Budget

It’s All about the Primaries

AP Photo/Rainier Ehrhardt

He’s already given political culture one of the great euphemisms ever for having an affair. And now the Appalachian trail walker, Mark Sanford, has become a terrific example of one of the core ideas of political parties and democracy: It’s all about the primaries.

Sanford won back his old House seat in a special election on Tuesday. Smart liberal commentators noted that Republicans had little choice. Paul Krugman:

You've Got Sales Tax

flickr/Chris_Hancock

In 1984, CompuServe launched the first “Electronic Mall,” a Pleistocene-era Amazon with which owners of a TRS-80 personal computer could browse and buy goods over the Internet. Such modern retailers as “The Record Emporium” and “The Book Bazaar” were given prominent virtual storefronts. A full page ad in the May 1984 issue of Online Today boasted, “By the year 2000, the world may catch up with the way CompuServe’s new Electronic Mall lets you shop today.” The world took less time to catch up than that: By 1995, eBay and Amazon had been incorporated; in Amazon’s first two months as an online bookstore, it averaged $20,000 per week in sales. Americans would go on to spend around $700 million online in 1996, and by 1999 sales had grown to $20 billion. Figures released earlier this year by the Commerce Department revealed that Americans spent $225 billion online in 2012—a 400 percent increase in only a decade.

Bad Flight Plan

Flickr/vmarta, Kent Wein

The decision by Senate Democrats last week to restore funding to the Federal Aviation Administration (FAA)—which was cut when the “sequester” took effect in March and led to flight delays that angered a wide swath of Americans—was a clear loss for Democrats in the ongoing budget wars. Rather than cave and reverse the cuts, Democrats should have used the public discontent about budget cuts as leverage to pressure Republicans. They squandered this opportunity.

A Crossroads for Hillary

Titanic Belfast / Flickr

Hillary Clinton is making all the early moves of someone preparing to run for president, though she has given herself plenty of time to rest, rejuvenate, and review a final decision. How, however, President Obama’s ill-conceived plan to cut Social Security benefits via a “technical” change in the inflation index will force Clinton to make an awkward choice.

Most Democrats in both houses of Congress are not happy with this backdoor cut in Social Security. It is both fiscally unnecessary and spectacularly bad politics. Republican leaders are already bashing Obama for selling out retirees. After Obama released his budget, Republican Congressional Committee Chairman Greg Walden of Oregon went on CNN to accuse the president of “a shocking attack on seniors. Resolutely defeneding Social Security in the face of periodic Republican forays at cutting or privatizing America’s most popular program has always been one of the Democrats’ great appeals. Obama gave that away.

Reinhart and Rogoff's Theory of Government Debt is Dead

NBER

Carmen Reinhart and Kenneth Rogoff wrote a wildly influential book four years ago called This Time Is Different.* The thesis of the book is that when a government has a debt-to-GDP ratio above 90 percent, it is terrible for economic growth. The authors also followed up with a couple of papers arguing the same thing. Pro-austerity forces here and elsewhere in the world have seized upon the book to push their favored policies.

What Does "Balance the Budget" Even Mean?

Flickr/ferntech

This is a story about the deficit scolds who substitute attitude for argument and how they use the public’s ignorance about the federal budget to their advantage.

It comes from sparring over the House Republican budget, which Republicans claim will achieve a balanced budget within ten years, and Barack Obama’s budget, which he will be submitting to Congress this week. Neither gets us to a zero deficit. The White House spin has been that balancing the budget isn’t an important goal by itself—deficits, surpluses, or balance are only means to the end of a growing economy or creating jobs. In line with that thinking, last week White House spokesman Dan Pfeiffer said, “You don’t want to balance the budget for the purposes of just balancing the budget.” 

Jack Lew: Obama’s Austerity Ambassador

AP Images

There is something seriously off about the mission of the new Treasury secretary, Jack Lew, to Europe. Secretary Lew has been visiting European capitals to persuade leaders there to ease up on the austerity. He has not had a good reception.

Speaking at a joint press conference with the chagrined Lew in Berlin, Wolfgang Schauble, the German finance minister and uber-austerity enforcer, dressed down Lew thusly: “Nobody in Europe sees this contradiction between fiscal consolidation and growth.”

Nobody among the elite, that is. 

