Sunday, February 11, 2018

GOP gives up all fiscal coherence - which may be what they want

I haven't had a lot of time to discuss the 6-hour shutdown and resulting spending bill coming out of DC this week. So instead, I'll forward to you an article from Stan Collender in Forbes, who went over the "Biggest Losers" from this week's budget deal.
1. Donald Trump. There was no money for his wall, a rejection of his 2018 budget cuts, Congress undercut his 2019 budget the week before it was released and there was no apparent role for Office of Management and Budget Director Mick Mulvaney or any other Trump economic official in the negotiations that led to the deal. Congress essentially told the president to butt out, and he did. Trump did nothing other than tweet his support for the deal (and in the process kneecapped the House Freedom Caucus). What else needs to be said?

2. The House Freedom Caucus. I said this in another post on Friday, but it needs to be repeated here. The House Freedom Caucus, the allegedly fiscal ultra conservatives who for years have tormented the rest of the Republican House caucus and two GOP speakers with their take-no-prisoners approach to legislating, suffered a true political beatdown from which it will be hard to recover. First, domestic spending was increased over HFC's adamant objections. Second, unlike what happened to his predecessor, Speaker Paul Ryan (R-WI) suffered no HFC-induced political problems from working with House Democrats to pass the deal. Third, two of the HFC's other biggest fiscal priorities -- repealing the Affordable Care Act and cutting mandatory spending -- not only weren't included in the deal but were essentially abandoned for the rest of this year.

3. The Committee for a Responsible Federal Budget. This probably should be broadened to include all of the anti-deficit groups that for years have been preaching the gospel of the balanced budget, but the Committee for a Responsible Budget deserves special recognition as one of the big losers in this budget deal. The CRFB, which has been railing about the federal deficit and national debt for decades, routinely claimed the mantle of anti-deficit champion and was the most visible of what Nobel award-winning economist Paul Krugman calls the "deficit scolds," wasn't just shoved aside by this deal, it was completely ignored. Even worse for CRFB, the now $1 trillion or more (and perhaps much more) deficit caused by the tax cut and this deal isn't a cyclical temporary change, it was an enacted permanent increase.
So remember all of those crocodile tears that Republicans and the allegedly "independent" Tea Party shed around 2009-10 about how Obama was passing on debt to their kids and grandkids and that was a future they couldn't endure? It was always partisan BS.

In fact, Collender says that the younger generations are the ones that will have to pick up the pieces of the wreckage that the GOP is causing with the Piece of Shit tax plan and now this budget-busting spending deal. Especially since the Boomers are going to be retired and not have to worry about losing their jobs int he 2020s.
4. Millennials. Ask yourself one question: Who's going to bear most of the burden of the trillions of dollars in new government debt caused by the tax cut and the budget deal? You get the prize if you said Gen Xers and Millennials.

The billions of dollars in additional interest costs won't be their only problem. Unless these younger generations are willing to tolerate even higher annual deficits in the future ($2 trillion is no longer unimaginable), the federal government's ability to respond to future crises and deal with the Millennials' needs will be limited.
And while I'm a person that doesn't think deficits in themselves are economy-destroying, I do recognize that it can lead to higher interest rates and devaluation of the dollar. And the annual costs from having to deal with the increased debt and higher interests logically would eat into the ability to take care of other needs.

There's also a part of the new spending deal that expands Medicare coverage to long-term coverage and supports, allowing for more individualized service plans, similar to Wisconsin's Family Care Medicaid program. But of course, the expanded benefits also likely will lead to higher costs in a program where expenses are exceeding revenues in some years.

But of course, that's likely the plan for these Koched-up jerks. Run up the massive deficit with these permanent spending increases, then whine and blame Democrats when they are back in power over the next few years. Which is why I bet the GOP won't try to mess with Social Security or Medicare between now and Election Day, no matter how much Lyin Ryan still wants to screw those people over.

It's also cute how Mr "Budget Wonk" claims that entitlement spending is the real budget problem (when virtually none of it adds to our fiscal deficit today), but the increases in military spending (which DO add to the deficit) is somehow...different.

Soooooo punchable.

Instead, some of the GOP puppetmasters would probably be OK with losses in 2018 and maybe even 2020, so that they can return to their preferred status as an obstructionist minority party in order to dupe Dems into falling for some kind of "Grand Bargain" that eradicates the New Deal. This would allow the RW oligarchs to get some of what they want, with the bonus of absolving the GOP for some of the blame for the bad consequences that follow.

Don't fall for it. Fire these reckless GOP bums, and keep them out of power for a LONG time.

1 comment:

  1. Quick add-on, tomorrow will feature the release of the US Treasury Statement for January. If we are falling behind in revenues, we may see some of it here (although likely it won't hit fill force until February, since the lower withholdings didn't happen until then).