Ryan Grim at the Huffington Post argues what a lot of us have been saying: The White House's decision to embrace deficit reduction over economic stimulus is wrong-headed politically and economically. And I know they're going to claim that they haven't embraced one over the other, but here's the rub: Even President Obama, expert as he is at embracing all sides of a conflict, can't square increased spending and cutting it back at the same time. That message might fool the people, but it doesn't fool the economy.
Under the leadership of President George W. Bush, science, empirical evidence and expert advice struggled to be heard above the din of politics. It's one thing to prioritize politics over good policy; it's quite another to let bad politics drive the agenda. But that's what the Bush administration did during its Terry Schiavo era and his congressional majorities paid the price.
Today, a new band of Mayberry Machiavellis has gained control, counseling President Obama to ignore the advice of his economic team and press forward with deficit reduction ahead of job creation.
Academics Benjamin Page and Lawrence Jacobs, in the recent paper, "Understanding Public Opinion on Deficits and Social Security," have identified an additional reason that the deficit continues to rank high in polls as a prominent concern. "The 'most important problem' question responds heavily to whatever is being emphasized in the media, apparently because many respondents interpret it as asking what other people consider important," they write. "They look to the media for evidence. So a well-organized and well-funded campaign against deficits (like the one led by Peter Peterson) can grab the attention of pundits and politicians, win coverage in the media, and produce a temporary spike in responses that deficits constitute our 'most important problem.'"
The more that the president highlights deficit concerns, the more concerned the public gets, and the more his advisers warn him that the public is concerned.
The Obama political team's focus on the deficit raises the question: Just who is this hypothetical midterm voter who was leading to the GOP because of deficit concerns, but will vote Democratic if only Congress trims a spending bill from, say, $250 billion down to $80 billion? Most voters -- and most reporters, for that matter -- can't guess within a few hundred billion what the budget deficit is, and would struggle to put a dollar figure on the latest jobs-bill proposal. So how is it, then, that a voter would cheer saving a few billion dollars by cutting off COBRA subsidies?
Despite all of that spending, unemployment has hovered around ten percent, leading voters to assume and leaving Republicans to argue that the stimulus didn't work. The reality is that it did save or create hundreds of thousands of jobs, if not millions, but was too small -- as economists warned at the time -- to fill the economic hole left by the housing collapse and financial crisis.
