My View: Rats in an austerity maze
March 13, 2013
We John Q. Public citizens ought to feel like a rat in an economists
laboratory experiment waiting to see if the Great Austerity Experiment will
hurt us enough to be replaced by a Grand Bargain.
Movement toward eventual compromise is showing some shoots of green, but
freeze warnings have been issued, too.
Right-leaning economists tell us that the sequester (austerity) is not so
large since cuts are only 2.5 percent of the budget yet it will grow our
economy because it begins to reduce the deficit now. -That 2.5 percent is
deceptive -because so much of the budget is exempted. -Cuts are closer to 13
percent of the military budget and 8 percent of programs affecting the poor,
education, and science, and -national parks.
Economists and the independent Congressional Budget Office predict that the
sequesters austerity approach in the midst of recovery from the Great
Recession will increase -unemployment to 9 percent and our growth will fall
to 1 percent. -Even the much cited Simpson Bowles debt reduction commission
warned against making budget cuts while the economy was recovering from the
Last week hope sprouted. The GOP stopped threatening what Peggy Noonan,
Wall Street Journal columnist, has called ³government by freakout.² -We have
been leaping off cliffs into some scary abyss every month since November and
we were still facing government shutdown and the reincarnation of the 2011
debt ceiling debate later this spring. -There were even whispers of reviving
a Grand -Bargain later in the summer after the Great Austerity Experiment
The president kindled the thaw. -Responding to criticism that he had not
reached out enough and that is why the GOP claimed they would not
compromise, -President Obama -called their bluff and invited to dinner some
rank and file senators. -He even invited Rep. Paul Ryan, the GOPs Tea Party
policy wonk, to lunch. Ryan recently resurrected his proposal to voucherize
Medicare. -Obamas outreach continues into this week and next, attending
both party caucuses in the House and Senate. -The last time he visited a GOP
conclave was in his first term, when the same Rep. Ryan belligerently
challenged the presidents math and the GOP dug in deeper as the -party of
no. -It is a wonder the President wants to try that approach again.
Some say the GOP won because they forced the president to talk with them.
On the other hand, they may have lost this particular excuse not to
compromise. -The monkey of being uncooperative has settled once again on the
GOPs -back, leaving them vulnerable to being blamed for continued gridlock.
The Senate is where a Grand Bargain can take root, but the Republican House
is where all good attempts go to die. John Boehner, GOP House Speaker,
issued a freeze warning for any signs of a compromise -spring. -He
commented on revenue raising by closing tax loopholes (called tax hikes by
the GOP) when he retorted, ³If the president continues to insist on tax
hikes, then I dont think we are going to get very far.²
There are a few Republican senators who have indicated a willingness to
raise more revenue in return for more cuts and -if the administration bends
on some on entitlements. -Those are essential elements of a Grand Bargain.
Even Simpson Bowles deficit -reduction commission -concluded you just cannot
reduce the deficit without more revenue and changing eligibility ages for
Medicare and Social Security. There are less traumatic ways to revamp such
entitlements -than what Ryan or Simpson-Bowles -propose. -The extent of
trauma can also be reduced by increasing revenue, too.
Meanwhile, we rats in the lab of the Great Austerity Experiment will be the
first to know if austerity timed in a recovery will cause us enough pain and
anger to thaw House members .
For more, visit http://www.mufticforumblog.blogspot.com and