Offset and Fed Up

Perry Event 2/1/2010

Rick Perry, via Wikipedia

We Globe bloggers have been sparring over the national debt now for more than a year but are no closer than ever to agreeing on much of anything about it. Anson Burlingame  posted recently about commentary on Rick Perry’s book, “Fed Up”, wherein Perry disparages the trend toward socialist programs beginning with Johnson’s Great Society.

While Anson, an avowed conservative, does not specifically defend Perry and has not read his book, he does defend the Tea Party in the sense that by creating the debt-ceiling crisis they forced national leaders to address the debt seriously. He has a point. However, in a comment to his post I pointed out two things. One is that the debt itself might not be the apocalyptically-imminent disaster that he and the Tea Party think it is, and secondly, that national finance is fundamentally different from family finance. I offered two web links to illustrate my points, one of which shows there are 35 nations with worse ratios than ours.

Still, given that the rate of increase in the debt is indeed alarming (principally because of healthcare, in my opinion), I will cede the point that something did need to be done about it and that the debt crisis did indeed draw attention to it.  If only that had inspired action on the underlying causes of the debt, I would be rooting for the Tea Party too, but alas, I fear it accomplished nothing of the sort.  What it did, because the parties will not work together, was damage the national reputation and the national confidence.

But now in this year of record natural disasters, House majority leader Eric Cantor is demanding offsets in spending to compensate for the additional money FEMA needs, most recently because of hurricane Irene, not to mention the ongoing flooding in Louisiana. Now admittedly Cantor is not calling for delaying aid, but he is insisting on the offsets for this specific purpose. I see this as comporting with Anson’s instincts as well.

So, what’s the problem? The problem is, as usual, in the details. The GOP controls the House, which in turn controls the money, and they will want the offsets to come from Democrat-favored programs. How do I know this? Because of Mr. Cantor’s and other Tea Party members’ track record. There was no suggestion of “offsets” when they asked for extension of the Bush II tax cuts, nor any bending, amid record profits, when Democrats wanted to close tax loopholes such as subsidies for the big oil companies. Mr. Cantor made no mention of any “offsets” in government’s favor when he voted enormous sums to bail out the largest firms on Wall Street.

So why does Cantor choose to make his stand relative to disaster aid with amounts that are tiny compared to what has gone down unquestioned?  Indeed, being a practiced politician he must know that for any Congress person to withdraw any kind of funding from their district is virtual political suicide.  No, what is needed is a sane budget going forward, something that requires both sides to work together and to compromise.

But what I see missing in the Tea Party’s ideology, in other words, is any willingness to compromise and work with the other party.  The Democrats, to their credit, have shown some willingness to compromise, but not on the scale needed.  They could start by discussing reasonable reform of Social Security such as means testing and small changes to eligibility ages.

Right now the preeminent problem is unemployment, not the national debt. This is the wrong time to make symbolic stands over relatively small amounts that will further weaken the national credit rating. This is what I told Anson:

I strongly believe that investment in infrastructure right now is an important part of the answer. Highways, bridges, dams, power grids, hospitals, schools. They need attention and the people need work. It is a natural match, and the pay the workers earn will be multiplied throughout the economy. But if we take the simplistic approach of simply cutting spending we will be doomed to Hooverville. The Tea Party may win their way, but if they do there won’t be much left in the rubble to work with, come January, 2013.

Look at the list of national debts again – the cliff is not as near as you think.

About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Democratic.
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11 Responses to Offset and Fed Up

  1. IzaakMak says:

    There was a very alarming show on The History Channel called “The Crumbling of America” that revealed in frightening detail the sad state of America’s infrastructure. If you haven’t seen it, here’s a “trailer” of sorts I found on Youtube: The Crumbling of America

    I saw it right around the time they were debating the first stimulus program so I naturally thought that the money would be used to puts lots of people to work heading off a disaster in the making against which most other “threats” would pale. But as far as I can tell, all that money was wasted on golden shovel, photo op projects that were aimed more at winning votes than solving real problems. Such waste only serves to support those who don’t want anything done that’s paid for by taxpayers, even though projects so massive cannot be done any other way.


  2. John Erickson says:

    I understand the unpopularity of the “New Deal” with the far-right wingers, but I’m surprised that President Obama hasn’t put something forth very much like the WPA. The excuse of “under-employing” people doesn’t really carry water, as there are vast numbers of “under-employed” in the market today, and both parties have admitted as much. And there’s no question of our crumbling infrastructure, as every news network seems to feature on at least a weekly basis. I think something far more definitive like a new-born WPA would also go down better than the vaguely-defined stimulus programs and “quantitative easings” with most people. (I realise that QE is not directly related to jobs.)
    My biggest fear is that both parties will turn to an easy target – the military, claiming a “peace dividend” as we wind down operations in Iraq, Afghanistan, and Libya. I will agree that we don’t need Cold-War levels of procurement, but the gear of war is tired and in need of replacement, and we have a LOT of wounded soldiers, physically AND mentally, to take care of.


