Buying What They're Selling: Obama's SOTU spending freeze certifies more dangerous Republican myth.

[DirkGently]

After a fairly cogent reminder of the state of the deficit when he took office, and a few words in defense of the Stimulus (without mentioning that apparently dread word) President Obama said this in his State of the Union Address last night:

Starting in 2011, we are prepared to freeze government spending for three years. Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected. But all other discretionary government programs will. Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't. And if I have to enforce this discipline by veto, I will.

It was good that the President mitigated his Herbert Hoover Moment by also saying he would not allow tax cuts for the wealthy to continue, however vague that promise may sound so close on the heels of his compromise to do exactly that.

But a "spending freeze?" That's hardcore Republican-speak for shifting burdens down the economic ladder.

Moreover, they are the exact wrong thing to do in a down economy. The President knows this. He knows the belt-tightening deficit scaremongering narrative is false.

We are not a "cash-strapped family." That is a lunkheaded, deliberately deceptive Republican analogy Republicans and Tea Partiers have used successfully to change the subject in a way conservatives have done for years. After running up a ludicrous, Reagan-style, defense industry-driven deficit themselves, they now wish to pretend that the worldwide economic crisis brought on by systemic financial de-regulation was somehow the result of "too much government spending," or that Obama himself somehow caused the problem by bailing out the auto industry and with the Stimulus or healthcare reform.

Spending and deficits did not cause the current economic mess. These are Republican distractions aimed at avoiding exactly that fact. We know this, because they never raise these issues when Republicans are exploding the deficit, which they consistently do more than Democrats by a wide margin. They never connect the horrors of "maxing out the national credit card" to, for example, Ronald Reagan, who explored whole new galaxies of deficit spending, and from whose excesses we only recently recovered.

Worse, in this case what the "deficit" storyline is meant to distract us from is the fact that Republicans are, and will be, gutting the tepid financial reform enacted in the wake of the crash, setting us up for the next speculative fleecing by their big business friends.

But instead of calling Republicans out for their blame-shifting sleight of hand, last night the President gave the sham more weight and credibility.

Why? Playing along with their cover story helps no one. The whole point of changing the topic to spending and deficits was to turn the economic crash into an opportunity to attack social programs and government workers, and bypass the regulation reform that might actually prevent this from happening again.

Unless the President isn't playing along, in which case, things are much, much worse.

Is it possible the President has actually bought into the Republican storyline?

If not, why let them change the subject? Why talk about a "spending freeze?" We know what Republicans mean by that, and it's not fiscal responsibility or anything like it. So why dignify it as though it were a real policy, really intended by well-meaning leaders to achieve a real benefit?

Why recite another psalm in the Trickle Down liturgy to which Obama seems increasingly willing to say "Amen?"

Having adopted their rhetoric, how will we EVER start talking again about meaningful financial reform? The "freeze" will fix everything, now that President Obama has recognized it was "spending" that turned subprime mortgages into speculative fool's gold, apparently.

How do we make good policy out of rhetoric designed SPECIFICALLY to rationalize bad policy?

You know better, Mr. President.

We hope.

[Donnachaidh]

1. kick and Rec! n/t

[elleng]

2. ...

:thumbsdown:

[nashville_brook]

4. as a thumbs-downer, do you think it's possible Obama has bought the GOP line here?

that spending is the problem?

I'm genuinely interested in your take here, b/c the meme put forth last night is baffling, to say the least. Do we really think a spending freeze is the appropriate response to the massive financial swindles of the last decade?

[elleng]

7. It is one response among many necessary responses, to our present situation,

and we've got to recognize it. Fortunately President Obama does.

Jailing the Wall Street swindlers will do nothing to improve our economic/financial/fiscal problems, tho it should be done. They have caused a huge, global financial disaster, and we've all got to do what we can to remedy the resulting situation. imo

[nashville_brook]

9. why can't we do something about Wall Street? do you know of anything

mentioned in the SOTU, or otherwise that is being done proactively to avoid another crisis like the last one?

[elleng]

14. New rules have been implemented, and

more action awaits 'report,' I expect.

[defendandprotect]

44. We need to return to the New Deal rules and regulations -- new rules are insufficient ...

and continue to leave us open to a new Wall Street/Bankster/Corporate crime wave --

Unregulated capitalism is merely organized crime --

[dawg]

55. Not only is it not a necessary response ..

It is economically counterproductive. Spending cuts, if they are needed at all, should be made only when the economy is strong.

[Statistical]

10. Well spending (including DOD and war spending IS part of the problem).

If you look at the deficit objectively it is clear that while revenue has declined it isn't the whole problem.

