Belated Thoughts on the Latest Budget Crisis

Since I write a semi-regular blog that somehow or other seems to deal primarily with politics, I suppose I am obligated to say something about the recent debt ceiling debacle and subsequent credit rating downgrade. Here are some belated thoughts.

(1) Obligatory Political Irony: One quickly notices that a lot of the same people who had no problem with Wisconsin Democrats walking out of the state legislature rather than lose a fair vote fair and sqaure are shocked, SHOCKED! by Republican refusal to compromise until they get … whatever it was they wanted. Republicans are terrorists, Democrats are freedom fighters. Heard it all before. Once again we see that things Democrats are allowed to do are forbidden to Republicans. No doubt we will soon have an opportunity to see that things Republicans are allowed to do are forbidden to Democrats. I’m sick to death of political double standards, but of course I have no realistic hope of their ever going away.

(2) Compromise Means No One Wins: This is another one of those issues that gets my “What-if” Engine started on the idea of the US as a parliamentary system. I guess I end up with Canada, so maybe not such a great idea. Still, you have to wonder whether it wouldn’t have been better to just let one side or the other here just have its way. In one version we get serious and painful spending cuts that lead us into double-dip recession territory in the short term. In the other version government grows to 35% of GDP (from its historical 20%), we get a quick recovery and a nearly-as-quick inflation problem. To lay my own cards on the table, I suspect that in the first version the recession is quite painful but mercifully short, and soon after it ends the economy takes off rapidly. I suspect in the other version the recovery proves to be short-lived and we end up (eventually) back in stagflation territory, forcing the traditional solution. But what do I know? My point is that with the compromise, NO ONE knows, NO lessons were learned, and NO ONE is happy. At the very least, allowing Obama to try his massive debt-driven stimulus would answer the question about whether these things actually work.

(3) I Welcome the Recession: Recessions are terrible times to get a job, but they’re GREAT times to be in gradschool and even greater times to be an entrepreneur. Those options are on the table for me. Not to mention, I think a serious recession now and then is healthy – to shake up investment patterns, break us out of bad habits, etc. These aren’t the end times, prosperity will return, and we’ll be better off for having been forced to reallocate all this capital.

(4) Facing down a Bully by Accident: The Republicans in this scenario make me think of the movie cliche small kid who stands up to the bully even though he’s terrified inside, and it somehow works out for him. Those stories always ring at least a little bit false – not because I don’t believe that standing up to bullies works, but because I believe that just doing it isn’t enough. You have to do it like you mean it. And the thing about all those movies is that the audience can tell the hero is scared inside, which, by extension, means that the bully can too, and so more suspension of disbelief is typically required than I can give. If the guy can’t fool us, how does he fool the bully? (However, see – of course! – Buffy the Vampire Slayer for a believable version of this story. If you’ll spot me a few zombies, I mean.) Well, the Republicans seem like that to me here. They (sort of) won this battle, but something in their demeanor makes it clear they haven’t really got the stuff, and so I don’t think this will have really resulted in much of a shift in focus between the two parties. The Dems compromised because they got caught with their pants down, not because the Republicans really scared them. I suspect we’ll be back to business as usual before too long.

(5) Belief in a Liberal Media Restored: Over the years I’d been starting to doubt that the media really tilted left. There’s certainly media out there that tilts right too, so maybe it all evened out. But I think it’s fair to say that the media handling of this issue was pretty much pro-White House through and through. Reading the standard papers, you could be forgiven for not knowing that the House Republicans actually stood for and won elections, and on pretty much the line they were toeing. I’ll agree that it’s slightly undemocratic for a party that controls only one house to push as hard as it did – but with the obvious rider that there’s some leeway for signature issues, and controlling spending was definitely the signature issue of the last election cycle. Nevertheless, elected officials representing their voters more or less faithfully – which from any objective point of view is what the Republicans were doing for once – should not be talked about as out-of-control radicals. They were doing their jobs.

(6) Spending Cuts that Weren’t: Speaking of radicals, since when is it “radical” to call for spending cuts that reduce the budget to the modest level of Higher than Ever Before in History? It’s just ludicrous to call spending cuts that reduce a budget that’s several factors higher than it’s ever been before down to levels that remain several factors higher than it’s ever been before “painful.” Fuck off and get a job.

(7) Which of Medicare, Social Security and Defense most needs reform? ALL OF THEM!: I’m tired of Democrats being unwilling to talk about Medicare and Social Security reform, and I’m tired of Republicans being unwilling to do anything about Defense spending. All three of these things represent MUCH bigger chunks of the budget than they should, and NONE of them was ever intended to play the role its currently playing. Social Security was NOT meant to BE anyone’s sole source of income in retirement – it was merely meant to supplement savings. Nor was it meant to take care of people for decades: the original calculations had something like 5 years in mind. Clearly the retirement age needs to be raised. Anyone who thinks otherwise is not being serious. The American defense budget was never meant to prop up a global police force. Now, I’m willing to give some leeway for the emergence of China and the threat from Islamic terrorism, but both of these problems have been severely overstated. Again, anyone who thinks otherwise at this point is not being serious. More to the point, there are more efficient ways to contain China – namely letting Japan and South Korea off of their chains to do it themselves. As they really should do, after all: it concerns them more than it concerns us. Finally, I can’t really even talk about Medicare since I strongly feel it shouldn’t even exist. But since it does exist and is clearly unsustainably expensive, the Democrats need to stop treating talks of reforming it as taboo. One obvious thing to try: freer markets in healthcare. But I’m not allowed to say that in public – neither by the Democrats, nor by the AMA. Someone should give both the finger.

That’s my 7 cents.

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