A few terrific debt/deficit editorials /op ed’s from the New York Times yesterday, one of which features this chart. This story from Teresa Tritch is “How the Deficit Got So Big”. Folks who voted for Obama and have been feeling some pain lately, might find some comfort here. Good, short read and she concludes:
A few lessons can be drawn from the numbers. First, the Bush tax cuts have had a huge damaging effect. If all of them expired as scheduled at the end of 2012, future deficits would be cut by about half, to sustainable levels. Second, a healthy budget requires a healthy economy; recessions wreak havoc by reducing tax revenue. Government has to spur demand and create jobs in a deep downturn, even though doing so worsens the deficit in the short run. Third, spending cuts alone will not close the gap. The chronic revenue shortfalls from serial tax cuts are simply too deep to fill with spending cuts alone. Taxes have to go up.
Then there’s this by Eric Posner and Adrian Vernuele suggesting a Presidential action to resolve the debt ceiling argument unilaterally based on, not the 14th Amendment, but on:
. . . the necessities of state, and on the president’s role as the ultimate guardian of the constitutional order, charged with taking care that the laws be faithfully executed.
When Abraham Lincoln suspended habeas corpus during the Civil War, he said that it was necessary to violate one law, lest all the laws but one fall into ruin. So too here: the president may need to violate the debt ceiling to prevent a catastrophe — whether a default on the debt or an enormous reduction in federal spending, which would throw the country back into recession.
A deadlocked Congress has become incapable of acting consistently; it commits to entitlements it will not reduce, appropriates funds it does not have, borrows money it cannot repay and then imposes a debt ceiling it will not raise. One of those things must give; in reality, that means that the conflicting laws will have to be reconciled by the only actor who combines the power to act with a willingness to shoulder responsibility — the president.
You can have wealth concentrated in the hands of a few, or democracy. But you cannot have both.
Whatever Works 
I have mixed feeling on this. The president must exhaust every option to make a compromise. A unilateral violation of the law this early in the game would likely cause more problems than it would solve and potentially call into question the President’s legitimacy. At the eleventh hour, say the day before a potential default, this becomes a more viable option.
With Lincoln, part of the country was in open rebellion. Violating the constitutional order before the absolute last minute could push this country toward much greater unpleasantness. Imagine if millions of tax payers suddenly refused to pay their taxes in response. The country simply would not have the resources to enforce the law, and any attempt to do so would appear increasingly heavy handed.
Plus, if Obama were to take this option, his election prospects would be doomed (unless, perhaps, he does it on August 1). The optics (and timing) are everything here.
That said, Congressional Republicans should have taken the 83/17 deal. It was a good one
Of course, I am also worried about the slippery slope argument. This President has already arguably violated the law by not getting Congressional approval for his Libyan misadventure. The trend does not give me much comfort.
LikeLike
I agree that it would be hugely controversial and would enrage and empower a segment of the electorate – but the overall reaction of the American people would depend entirely on how Obama delivered the message, or, as you said, the ‘optics’.
I remember how Perot came out of nowhere (politically) in ’92 and sat on all the late night tv shows with his ‘charts’ showing where we were re debt/deficit. He was fighting NAFTA, talking about the ‘great sucking sound’ we’ll hear from Mexico when our jobs leave the US. He was right of course.
He got 20% of the vote that year and I am sure it was because he didn’t fiddle around and chit chat – he just laid it out straight, just the way he saw it and he didn’t talk down. He stuck with the numbers.
A lesson our pols should learn. But won’t.!
LikeLike
I’m with you Moe. I think he does this via a hour long slot of time on TV with charts damnit like this one to SHOW people how we got there, and how we get out. A sidebar of running economists worldwide who agree that revenue is really the problem here, brought to us by the bush tax cuts. Those heinous things must end. This is the place of greatness and the hour grows short. Damn the GOP to the hell it has created.
LikeLike
Exactly how it should be done Sherry! Exactly.
LikeLike
Moe,
I noticed that the chart on the right doesn’t include the Libyan War, so I wonder if it is missing anything else. I also doubt it is included in defense, since it is discretionary.
LikeLike
Also, it does not seem to include the net cost of TARP as the government actually made a profit on nearly every transaction except for AIG.
I am actually fairly shocked the New York Times would publish this without some fact-checking. This chart omits some key figures to make Obama’s record look less egregious. It also ignores the fact that Bush 8 years to run up his debt, while Obama did it in under 2.5 years.
LikeLike
Sean – The NY TImes does it’s homework and fact checks more than 99% of the media. So I doubt there’s any carelessness or spin here. Re 8 years vs 2.5 years, that’s not what the chart is showing. It’s an 8 year projection for Obama based on anticipated outcomes of policies he’s put in place.
Can the costs of Libya be all that much? Enough to be counted in this type of chart? You’re the military guy – what could it be costing?
LikeLike
Yo Sean …..The GOPer’s try to screw Obama into the ground buy delibertly NOT doing a damn thing since they pulled a majority in the House isn’t an ‘open rebellion’???…..check this out from my blog……http://www.politicaldog101.com/?p=32959
LikeLike
Sean this IS hardball politics man…..Cantor and Co. want the current President gone…..Period….
If the gotta drag the whole thing down for 300 million what do they give a shit?
Better yet….Have Obama make cuts so HIS base can vote him out for them…..
If I was Obama I’d close the sucker down….
Then go on TV everyday and explain who the enemy is…..
LikeLike
Pingback: What the f*ck, just do it Barry….Whateverworks…. - Politicaldog101.Com
I understand that it is an 8-year projection. The problem with this analysis is that it does not bake in future policies, which President Obama is sure to institute during each budget cycle. This of course, is impossible to do, but the NYT did not let it stop this person from publishing this editorial.
The problem with these projections is that they are subjective. For instance, they don’t include policy changes like the Afghan surge, the Iraq withdrawal, the GM bailout, or the Libyan War. As of March 30th or so, the Libyan War cost $550 million. Not much, but extend this commitment for another 5-6 years and it adds up (another subjective judgement call, obviously). The GM bailout looks to be roughly $80 billion, yet that is not reflected in the numbers (I suspect the author lumped it in under Bush, since the TARP ended up costing tax payers $25 billion net. Her figure is almost 10x higher — I suspect it is in “other charges”, whatever that means). For the Afghan surge, I have seen estimates that it would cost up to $40 billion a year. Yet the author makes zero attempt to include these costs in her estimate.
If someone has an agenda, they can pick whatever figures they want to include to get the result they want to see. The fact is that the NYT is presenting a very subjective analysis as objective fact. I find this to be extremely irresponsible.
LikeLike
Jamesb,
By definition, an open rebellion is when people literally start killing each other. We’re not there yet, and I hope we never get there.
LikeLike
Me neither…But the GOPer’s are taking no prisoners right now…..
There WILL be a deal….
But this in the end IS politics….
LikeLike
And you’re right the NY Times isn’t above cooking the books anymore than Fox News….
LikeLike
Totally agree, though Fox probably does more than most.
LikeLike
They all do…..
Running a blog you begin to see thru some of this stuff….
My linked piece tries to go beyond the horserace theatre of the DebtCeiling/Budget balancing carrying on…..
The public right now are specators in a fight for the 2012 Presidential Election no doubt….
The Economy is the side show….
LikeLike
You’re probably right, which is why I think there will be an agreement at the eleventh hour…literally. 😉
LikeLike
The hard line GOPer’s are borderline treasonous.
As well as Faux Newz.
LikeLike
Pingback: The Palinator Syndrome Strikes Again « A Feather Adrift