Every time the Democrats are winning, you will inevitably hear dire warnings about the dreaded “deficit” coming from reactionary circles. They will claim that the economy is about to implode and lead to hyperinflation and anarchy. Then when the Republicans take the lead, the deficit explodes, but all you hear is crickets. The Republicans’ habit of exploding the deficit is not my opinion but is factual and independently verifiable. The Democrats are by comparison somewhat responsible with the reigns of the economy. I sometimes muse that if the Republicans actually cared about what they pretend to care about, they would view the Democrats in a much more favorable light.
As you can see, President Clinton reversed the deficit of Bush Sr. and Reagan and ran a budget surplus. Obama inherited an unprecedented deficit in 2009 due to the Great Recession (which happened under Bush’s watch), but, during the course of his presidency, he managed to cut it by two thirds. Trump, however, has completely reversed the trend, nearly doubling the deficit in three years. So, if the world made sense, you would expect the deficit alarmists to be sounding the alarm under Trump, but of course what we get is the exact opposite. You have Republicans saying that, “if we elect another Democrat, we’re going to have hyperinflation and the economy is going it implode.” Anyone who thinks that is completely dislodged from reality. I’m as independent as they come, so I would have no reason to puff up the Democrats, who I constantly call out for their systemic corruption. But, if you were seriously worried about the deficit and inflation, you wouldn’t be a Republican.
This is an interesting social phenomenon. I often wonder what the underlying issue is here. Obviously the right-wingers don’t actually care about the deficit. The contradiction and hypocrisy cannot be denied, so it needs to be examined. Is it just tribalism, a case of the red-state denizens being too loyal to criticize the home team? Or are their occasional cries for deficit reduction concealing a more sinister motive, such as slashing all entitlements.
If it is all merely tribalism, we are surrounded by children. God help us.
This would also be a major indictment of the US education system, as anti-intellectualism and feelings-based reasoning does not exist to such an extent in other western countries.
It also could be that Republican politicians in Washington knowing push the “Republicans will balance the budget” bullshit, and regular Republican voters are too ignorant to see that they’re being played. Most Republicans tend to be older and still habitually rely on TV as their main source of news, so, in the information age, they are incapable of making an informed decision on anything.
If it is all about cutting entitlements, let’s take a moment of silence to appreciate the awe-inspiring levels of hypocrisy of the “small government,” anti-taxes crowd cheering on the government as they rob them blind by taking away their social security benefits that they’ve been paying into ever since they had their first job. Because this is what Trump is doing even as he came out and lied to all of our faces in the State of the Union last week by saying he would “protect social security.”
Reactionaries will also think that the poor black and brown people don’t deserve entitlements. I don’t know if they realize that the government can’t just take away benefits from minorities; THEIR benefits would be taken as well. People who think this way are the same people who think that giving the American people’s money back to the American people in the form of universal healthcare is somehow “big government,” but spending their money to bomb brown people on the other side of the world (which doesn’t benefit the people in any way) is somehow not “big government.”
Right-wing ideologies are often contradicting in more ways that one. For example, it is often the deficit alarmists who don’t have a problem with America’s astronomical military budget. Do you want a balanced budget, or do you want endless war? Pick one. You can’t have both.
Another reason for Americans not knowing what to think about the debt and deficit is that most of them have no idea what the debt and deficit are. They probably think of it as analogous to credit card debt. Economics is not a strong subject for me, but I make a point of understanding hotly debated issues. I’ll explain it as best I can. The “national deficit” is the total of yearly government spending minus government revenue. While the “national debt” is the accumulation of all national deficits over US history.
One talking point I commonly hear from people is that the debt is due to the US borrowing money from China. This is not exactly true. It is a conflation of two barely related issues: one of course being the dept, and the other being the fact that China buys US treasury bonds to stabilize its own currency. The treasury bonds market, as it concerns China, is a mutually beneficial arrangement. It helps to solve the deficit crisis, and it spreads out the reach of the dollar, which has a stabilizing effect. It also links the yuan to the dollar, which stabilizes the yuan. As much as it’s mutually beneficial, it could also be mutually detrimental. If China were to demand an immediate refund, this would cause inflation and probably an economic downturn. And, in our increasingly interconnected world, a weak US economy is a weak global economy. China is not known for shooting itself in the foot.
But the government does have to pay interest to foreign and domestic investors. To do this, it usually has to get money from the federal reserve, which devalues the dollar. The government could easily fill the gap by printing more money, but that would only lead to inflation. Printing too much money is not advised, but governments around the world are known to do it anyways. Such is the nature of fiat currency.
There are many countries, such as Japan and Italy, who have much more debt than the US does, and they’re still floating along, even without the added bonus of their currencies being the global reserve currency. So, as far as the deficit goes, I think America is safe for the foreseeable future. There may be another economic downturn in the near future, but I don’t think it will be caused by the national deficit, more than likely it will be the student loan crisis or the housing bubble again.
The deficit is mostly just another wedge issue used to divide us. The most interesting thing about it for me is how the narrative managers spin it. It’s always useful to exploit people’s basic emotions like fear. Emotions are feelings, and they don’t mix well with critical thinking. People understand the personal concept of “debt,” and it reaches deep down to the fear people have of not being able to provide for their families. The national debt is a bit more complex than personal debt, but don’t expect that to be articulated in the mainstream media.