  3. PiedType says:

    Maybe Obama’s speech this week will include something like a WPA program. With all the flap about it, and the solemnity of a joint session, the speech better include something big. Not that I plan to listen. Obama has spoken so much and said so little, I’ve gotten kind of tired of listening.

    But yes, I’ve wondered for months (or has it been years now) why we don’t institute some WPA-like program. The jobs are desperately needed; the infrastructure desperately needs repair. And it would be cheaper and safer to repair things before they fail catastrophically. It’s not make-work to fix things that need fixing.


  4. ansonburlingame says:


    Well folks, I responded to Jim’s comment on my own blog and will not repeat it here in it’s entirety. But one simple point is what exactly is our current and REAL debt to GDP ration. Some say it is “only” 60%. I on the other hand see both our debt and GDP at about $14.3 Trillion and thus 100%. That forty percent difference just to begin the debate is HUGE, like some $4+ Trillion huge.

    IF the debt to GDP is in fact 100% I consider that comparable only to WWII debt and THAT was brought down in plummeting style soon after the war by record growth along with high taxes on EVERYONE. Now look at future predictions for debt. No spike at all for ten + years in terms of debt reduction, none whatsoever.

    Now John, I usually like your comments and views. But when you say “only” the “far right wing” is concerned about the New Deal, I think you are wrong. I am NOT far right, though right of center I agree. And the way the concept of the New Deal is today with broke or breaking systems, i oppose that concept as, again, it is today. I even go so far as to question the constitutionality of Medicare. Where does it say in the constitution that there is a federal responsibility for HC. Nowhere without “oenumbras” that I can see and considering how it is bankrupting us something must be done about it, HC in general. On that we all agree.

    Now for WPA. Will anyone agree that the WPA or similar programs in no way got us out of the Great Depression. It took WWII to achieve that. Did WPA lessen the impact for some during those years by providing jobs, yes indeed and I will acknowledge that point. But to suggest that a federal jobs program will solve our economic problems today and use the WPA as a comparison, no way in my view. At best WPA was humanitarian and NOT a macro economic solution to the GD. (depression!).



    • John Erickson says:

      Anson- First off, I didn’t mean to limit disagreements with the “New Deal” solely to the far Right. They just seem to be the most vocal in opposing any discussion of re-introducing similar programs. Apologies for not being clear.
      Second, I was only suggesting a WPA-like program, not a clone of the WPA or even a re-introduction of a larger part of the “New Deal”. And I will definitely agree with you that it was the increase in US output, arming Europe and building up our forces, that pulled us out of the Great Depression so rapidly in the late thirties.
      BUT – and just like mine, it’s a big one ( 😀 ) – I would look at “Nouveau WPA” as being a “pump priming” program, not just a “make work” program as it was. Get the long-term unemployed working again, to put money in their pockets. That way, they use it to buy goods and services, generating demand. (No guarantees, but in economics, there are few guarantees indeed.) Since the need for rebuilding of infrastructure is roughly (VERY roughly) located around population centers where numbers of unemployed would be larger, you would address the unemployment AND infrastructure problems at their source, without any need for relocating people. (I know the CCC did that, not sure about the WPA.) And since the infrastructure projects would be finite, with (what should be) fairly unmovable deadlines, you avoid the trap of indefinite support, which should make the projects easier to budget and thus support.
      Though I will admit this – I am FAR from an economics expert. My “period” knowledge is of things military, and the economics of war, not the economics of the “New Deal”, and definitely lacking in the era of “modern” economics. So if I’ve stuck my foot in my mouth, I’ll just ask y’all be kind! (In all seriousness, as both you, Anson, and Jim have been – no complaints here! 🙂 )


    • Jim Wheeler says:


      Is it possible that the WPA and the CCC failed to pull us out of the Depression because they were not large enough, not bold enough? I think it is possible. But, that was unchartered economic territory and those programs were huge compared to any historic precedent and it took political courage to implement them. Before you answer, please consider my latest post, Money 101.



  5. ansonburlingame says:

    As an afterthought and before I be accused again of not offering solutions to HC, let me offer the following.

    IF the tendency of government to take care of “things” beginning with retirement in the form of SS and later Medicare, there is at least a point that economically today we have now gone to far in such efforts, entitlement programs. Yes, defense spending can be accused of such as well but for the moment let’s stick to entitlements as they exist today.

    Now I think we all agree that we must do something about entitlements, specifically, first HC and then SS. But the arguement is over what to do.

    Well if the federal expansion of responsibilities got us here in the first place, I see little validity to further the argument for EXPANSION of future federal responsibility to get us out of where we are today. It simply and macroscopically makes sense to me to REDUCE federal responsibility, not to go “back” but to move “forward” to a better economic America for my kids and grandkids.

    Is that too “simple” macroscopically and without getting into the old “humanitarian” trap as we usually do when such comes up?



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