and division and hate on each other — we are at a point right now where it doesn’t make a damn whether you’re a Democrat or a Republican if you’ve forgotten you’re an American.”

http://www.nytimes.com/2010/02/17/business/economy/17gridlock.html?th=&emc=th&pagewanted=all