I think I heard Obama make the same point in his debate with McCain - that the priorites of the federal government right now have to be aligned with stimulating recovery, not deficit reduction.  Long-deferred infrastructure investment and funding of green initiatives, revenue sharing to maintain state and local government jobs, extension of unemployment benefits, the middle class tax cut, worker retraining and and college loans, and universal health care can all be taken on.

For eight years, the other side cut estate taxes and income taxes for the wealthy.  They spent wildly on mistaken assumptions and false "intelligence" in Iraq.  They reduced the regulatory burden on business, and set the stage for the financial crisis - in which they have been willing to spend a billion dollars to bail out the corporate executives and investors with taxpayer's money.  

After all of this, and the Bridge to Nowhere to boot, I have no patience with Republican chagrin about the cost of the Democratic agenda.  Especially when it is exactly what we need to re-start the engines of growth and set up a century of prosperity.

Neil  

Surely, when it comes to deficit spending, the question should be "what do you get for your money?"  Because Republican deficit spending got us a whole lot of nothing.  Reduce taxes, fight a needless war, give a drug benefit away to the pharmaceutical companies, eliminate financial regulation, and voila!  Then after they lose an election, these same Republicans have the nerve to say, "Gee, the deficit is too high!  Cut back on your 'socialistic' plans, or else."

Well, damn the torpedoes, I say, and full steam ahead, provided we get something for our money this time: better roads and bridges, new information and energy infrastructure, improved health care, and better schools.  If we can't invest now, then when?  By the time this recession is over, Obama may be either out of office or running for re-election with nothing to show for it.

Investment is the right term, Tim. Obama needs to devise a stimulus package that includes green initiatives that will remake how we generate and use power in this country. Repairing bridges and highways is necessary but not sufficient, and I think he can get the votes for a green stimulus. What I wonder about is how successful he's going to be in reforming healthcare. This is an electric issue that lets a lot of Republicans howl at the moon about socialism and the destruction of middle-class entitlement. I expect he can get children's health care reform passed pretty quickly. If Bush hadn't vetoed it, it would be law already. But will Obama take the next step in the midst of a financial meltdown that promises to absorb much of his attention. Can he frame it the right way? Will he try? That's what I want to know.

I'd like Obama to take on Zakaria as an official adviser or give him some other serious role in the administration.  He offers an important and unique perspective on a lot of issues and would be a perfect fit for Obama's team of rivals.

Purcellneil is quite right, as are others who say that fiscal stimulus is more important than deficit reduction right now.  However, that is not at all inconsistent with fixing the structural deficit problem by raising tax rates for the rich while reducing them for the middle class and below.  One way to do this equitably is to raise the top bracket rates while simultaneously raising the zero bracket amount.  This gives a reduction in taxes per capita rather than according to income.  

The rich spend what they want on consumption without regard to net income.  Hence, there is no loss to aggregate demand in raising their taxes to keep the impact of fiscal stimulus from exploding the deficit.  Equally important, when the recession ends, we should find ourselves already in a tax structure that no longer produces structural deficits.  The time to do that is now when there will be adequate political will.  If we end up in a deep recession, there is likewise nothing to be gained by leaving more net income in the hands of the rich.  They will not invest, adding to demand, in any case in a deep recession, one of the fundamental observations of Keynes in contrast to the classicists, now the monetarists.  (I say all this as someone whose tax rates will certainly be going up if my own prescription is followed.)

Oh, forgot to make one other point which is that, regardless of whether he is thinking big or small, Obama needs to rack up some legislative victories before he tackles the biggest problems and he would do well to devise an incrementalist approach to the biggies, get the camel's nose in the tent and then keep going until the whole camel is in there.  Thinking big is fine, biting off more than the political system will absorb, or giving the Republicans the opportunity to do what they did to Clinton's healthcare plans, would be a BIG mistake.

What propjoe said.

The federal government -- indeed, the U.S. national economy as a whole -- faces crushing, catastrophic structural deficits in the coming decades. If we continue on our current course, we face nothing short of economic collapse and the disappearance of the middle class. I know, that sounds alarmist and radical, but then no nation before has ever survived anything like the problems we've stored up for the medium-term future with its prosperity intact.

The good news is that (most of) these structural deficits can still be fixed, or at least ameliorated to the extent that they become affordable, rather than bankrupting, problems. The bad news is that any measures to deal with any of these structural deficits will cost a lot of money up front as we finance transformations of fundamental systems. So the choice is between higher deficits now, with somewhat constrained spending in the medium term, or catastrophically constrained spending and national impoverishment in the medium term.

I'm for the option that doesn't lead inexorably to national penury. Infrastructure, green economy development, health care -- these are just a start, but all are immediate expenses that will leave us poorer as a nation later if we don't spend the money now.

But we do need to drive home the difference between Democratic deficit spending and Republican deficit spending. Republican deficit spending is like buying expensive porcelain figurines from the Home Shopping Network on your credit card, then charging your weekly groceries, then paying only the minimum due each month. Democratic deficit spending, if done along the lines Obama proposes, is like borrowing against the value in your house to buy a new truck to expand your business.

maxblum13:

I'd prefer Obama take on purcellneil as an adviser rather than Zakaria.  

In my estimation, Zakaria is a midget flake who isn't an original thinker. Like many of the neocons and assorted pundits, he was gulled by the Bush administration's manipulation of national fear that led to the invasion of Iraq. A war that has killed over 4,000 Americans, and cost nearly one trillion dollars. (Or have we passed that mark yet?) Why didn't Fareed, like the rest of the experts predict the potential for internecine violence among the Sunni, Shite and Kurd? Where was the outrage over the lack of WMD?

And spare me the other countries suspected the same bullshit. Which one of those countries invaded? (Well, the Blair ass-licker poodle followed Dubya in, but most of the Brits--our closest allies--weren't fooled.)

Zakaria is another book reader detached from the "real" world, whose original thinking amounts to regurgitating the ideas of whomever seduced him. Whether he actually analyzes ideas is questionable. Also, because he is a midget pencil pusher who has never done anything manly, he is attracted to macho ideas. Hence his support for the Bushies. (While it was cool.)

As far as I'm concerned, Zakaria is a Muslim, Indian, Bill Kristol. The psuedo-macho, pencil-pusher wussie non pareil.

I KNEW Iraq didn't have any WMD, predicted the internecine violence and don't possess a b.s. degree in international relations (how that sort of training can make one an expert, is beyond me) nor Middle East studies. Jeez, how was that? Apart from having a passing knowledge of Iraq under Saddam Hussien, all I needed to know was that Oedipus Dubya, serial draft dodger, war monger, Cheney, Bill Kristol, Doug Feith and the bulk of the neocons supported invading Iraq. And if that wasn't enough, the spin of lies (the Bushies pushing of the tenuous, tendentious connection of Saddam to 9/11) by the administration validated my suspicions, Why didn't the smart set consider the messenger?

Nonetheless, I still served in Bush's war. What did Zakaria, Kristol, Feith , Briooks, or any of the other "independent" thinking pundits risk? Nada/

Fuck Zakaria.

tec619

Thanks for your support.  If I get the job, I will take you to lunch, on Uncle Sam, of course...

Neil

My pleasure.

FOOT ON THE GAS.... Not surprisingly, Barack Obama is getting all kinds of advice about how aggressive to be after taking office. A growing number of prominent voices seem to be saying the same thing: err on the side of...