First, Admit the Problem

It's Not the Deficit

Here’s the mistake made by President Obama and the Democrats that nobody is talking about: They have been too fearful of confronting our country’s three-year obsession with the wrong problem.

And here is the tea party’s greatest victory: It has made the wrong problem the center of policymaking.

The wrong problem is the deficit. The right problem is sluggish growth and persistent unemployment.

The paradox is that the deficit would be less challenging today if we had been less preoccupied with it since the 2010 elections. The deep cuts in government spending since then have slowed the very growth we need to make our way toward fiscal balance.

But relief may be on the way. More from political exhaustion than any change of heart, we may be about to take halting steps toward dealing with the issues we should have been grappling with in the first place.

The president’s defenders would assert that he has been careful all along to emphasize the need for short-term stimulus to get the economy moving and to insist that deficit reduction was his goal only for the longer run.

That’s true enough. But there are the words, and then there is the music. Since a Republican Party driven by tea-party thinking managed to make government spending and deficits Washington’s paramount concerns, the administration has backed off aggressive efforts to use government to pump much-needed energy into an economy whose tepid growth since the 2008 implosion has left 11.3 million Americans still out of work.

By putting so much effort into negotiating a failed “grand bargain” with House Speaker John Boehner in 2011 and subsequently agreeing to the sharp, across-the-board cuts of the “sequester” to get out of a crisis, Obama contributed to the deficit chorus. Because of the fiscal tightening, our unemployment rate is probably a point higher than it would have been otherwise. We’ve done a heck of a job on the deficit, reducing it from about 10 percent of the economy in 2009 to 4 percent now. We’ve done badly by the jobless.

The administration would argue that it did a lot to avoid even more damage. It had to play the political hand dealt it by the 2010 elections while also facing the overwhelming consensus among political elites that deficit reduction was urgent. The commission that Obama himself appointed, led by Erskine Bowles and Alan Simpson, spread this gospel with passion and zeal -- even if both acknowledged, usually in much softer tones, that the economy still needed a short-term boost.

Of course there should be no denying that we face fiscal challenges down the road. Over the next three decades or so, the retirement of the baby boomers will be expensive. Most of the spending will be in healthcare expenditures under Medicare and Medicaid. In an environment free from crisis-mongering and hyper-partisanship, passage of the Affordable Care Act could usefully have been seen as a first step toward what ought to be our goal: guaranteeing decent health coverage to all Americans, including the elderly, at a cost government can afford. And, by the way, no matter how successful we are at doing this, there is no way around the need for more government revenue as long as large numbers of baby boomers are around.

But all this should be the focus of a measured discussion over the next several years, not an excuse for a frenzy of cuts -- especially reductions right now that are only dampening the recovery. When the house is still burning, you don’t spend your time worrying about how to cut your heating bill in the coming decades.

The good news is that the capital is so sick of political chaos and of failed quests for big budget deals that Congress might actually address the problem right in front of our noses. Rep. Paul Ryan, the House Budget Committee chair, spoke last week of the futility of shooting for a “grand bargain.” This is a positive signal.

The most helpful thing Congress can do immediately is to get rid of the sequester cuts. A Congressional Budget Office study conducted at the request of Rep. Chris Van Hollen, the Budget Committee’s ranking Democrat, found that if left in place, the automatic reductions could cost up to 1.6 million jobs next year. Allowing that to happen would be folly -- and heartless, too.

So let’s douse the flames of slow growth and joblessness first. Government does better when it deals with one crisis at a time.

(c) 2013, Washington Post Writers Group

About the Author

E. J. Dionne Jr. is a syndicated columnist, professor of government at Georgetown University, and a senior fellow at the Brookings Institution. His most recent book is Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent (Bloomsbury Press).



Commenting Guidelines

  • All

ISTM that one of the main reassons for this mess is that the Tea Partiers and other ultra-conservatives seem to have no understanding whatsoever of even basic economic mechanisms.  Isn't it time that high school curricula included some very basic economics in their social studies programs?  (Of course, the teachers would also have to learn some.)

The HS economics class could at least get it across to students  that in the USA the main  economy idea  is  "money makes money' .. many immigrant groups along with the 1%s  children know this. The rest are in a rat race to get a well paying job.... The Tea Party flourishes in the poorest areas in the country.  

The name of the game pushed by the red state tea folk is "hate thy neighbor, blame thy neighbor." The recriminations against those whose homes where foreclosed upon as guilty of malfeasance and their own self-inflicted injuries has fueled the fires of disdain and numbness towards those who now suffer hunger, homelessness, unemployment and economic collapse. Everyone points to Detroit as a prime example of self-destruction with absolutely no compassion for all those injured by its demise and the demise of the auto industry that once made it great. The ridicule of compassion has blunted attempts at raising food stamps, extending unemployment insurance, the ACA implementation, and the severe cuts to welfare and other programs benefitting the poor and disabled. It is not just a need for stimulating economic activity; it is a general lack of feeling the need to bind up the wounds and heal the nation. I hope I do not survive to see what this society turns into as it neglects its future and denigrates its most vulnereable and needy citizens.

Add new comment

You may login with your assigned e-mail address.
The password field is case sensitive.

Or log in with...

Add new comment