Mitch McConnell probably thought he was being very clever, waiting almost a full year after the passage of the Republican tax scam to blame the resultant budget hole on an 83-year-old program. Yes, the public has a short memory, but if the GOP succeeds in stripping them of their Social Security and/or Medicare benefits, one can only assume they’ll remember that.
But the notion that the current ballooning deficit was a totally unavoidable force majeure is soundly refuted by (very recent) history.
First of all, any idiot knows you don’t introduce a huge fiscal stimulus (like, say, an upper-class tax cut) while the economy is already near full employment and the Fed is preparing to raise interest rates to slow it down. That is, unless your true purpose is to give away gobs of money to the already grotesquely wealthy.
Secondly, fuck you, Mitch McConnell. Your little gambit was obvious from the beginning, and the fact that you have the gall to toss out these trial balloons so soon after putting a rapist on the Supreme Court just goes to show that you’re even uglier on the inside than the outside — which I would have assumed is metaphysically impossible.
The fact that we have a large and growing deficit while the economy is surging is actually extremely unusual, historically speaking.
As Washington Post columnist Catherine Rampell notes, the Treasury should be taking in money hand over fist:
Earlier this week, the Treasury Department reported that our federal budget deficit ballooned in fiscal year 2018. It got a lot of coverage for two reasons. The first is that Republicans, who control all branches of government, claim to be fiscal hawks, and yet they’re overseeing a massive widening of the deficit.
The second is that this is … not what you normally expect to happen in a recovery.
When the economy grows, people earn more money, which normally causes tax revenue to rise; simultaneously, government spending on programs such as food stamps or unemployment insurance normally falls. Both factors should cause deficits to decline or even disappear, absent other major policy changes. Which is to say: When unemployment shrinks, the deficit usually shrinks, too.
In fact, the last time unemployment was hovering around 4 percent, we had a budget surplus!
Rampell has put together a chart to help point out exactly how bizarre our current circumstances are:
The chart clearly shows that low deficits and low unemployment ordinarily go hand-in-hand. (They didn’t during the Vietnam War, which was an expensive undertaking that siphoned workers away from the homeland.) Now, however, we’re seeing rapidly rising deficits during a period of very low unemployment. And that’s just weird.
To be sure, entitlements likely are on an unsustainable growth path. But long-run entitlement spending is not the reason why the federal deficit rose 17 percent last year. The tax cut and subsequent spending hikes are. Both sets of policies will add an estimated additional $2.7 trillion to deficits over the coming decade, according to the Congressional Budget Office.
Needless to say, these policies were not only bad on their own merits but also supremely ill-timed. We absolutely didn’t need a major fiscal stimulus nine years into one of the longest recoveries on record. As the saying goes, better to repair the roof when the sun is shining.
The question is: If the deficit looks this bad now, when the economy is good, what happens when (not if) the economy takes a turn? Tax revenue will plummet, deficits will rise further, and more spending will be needed. But by that point, we may not have any fiscal bullets left.
Of course, there are a lot of things the government can do to preserve the long-term viability of Social Security without cutting benefits. The easiest approach would be to raise or eliminate the Social Security earnings cap.
Unfortunately, that won’t happen while our government is being run (into the ground) by Republicans.
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And don’t forget about Dear F*cking Lunatic: 101 Obscenely Rude Letters to Donald Trump, which you can purchase here.