Posted by: Jeff | December 13, 2010

Cognitive Dissonance About Deficits

Conservatives have really cornered the market on reporting about fiscal discipline.  In journalistic circles, it’s almost taken as a given that Republicans care more about budget neutrality than Democrats.  Yet this seems completely out of whack with reality.  Annual deficits increased under Reagan.  They increased under Bush I.  And they increased under Bush II.  You can make the argument that budgets are approved through Congress, but the Administration sets the agenda.  And under Bill Clinton, deficits decreased.

Thus far, the Obama Administration has provided a skewed sample.  An inherited economic crisis and the TARP bailout immediately inflated the deficit, and the size of the stimulus featured prominently in news headlines.  But even under Obama, the long-term fiscal impact of TARP is proving to be neutral and the progressive debate about health care reform prominently featured deficit neutrality as a priority.

What have Republican policy priorities included in that time?  Well, tax breaks.  And smaller government, though details about how that is accomplished have been scattered.  The fact remains that Republicans have put forth proposals to make decreased taxes permanent while leaving spending more or less constant.  That’s not deficit neutrality or balancing the budget – that’s simply deficit spending through revenue reduction.

Josh Marshall is right to point out that much of the commentary on budgeting, deficits, and tax cuts have really made bugaboos out of progressives despite the facts:

Republicans do not care about deficits. They care about tax cuts. Arguably — and you have to be generous on this front — they care about the size of government. But not deficits. The only pressure for budget balancing comes from the middle of the Democratic party.

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