After a brief hiatus, Badger Democracy is back. We’ll get to Paul Ryan and deficit hawks in a moment, but first, some announcements.
Thanks to all followers of Badger Democracy for your comments and participation in 2012. 2013 will be a critical policy year in Wisconsin, so continue to stay informed and engaged in the democratic process. To that end, Badger Democracy will focus on media coverage of political events in Wisconsin, and look to fill the void, offering media criticism when and where appropriate.
Next, Congratulations and welcome back to Sly! There will again be a little balance on political talk radio in the state. Sly is taking over afternoon drive time with a three state on-air reach (Wisconsin, Illinois, Iowa), and worldwide on the web. Starting February 4th, Sly will be heard from 3 – 6:30pm, Monday – Friday on 93.7 WEKZ-FM. Updates and archived segments will be available on the revamped “Sly’s Office.” Watch out Rahm and Pat Quinn, Sly can now be heard in Illinois…
Now, for Mr. Ryan. Congressman Ryan rejoined the ranks of “serious people” on Sunday, joining Greg Neumann on Capitol City Sunday. The Congressman from the 1st District of Wisconsin continued his litany of deficit reduction being of greatest importance to the fiscal health of the nation. Unfortunately for Mr. Ryan, he is suffering from DCFS – Deficit Crisis Fear Syndrome.
The President got his tax increase. That pays for about five percent of the deficit, (and) spending is the ultimate part of the problem here that we have to deal with. The President has been trying to hide, or stay away from a conversation about spending. We gotta deal with spending.
I want to do this in a responsible way, but I do not want to let an opportunity slip by to get a control on spending, which we so desperately need if we’re going to prevent a debt crisis.
Classic DCFS (Deficit Crisis Fear Syndrome). If using serious language is the new standard for being taken seriously, our nation is in serious trouble. The media in Wisconsin needs to read the memo from real economists, and see through the talking points. The deficit is not our biggest problem. Chronic, long term unemployment is our biggest problem. What the new breed of conservatives refuse to acknowledge is that by creating real, family-supporting jobs and an increase in revenue, our deficit problem will be solved.
Brad DeLong illustrates the point rather nicely today.
…policies to reduce the deficit in the short run–before 2016, say–are highly, highly likely to actually increase the long-run burden of the national debt. Even making the unlikely assumption that deficit reduction in the near future would reduce rather than increase the long-run burden of the debt, the fact is that the debt-to-GDP (Gross Domestic Product) ratio is now stable until at least 2020. A lower debt-to-GDP ratio would be a good thing in the long run, but there is absolutely no urgency. And there is enormous urgency in getting the economy moving again. (emphasis added)
“Moving again…”- as in investment to create those illusive, family-supporting jobs that pay more than $15/hour. The truth about the deficit is, that with the current growth of the economy (as slow as it is) and recent revenue measures, the debt-to-GDP ratio is already beginning to stabilize. Paul Krugman posted the Center for Budget and Policy Priorities graph last Thursday:
The vertical line represents the projected debt as a percentage of GDP. Each colored line projection represents a different scenario affecting the deficit. Krugman breaks down the analysis:
The blue line at the top represents the projected path of that ratio as of early 2011 — that is, before recent agreements on spending cuts and tax increases. This projection showed a rising path for debt as far as the eye could see.
Conservatives are framing the discussion as if that dark blue line represents the current fiscal reality, because it re-enforces DCFS (Deficit Crisis Fear Syndrome)…but that is not the truth of the situation. Krugman continues:
The orange line shows the effects of those spending cuts and tax hikes (Budget Control Act 2011, American Taxpayer Relief Act 2013): As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon.
“The debt ratio will stabilize soon.” The CBPP advocates for an additional $1.4 trillion in combined revenue and spending cuts, represented by the red line. As a frame of reference, in 2010, debt-to-GDP exceeded 100% and has been on the decline – dropping to about 72% in 2012:
Based on the factual data, not Paul Ryan’s DCFS talking points, the deficit situation, even without any additional revenue or cuts, is stabilizing. It has been stabilizing since early 2011, a fact that is consistently ignored as the media continues allowing Ryan and company to get away with promoting their DCFS talking points.
The runaway debt crisis talking point is something that should be relegated to the 2012 election dustbin. The focus should really be jobs that get the economy moving again, and investment to make that a reality.
With all due respect to Greg Neumann, who is one of the best political reporters in the state, I would suggest referencing the final point from Krugman for his next interview with a conservative who attempts propagating Deficit Crisis Fear Syndrome (DCFS):
…at this point reasonable projections do not, repeat do not, show anything resembling the runaway deficit crisis that is a staple of almost everything you hear, including supposedly objective news reporting.
Fear never solved anything. Paul Ryan and company need help getting over DCFS-Deficit Crisis Fear Syndrome, so we can get down to something REALLY serious – solving our long-term unemployment problem.
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