Spending has also exploded. Even raising taxes across the board to Clinton levels wouldn't close the deficit.

Government spending can't grow sustainable faster than the rate of GDP. It is impossibility. GDP growth for past 10 years has averaged ~3% Govt spending growth has more than doubled that.

[elleng]

13. Yes, thanks, Stats!!!

[Statistical]

15. A chilling stat. In 2000 under Clinton federal spending was $1.8 trillion.

By 2008 under Bush it had grown to $2.8 trillion. In 2010 it is $3.2 trillion. 2011 is projected to be roughly the same.

Even if revenue had grown by rate of GDP growth (no Bush tax cuts) we would be facing massive deficits.

You can't expand expenses by almost 80% in a decade and say it is a revenue only problem.

The tax cuts were stupid and need to be rolled back. That will help close the deficit.
We need to grow the economy and thus revenue base. That will help close the deficit.
When economy eventually recovers we can cut a lot of emergency spending. That will help close the deficit.

However pretending spending isn't at least part of the problem is a joke. You can't have exponential government spending growth forever.

[elleng]

19. I appreciate your logic A LOT,

could live w/o those numbers, tho! :sarcasm:

[hfojvt]

29. that's pretty misleading

spending was down in the later Clinton years, thanks to a Republican Congress that cut spending. In 1994, spending was 21% of GDP. By 2000, it was 18.2% of GDP and by 2007 only 19.6% of GDP. Further, if you look at direct payments to individuals - that Republican demon of social spending - in 1995 it was 9.9% of GDP and in 2004 it was 9.8%. The stuff Obama is calling for a freese on does not look like it was spiraling out of control. At least, not before the economy shed 7 million jobs.

[Name removed]

40. Deleted message

Message removed by moderator. Click here to review the message board rules.

[DirkGently]

23. The discretionary domestic spending the GOP is talking about is a fraction of the budget. Moreover,

it's being put forward with the air that spending problems are the cause of the economic collapse, and as a replacement for and distractor regarding the need for financial reform to prevent the same from happening again. The whole "belt tightening" meme the Republicans are pushing is cover for pummeling government workers and social programs to free up more cash for tax cuts and military spending. And *freezing* spending in the middle of a recession is a proven recipe for disaster. It puts ideology over reality to even discuss it.

A spending freeze at this moment is a destructive storyline employed for destructive purposes. Obama may think he can beat Republicans with their own stick by forcing an honest discussion of where "spending" is really out of control, but in doing that he's supporting the notion that somehow we "spent" our way into the economic crisis, which is an extremely big lie the GOP is pushing hard to turn what should be a strong environment for smarter regulation and reform into an excuse to do just the opposite. They're suggesting gasoline as a fire retardant and Obama is saying they have a point.

[Statistical]

27. I agree.

The collapse has nothing to do with spending.

However spending (especially DOD spending) must be contained. We need to be sure that we don't cut too much, too fast which is why I think a 5 yr freeze is actually a good idea.

"And *freezing* spending in the middle of a recession is a proven recipe for disaster."
I agree however the evidence doesn't indicate we are in the middle of the recession more like on the far side. With budget as large as it is there is no real need to add MORE spending (and increase deficit beyond $1.5 trillion) at this time so Obama is essentially pushing something that likely needs to happen anyways (and getting credit for it).

[dawg]

56. It's not that simple!

How much of the rise in federal spending has to do with our out of control health care system? How much has to do with the fact that we weren't fighting two simultaneous wars under Clinton?

Also, consider the fact that safety net programs, such as unemployment and Medicaid, are currently strained to the maximum due to the economic collapse Bush left us with.

Federal spending is *not* the problem! We should be doing MORE of it right now.

In the long run, transitioning ourselves to a rational health care system and ending these wasteful wars will eliminate the excessive spending that is currently baked into our system.

Spouting nonsense about "tightening our belts" only perpetuates Republican memes. In the long run, allowing this nonsense to go unchallenged will only elect more Republicans, which will result in more wars, more wasteful defense spending, the continuation of our heartless and out of control health care system, more tax cuts for the rich, and BIGGER DEFICITS.

And the people won't even have anything to show for it.

[DirkGently]

6. Your thoughts?

[Autumn]

3. K/R What caused this current economic

mess are the Bush and Obama wars and their fucking tax breaks for the wealthiest among us. He does know better, but that isn't important to him.

