Since President Obama took office on January 20, 2009 and conservatives suddenly remembered that deficits do “matter,” the Republicans in Congress have been offering a simple formula for healing our battered economy: cuts.
At first they said that if we didn’t make huge cuts, we’d have rampant inflation. Inflation has generally been lower than normal since 2009. Then they said people would stop buying America’s debt, which is as popular ever. Meanwhile corporate profits have climbed to an all-time high and wages as a share of GDP are at an all-time low.
The GOP, of course, did win some cuts.
On the state and local level, the cuts to public workers, especially teachers, have been particularly savage, with more than 680,000 put out of work. And in 2011, when the House GOP took the unprecedented step of threatening to default on America’s debt without cuts, they won cuts on a federal level with the promise that more cuts would either come from a deal worked out by the so-called “Super Committee” or from a sequestration designed to be so harmful to the military that no one would ever let them happen. This was the ransom they extracted for their hostage — a plan the president came up with to avert another financial crisis that would have been nearly as bad as the one he inherited on January 20, 2009. President Obama proposed it and a vast majority of Republicans in Congress voted for it.
Of course, the “Super Committee” failed. In 2012 (if you believe the liberal media), President Obama was re-elected by a margin of nearly five million votes on the premise that deficit reduction must include sacrifices from the rich, who are paying taxes as low as they’ve been in half a century, while sucking up most of the benefits of the recovery.
This lead us to the so-called fiscal cliff, when all of the Bush tax breaks expired. The president compromised and kept the cuts on all income up to $400,000. And for the first time, taxes were part of an attempt to shrink the deficit Obama inherited. But the GOP was furious because they didn’t get enough — guess! — cuts.
To make up for this slight, Republicans are now vowing to let the sequestration go through. But since they know it’s a terrible policy, they’ve decided to blame it on the president. They even started using the Twitter hashtag #Obamaquester to make that point.
This begs the question: If Republicans really think that severe cuts are good for the economy, why would they be giving Obama credit for them?
Because everyone — including even Mitt Romney — knows that cuts hurt the economy. And the sequestration’s cuts will be particularly “brutal,” according to the president. Here’s why the GOP wants the sequester to happen, but doesn’t want any credit for it.
Photo credit: Republican Conference via Flickr.com
750,000 Or More Americans Out Of Work
If the entire scope of the sequestration goes into effect, up to 750,000 Americans will be out of work. The economy has been adding between 100,000-200,000 jobs a month over the last few months. That growth will stop and for the first time since the stimulus was fully deployed, America could be shedding jobs again. The GOP may be hoping that voters will blame the downturn on Democrats, as they did in 2010. But with about 40 months of job growth suddenly reversed, the cause of the downturn would be pretty clear.
Defense Cuts, Defense Cuts, Defense Cuts
Half of all the cuts in the sequestration will hit the military, about $500 trillion over 10 years. While our defense budget is bloated from war, these cuts will be arbitrary and lacking in any strategy other than being designed to make Republican hawks never want it to happen. And they don’t.
Correx: McCain/Graham statement, just in: Sequester would be “calamitous” to “nation’s economy and security.”
— Greg Sargent (@ThePlumLineGS) February 19, 2013
Imagine that the sequestration goes into place and some attack or conflict occurs. Are Republicans confident that they will still be able to blame the president as the people rally around him, as they usually do when the nation is threatened?
There Goes The ‘Secure The Border First’ Talking Point
Republicans like to justify their hostility to comprehensive immigration reform by saying the border is a war zone, which was somewhat true during the Bush administration. The border is actually now more secure than it’s been in years, or possibly decades. Perhaps the GOP’s secret plot is to make it less secure to justify their bluster. But it will be easy to question the sincerity of this talking point if they’re letting the equivalent of 5,000 border patrol agents be cut. That’s what the sequestration would do.
Wall Street’s Bulls Will Gore
Despite our lingering jobs crisis, Wall Street is testing new highs only five years after the worst of the financial crisis. After the stock market crash of 1929, the Dow didn’t return to pre-Great Depression highs until the 1950s. The financial class has recovered completely and happy days are here again. But analysts are already warning that the self-inflicted wound of the sequester will slow growth. And New York-based donors, who are already more than miffed with the GOP after it blocked aid for Hurricane Sandy, will not be pleased if this hurts their bonuses.
Photo credit: StockCharts.com
Guess Who Is Up For Election Next Year?
It’s not the president. The president’s approval rating has sunk back to about his winning share of the 2012 election: 51 percent. The House GOP’s approval rating has been around 24 percent, or half of Obama’s. And their disapproval rating? About 64 percent. If they want to gamble that voters won’t take the opportunity to punish them for sudden job losses, all they have to do is nothing.
Image Credit: DonkeyHotey via Flickr.com