Saturday :: Feb 28, 2009

About That Deficit


by paradox

I’ve been amused over the last 48 hours as the initial reports for the Obama 2010 budget came in proclaiming liberal nirvana, a dream come true, why, I give you these taxes on the rich, this health care, this energy policy and most of all the coming holy peace as irrefutable demonstration that the Progressive One--let us all humbly proclaim with muted awe--has arrived, he lives among us, we be saved.

Well, no. The first Obama budget is a mixed bag reflecting the pragmatic reality of a dedicated public servant who isn’t a freaktoid Sarah Palin clone intent on lying and looting, so a tax shift with a looming Depression was as necessary as it was easily politically feasible. There are still two major problems in the budget that keep anything like life for liberals from being heaven on earth, oh yes.

As Glenzilla and Hamsher have repeatedly pointed out, the third rail of American budgetary politics isn’t Social Security, it’s Defense, and while again it was politically easily feasible for Obama to end a disastrous war and give up an estimated $40 billion in “permanent” bases in Iraq he did not dare take on the annual DOD budget, which got a fat 4% increase.

Acceptance of a 19 month timetable only occurs with the faith the truth is being told and the numbers totally adhered to. Perfection is a standard for fools, progress for goals of truth and reality enough for the little people. It is very nice to live in an America where one is sure the President would never abuse the faith given to him here with Iraq, but the war in Afghanistan rages on with no end in sight. I know with every atom of my existence until America is at peace with the DOD budget reduced at least 40% we have lost our way, never to be the country we could and should be.

As Keynes and Billmon noted, ending a war to plow the cash into deficit reduction with a looming Depression invokes an implacable sentence: you’re doing it wrong. I felt remiss for bemoaning taxation for war in times of screaming debt the week before, merely cementing in more effort for Obama to hurl the money up a vastly strong counter-intuitive current of mandated economic behavior: if you’re in debt and everyone is pulling back, spend more.

Am I being unfair to President Obama in expecting him to hack at the third rail and switch $150 of DOD money to the little people on a dime? Certainly. These are vastly entrenched political interests that in theory would take an enormous investment in political capital and fighting capability to take on the Democratic Party simply doesn’t possess at the moment.

Frank Rich was very wise last week, observing the vast wreckage and seemingly intractable problems Obama inherited: pity our President. No Executive should ever have to inherit 25% of what Obama has to solve, yet the urgency to fix at least half of it intensifies by the hour. I hope the administration knows how grateful I am generally for the budget in taking on what is politically feasible at the moment, for Michelle Obama, and for many initial small sane decisions of respect for our people.

Fear is not emotion that is familiar to me—at least I suspect as most humans experience it—but an alarm I have never felt before is beginning to take hold of me as I look at what faces our people in our coming economic nightmare. Herbert called it “hideous,” Reich a “Mini Depression,” but as Mary noted, far, far too many indicators—bad drought just yet another—of what we have seen before is about to be upon us.

Roubini and Krugman, doomsayers, cannot predict the future, nor tiny I, but know this: out of nowhere an overwhelming compulsion to serve my local food bank has overtaken me this year, leading to a huge investment in resources and work that only means completion of phase 1 for now. It is an profoundly irrational act in many facets, but as I breathe I must do it, I know not why.

Ending war is indeed a holy thing, but I suspect in 19 months the wisdom of Keynes and Billmon will be horrifyingly clear to Obama indeed, after watching what our people are going through $150 billion will be spent as soon as it can, anything and everything must be done to get us out of this hellish Depression by everyone who is able.

paradox :: 7:03 AM :: Comments (10) :: Digg It!