[leftstreet]

5. K&R

[nashville_brook]

8. it takes me longer to digest these SOTU speeches, than most people

having slept on it, i'm kinda wondering the "state of the union" part of the SOTU speech was. it was as if he was speaking to a different country than the one i'm in right now. as if standardized testing in schools and faster internet is going to stop the economic bleeding.

was there any mention of the foreclosure crisis? of people losing their homes? or losing their jobs?

the speech wasn't aimed at the middle class. it was aimed at the investor class. there wasn't anything in there for me...and so i was entertained with The Orangeness of Boehner...b/c that's all there really was to focus on.

"meaningful financial reform" -- ? i seriously doubt that's on anyone's agenda now that Jeffery Immelt has been appointed to the "jobs creation" panel. The same Jeffrey Immelt who pioneered mortgage securitization.

as Wonkette observes...Obama Blames Dumb Children For Crisis and Not Ivy League-Educated Wall Streeters. she's on to something here.

http://wonkette.com/436217/obama-blames-dumb-children-for-crisis-and-not-ivy-league-educated-wall-streeters

[KharmaTrain]

11. He Was Playing The Room

That's what the SOTU is as its always full of generalities with few specifics. Traditionally this is supposed to kick off the legislative season with the President giving his wish list. However, considering how polarized things have become...a teabagger House and obstructionist Senate you heard a speech not about what can be or should be but of what might be...things that might get done. There's no way something like real Wall Street reform or passing Job check or even some of the more modest proposals of the past 2 years so this was a speech about the narrow range of common ground that exists.

The pisser of "meaningful" financial reform is it means different things to different people. The goal here is to have some sort of job creation and the "conventional" wisdom is this is done through the private sector. While I do favor a works program to rebuild infrastructure, that's still not enough, fast enough for an administration that is looking at 2012. Right now there's a lot of cash sitting on the sidelines that could create jobs and that's what the administration is trying to shake loose. I think its a failed idea as the more you give to these groups, they'll never be satisfied. But these are the people who write the big checks and that's gonna be needed real soon. The little guy who votes? They can wait and will.

The mess this country is is complicated...the defecit is real and this government is broke. With a legislative that won't raise taxes or cut defense and the debts grow deeper and major drag on economic recovery. So the only alternatives are to cut spending and that's what polls well and will be the hot political issue going into next year. Little will be done as the polarization is so deep and thus much of what was said last night will be long forgotten in a couple weeks time.

Cheers...

[WarhammerTwo]

36. Howzabout...

...ending the senseless war on drugs. Legalize (or at the very least decriminalize) and think of the savings. Not to mention if it was legalized, regulated and taxed, all the revenue it would generate. And making it affordable would eliminate a great deal of crime associated with drug use and maybe even make Mexico safe to visit for us gringos. I'm surprised Ron Paul and his kid and all their Libertarian brethren aren't jumping up and down suggesting this as meaningful reform as part of this debate. It actually one part of the Libertarian philosophy I wholeheartedly embrace... even though I don't use drugs. Heck, I don't even drink. But a good idea is a good idea...

[KharmaTrain]

41. The "Art Of The Possible"

I've long favored legalization and taxation but there's too much of a cottage industry that has evolved around the "war on drugs"...corporate welfare no politician will dare touch. As long as prisons remain a "profitable" business in many districts you'll see them full to overflowing.

There's so much that makes too much sense that could be done to either bring in new revenues or should be trimmed or stripped (defense and corporate welfare) but there's no way our bought and paid for politicians are gonna go near that. They only care about those who write the checks that will help them keep their job and that's who this speech was addressed to.

Cheers...

[somone]

12. Wonkette got it right

That was the coded message to the ruling class last night

[DirkGently]

34. Great link. It is the the smart & the powerful who put us in this fix, not schoolchildren.

[Lint Head]

16. Frivolous medical lawsuits are a myth.

[nashville_brook]

17. no doubt!

[DirkGently]

22. Malpractice insurance was less than 1% of health care costs, last I heard.

[Doctor_J]

57. It's actually less than one tenth of 1%

[WarhammerTwo]

39. Although...

...ya gotta admin Kucinich's olive lawsuit sounds a bit frivolous. Although that's more of a dental lawsuit rather than medical. And I love Dennis. I'd love for him to be President someday, but c'mon. $150 K for a chipped tooth? He couldn't just sue to get them to stop using the olives? The Right are gonna have a field day with this.

[Bluebear]

18. 'You know better, Mr. President. We hope.' - lol

[jwirr]

20. This is not going to help anyone and it will probably hurt the economy.

We have a recession that is over for the rich but not for the poor and it was caused at least in part because we the people are so deep in personal debt that we cannot buy even if we need something. So our not buying is no different than the government not buying. They both lead to businesses closing their doors on main street.

[DirkGently]

26. They've converted a disaster caused by banks into one caused by social programs. It's a lie.

[jwirr]

28. Absolutely but as my age I am so used to them doing that it does not

surprise me.