Ordinary people in Greece, where output has declined by nearly 25 percent since the austerity tonic began, surely see the contradiction. So do young people in Spain, where the youth unemployment rate has reached 56 percent. 

Where's the Change?

AP Photo/Lauren Victoria Burke

AP Photo/Alex Brandon, File

Destroying the Economy and the Democrats

AP Photo/Susan Walsh

Job creation slowed to just 88,000 in March, signaling a sluggish economy. And President Obama, with unerring timing, picked this moment to put out an authorized leak that he is willing to put Social Security and Medicare on the block as part of a grand budget bargain that will only slow the economy further. The deterioration in economic performance was all too predictable, given the combined lead weights of the March 1 $85 billion of budget cuts in the sequester and the January deal to raise payroll taxes by about $120 billion. (The tax hike on working people was almost double the much-hyped tax increase on the top one percent, which totaled a little over $60 billion.)

Why Politicians Aren't Sensitive to Public Opinion on the Economy

Flickr/Alex E. Proimos

Who says American politics is gridlocked? A tidal wave of politicians from both sides of the aisle who just a few years ago opposed same-sex marriage are now coming around to support it. Even if the Supreme Court were decide to do nothing about California’s Proposition 8 or DOMA, it would seem only matter of time before both were repealed. A significant number of elected officials who had been against allowing undocumented immigrants to become American citizens is now talking about “charting a path” for them; a bipartisan group of senators is expected to present a draft bill April 8. Even a few who were staunch gun advocates are now sounding more reasonable about background checks.

Take That, Political Science!

AP Photo/Lawrence Jackson

This week, ten years after swearing to destroy Saddam Hussein and build democracy in Iraq, the United States took a step toward dismantling its investment in studying how democracy works. For more than 15 years, congressional Republicans have been trying to do away with federal funding for political-science research. Every time until now, political scientists successfully fought back. One reason they could: The pot designated for political science in the National Science Foundation was a tiny percentage of overall research money—about $10 million out of a $7 billion budget. That's less than two-tenths of a percent. But it's also the majority of total grant funding for political-science research. The field provides us with much of what we know about how democracies, including our own, function (and don't function). Political scientists study how and why opinions change on key issues, what motivates people to vote, and how public opinion influences elected officials. For a relatively small sum, the nation that loves to tout its democratic ideals has been funding projects to investigate how that democracy works (and doesn't).

The Contest Over the Real Economic Problem

flickr/Starley Shelton

“Our biggest problems over the next ten years are not deficits,” the president told House Republicans Wednesday, according to those who attended the meeting. The president needs to deliver the same message to the public, loudly and clearly. The biggest problems we face are unemployment, stagnant wages, slow growth, and widening inequality—not deficits. The major goal must be to get jobs and wages back, not balance the budget. Paul Ryan’s budget plan—essentially, the House Republican plan—is designed to lure the White House and Democrats, and the American public, into a debate over how to balance the federal budget in ten years, not over whether it’s worth doing.

The Smart Strategy Behind Paul Ryan's Stupid Budget

Flickr/Donkey Hotey

For an ambitious politician, a spot on your party's presidential ticket is fraught with danger. On one hand, you immediately become a national figure, and if you win, you're vice president and you've got a good chance to become president. On the other hand, if you lose, you may wind up the target of contempt from forces within your own party and quickly fade away. Look at the list of recent VP losers: Sarah Palin, John Edwards, Joe Lieberman, Jack Kemp. None of them had any political future after their loss.

And then there's Paul Ryan. You have to give him credit for one thing. Unlike, say, Palin, he didn't let his time on the national stage give him delusions of grandeur. Instead of proclaiming himself the leader of a movement, he went right back to what he was doing before: using the budgeting process to push an extraordinarily radical agenda, all couched in enough numbers and figures to convince naive reporters that he's a Very Serious Fellow, despite the fact that his numbers and figures are about as serious as an episode of The Benny Hill Show. But this act is what got him where he is, and he seems to have concluded, probably wisely, that his best move is to get back on that same track, which might eventually lead him to the White House.

When Public Is Better

Flickr/Mirsasha

Long before we thought of founding The American Prospect in 1989, I came to know Paul Starr through a prescient article titled “Passive Intervention.” The piece was published in 1979, in a now-defunct journal, Working Papers for a New Society.

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