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Home Publications Blogs Beat the Press People Are Losing Their Homes and Their Jobs, But They Are Really Mad About the Deficit

People Are Losing Their Homes and Their Jobs, But They Are Really Mad About the Deficit

Tuesday, 13 April 2010 06:00

That's effectively what the Washington Post told readers in another front page editorial highlighting the need for deficit reduction. The article said:

"But by suggesting the deficit may have peaked, administration officials are taking a political gamble. If the favorable number does not hold up in coming months and the budget shortfall surpasses the $1.4 trillion recorded last year, voters in the November midterm elections could punish the Democrats for offering false hope."

That's a great story. Is it plausible that even 1 percent of voters are going to have any clue as to whether this year's deficit is marginally higher or marginally lower than last year's deficit? Is there any reason that anyone should care? Is there any evidence that this will influence their vote in an environment where they are concerned about their jobs and their homes?

In the Post's dreams maybe, but not on this planet.

Comments (3)Add Comment
written by Michael, April 14, 2010 10:12
The voters will care about the deficit because the Republicans and the media will tell them that it is the reason for the job loses. They have been told for years that government operates like any business or home. And there has never been any education to the contrary that sees the light of day.
Michael's right...
written by scathew, April 14, 2010 11:00
Unfortunately I think Michael's right - they will care about the deficit because they are told by the omniscient wisdom of the mainstream press and the Republican leadership that that is what they should worry about. That said, I don't think it much matters what the reasoning is behind the deficit being "bad" - the outrage will exist for outrage's sake regardless of substantiation.

In short, we have always been at war with Eastasia.
written by scott, April 20, 2010 9:41
Keep in mind that deficit spending means we have to run a surplus in better times. So, we not only have to fund our gov't--something that is seeming politically untenable as is, but we have to post taxes that will exceed just funding the gov't.

Politically, the old people aren't gonna vote to cut their benefits. The GOP has been arguing for no cuts to entitlements. So, we will get no cuts to entitlements, no tax hikes, and we'll continue to bailout old line firms as our economy transitions.

One lesson of the Civil War is the tendency of taxes to go after older industries and an inability to effectively tax novel income streams. By the time the civil war launched the South was paying 95% of federal revenues. The new industrial markets in the North East used fewer workers and weren't taxed like agricultural exports.

Similarly, we don't tax financial fiddling like conventional manufacturing. Firms with financial wings are able to avoid taxes while capital intensive manufactures pay inordinate taxes.

Dr. Baker, you've failed to address much of the sticky details of policy. Of course, no where in the legislative process is finding and crafting eloquent, artful taxes and regulation part of the process. It is this political dysfunction that makes the simple math you scribble pure academics. I've yet to see your waste multiple which should accompany all your projections of gov't obligations.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.