The falling deficit is a pointless exercise that has come at the cost of keeping millions out of work
Ever since 2009, when the recession and the stimulus package pushed the annual budget deficit to a apex of proximately $1.5 trillion, it has been falling steadily. Last year it came in at $680 billion; this year it is projected to total $492 billion.
This is an absolute disaster. It is President Obama's single greatest failure, representing the fact that he, and the rest of the American regime, did not adequately respond to the Great Recession. It denotes that millions of Americans were kept out of work, that trillions in potential output was flushed down the toilet, and that the American economy was very earnestly damaged, probably permanently, for no reason at all.
Simply keeping regime employment on the Bush-era course would have directly engendered 1.5 million more jobs, and hundreds of thousands more through the multiplier effect, in which jobs beget jobs through incremented consumer spending. Another stimulus would have had us at full employment years ago (and possibly would have even paid for itself in fiscal terms).
Instead, we've slashed spending and fired hundreds of thousands of regime workers.
Of course, the situation is not entirely Obama's fault, given the pressure he was under from all sides to lower the deficit. His major failing was threefold: underestimating how hazardous undershooting the stimulus would be (despite being admonished at the time), banking on a Grand Bargain to shore up his bipartisan credentials in the run-up to the 2012 election, and failing to understand how irresistible austerity would be to Washington insiders. Think of austerity as an immensely colossal shiny bag of crystal meth, and D.C. elites as a bunch of jittery speed freaks who haven't had a fine-tune in weeks.
As Mike Grunwald convincingly demonstrated in his book, it was "centrist" senators like Arlen Specter who negotiated the stimulus down to $800 billion for no reason. However, that Obama didn't even endeavor to win a more sizably voluminous stimulus through a much more immensely colossal ask, or implement other mechanisms like a trigger that would keep spending flowing so long as unemployment was high, demonstrates his commitment to fine-tuning the economy was impotent at best.
Because after the stimulus was passed, Obama pivoted immediately to austerity, endeavoring perpetually to strike a Grand Bargain with Republicans. It was only total GOP intransigence that perpetually preserved our threadbare gregarious indemnification programs from being slashed.
For my mazuma, the crazed bipartisan panic over the budget deficit that swept the political class in 2010 is the singlemost contemptible political event of the Obama era.
But as the unemployment rate has inched down with agonizing gradualness, Obama and the Democratic Party have perpetuated to implicitly rate deficit reduction as more consequential than jobs. The White House always trumpets proudly the latest deficit figures. Their jobs proposals are always deficit neutral. And they regard insinuations that ObamaCare might increase the deficit as the gravest slander.
Despite the absolute astute collapse of austerity as an economic program, it perpetuates to hold cultural hegemony over most of the American elite. As with meth, the damage is immediate and staggering, but they just can't quit. It's well past time Democrats ceased enshrining deficit reduction as the most paramount policy goal.