[Canuckistanian]

21. K&R

[cliffordu]

24. Q: ARe these the same exact freezes the traitor party wants to enact??

[BlueCheese]

25. What really gets to me...

... is all this lecturing about holding down spending almost immediately after extending all those Bush tax cuts, including those for the wealthy and the estate tax. The juxtaposition is aggravating. Not only does this favor the wealthy over everyone else, it's a bad thing to do with the economy in its current weak state.

[DirkGently]

31. That's just it. Pensioners & teachers must make up for money bankers stole?

[bvar22]

30. Summary of the 2011 SOTU

We're ALL Republicans NOW!!!!!!
:party:

[RedCloud]

32. Like Abraham Lincoln, I presume?

[DirkGently]

42. Sadly, no. As Rachel noted last night, Eisenhower would be an extreme lefty by today's standards.

[bvar22]

49. Rachael was great last night.

She confirmed what policy oriented Democrats have been pointing out for two years:

Obama FAR to the Right of Eisenhower and Nixon,
and a good bit to the RIGHT of Reagan.

[DirkGently]

51. That needs to be brought out much more. We are careening wildly to the right. That cannot end well.

[DirkGently]

35. Hearing their lingo from "our" guy does strike a bit of a Pod People note, doesn't it?

[Orsino]

33. Yep. Austerity is on the menu, folks.

It seems to be the only thing on the menu.

[midnight]

37. Thanks for brilliantly making some clarifiacations....

"spending freeze?" That's hardcore Republican-speak for shifting burdens down the economic ladder.


Thanks for setting straight this oldy but goody...."blame-shifting sleight of hand": "After running up a ludicrous, Reagan-style, defense industry-driven deficit themselves, they now wish to pretend that the worldwide economic crisis brought on by systemic financial de-regulation was somehow the result of "too much government spending," or that Obama himself somehow caused the problem by bailing out the auto industry and with the Stimulus or healthcare reform."

[DirkGently]

38. There's a lot bound up in Republican lingo, ( that we can't afford to endorse) eh?

[defendandprotect]

43. In electing Obama, we should have been moving forward --

rather, we are only moving forward on a Republican agenda -- !!!

I'm looking for real change in 2012 -- someone like Bernie Sanders to run

on the Dem ticket!

Most of all we need a humanist in the White House -- and Wall Street shown the door!!

[DirkGently]

45. This is the concern. That a Dem leader would just try to blunt the knives Republicans have for us.

[defendandprotect]

48. Obama had a huge mandate -- no reason why we should have been going backwards ....!!

[Jakes Progress]

46. Of course, it was Morning Schmoe talking

but this morning he was saying how bush 2 was going up in respect now that Obama was continuing all of his policies.

That's pretty much what republicans I know say. It goes along the line of "How can you say that the war and stuff was so bad if Obama just carries out the same thing?" A couple have told me that they fully expected bush and cheney to have to go to trial for their crimes. They fully expected them to be charged and convicted. Now they figure how bad could it have been.

[defendandprotect]

47. +1 --

[DirkGently]

50. "All that is necessary for the triumph of evil . . . " etc. Chilling.

[Myrina]

52. Too late to rec but here's a kick

:kick:

[Jakes Progress]

53. Kick again. We are becoming the enemy.

[soryang]

54. Obama also bought the neoliberal corporate tax nonsense

...hook, line, and sinker. American corporate taxes are not too high. Going to lower corporate taxes will reduce employment not increase it, it will also reduce capital spending. If corporate taxes do not bite there is no incentive to invest in capital or employees. If taxes are low you don't need to.


This is a major structural reason why American manufacturing and industry suffer while financial speculation, market manipulation, hoarding, and crony capitalism on government revenues skyrockets at their expense. You don't need to make real capital investments to make a profit in this country because you can just speculate and lobby congress for profits. Taxes are so nonexistent on the finance, insurance, and real estate sector that they grew like a cancer choking everything else out.

On the other hand, I don't believe that the corner family restaurant should pay the same taxes as a national chain like Denny's or MacDonalds. Therefore, if corporate tax changes are needed, the reductions and incentives should be increased for small corporations less than a certain capitalization and increased on the corporate giants.

[dawg]

58. He thinks he's being clever ... giving lip service to austerity while...

the actual dollar amounts of the proposed "freezes" are minuscule. What really pisses me off, is the fact that he is willing to give lip service to a such wrongheaded policy in the first place. Giving bipartisan credence to this false notion could do real damage to this country down the road. Certainly, it is disastrous to the party.

Back in the day, it wasn't called "austerity". It was called "Hooverism".