Neither Party Cares About Deficits. Democrats Don’t Even Pretend.

Lots of people on the left have suggested that Republicans don’t really care about deficits; they care about shrinking government and cutting taxes, and only use the deficit as a shield. Paul Krugman has been banging on about this for years; he has a running argument with MSNBC token conservative Joe Scarborough about whether deficits “matter,” a bizarre situation considering Krugman is a Nobel-winning economist and Scarborough is . . . a talk show host who manages to misrepresent even basic economic theory. (But hey, it’s a fresher smackdown than the traditional Krugman-Brooks spats.) In a typical column, he skewers both conservatives and the self-professed centrists of lobbying groups like “Fix the Debt”:

They love living in an atmosphere of fiscal crisis: It lets them stroke their chins and sound serious, and it also provides an excuse for slashing social programs, which often seems to be their real objective.

In a short piece at Bloomberg View, Evan Soltas makes a similar argument, with an important distinction: He thinks neither party genuinely cares about deficits, but that both use it as cover to avoid talking about the unpopular elements of their ideological agendas. By indulging in the time-tested Beltway practice of blaming both sides for extremist stances that are in fact far more common among Republicans than Democrats, Soltas stakes out new frontiers in false equivalency. Concern over red ink on the country’s balance sheet is “a rhetorical ploy,” he writes.

Here’s what’s really going on: a schizophrenic conversation about the proper size and role of government. It’s really easy to win political support for lower taxes or for particular government spending. It’s really hard, by contrast, to win support for the concomitant part of the Republican or Democratic agendas:  big cuts to specific federal programs or increases in average tax rates on the middle class.

Washington doesn’t have deficit monomania. It has an acute case of deficit displacement syndrome: a tendency to use a budget shortfall as cover to expand or contract the federal government. Instead of talking mainly about tax increases or cuts to government services, both parties disguise the real issue by feigning concern about deficits.

The headline — “Almost Nobody in Washington Cares About the Deficit” — is accurate, as far as it goes; he’s right that neither party truly cares about the deficit. They care, instead, about their respective ideologies, whether conservative (smaller government, fewer services) or liberal (bigger government, more services). But despite what Soltas believes and a remark by Nancy Pelosi that he seems to think proves his point, Democrats don’t really put a lot of effort into pretending to care about the deficit in the first place. Only one party – the GOP –uses our “crushing debt” to advance its priorities.

To be sure, both parties engage in double-speak to avoid facing the truth about the unpopular parts of their platforms. Republicans don’t like to admit that their vision of the country would throw children off food stamps and leave senior citizens at the mercy of the free market, and Democrats don’t like to admit that their vision requires higher taxes on a larger number of people than the so-called 1 percent. But while Republican double-speak involves a lot of talk about spiraling national debt and dark predictions of runaway inflation, the Democrats’ double-speak doesn’t touch on the deficit much at all. In fact, the right’s biggest criticism of the State of the Union speech was that President Obama didn’t talk about deficits enough.  His statement that ““Over the last few years, both parties have worked together to reduce the deficit by more than $2.5 trillion — mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans,” was pilloried as minimizing the problem, and conservative pundits marveled that the president could “ignore the $1 trillion-plus annual borrowing.” As any politician must these days, Obama paid brief lip service to it, claiming that he wouldn’t borrow “a single dime” to fund his programs, but mostly he just avoided it. When your agenda is to preserve – or even, let’s be honest, grow – government, there’s not much utility in telling Americans we can’t afford the one we already have.

While Soltas right that the debate over the deficit is really a debate about the deeper role of government, Democrats are quite straight-forward in saying that they want bigger government. “Obama is gradually winning the argument about what government can and should do,” writes liberal columnist Eugene Robinson, essentially refuting the notion that Democrats aren’t willing to engage in straightforward talk over the reach of government. True, he’s winning the size argument because he hasn’t asked the middle class to pay the bill, but there are no dodges about hiking taxes to pay down the national debt either. When Obama calls for more revenue, he’s clear that he intends to spend it. Just look at the State of the Union: Obama gave a laundry list of programs that big government should provide.

In a way, it seems obvious to say Democrats don’t really care about deficits. Of course they don’t, Republicans would tell you. The right repeats its favorite statistics ad infinitum: “The United States is today $6 trillion deeper in debt than it was before Barack Obama was first sworn in as president.” You can find plenty of liberals who admit flat-out that they don’t care about deficits. Iowa Sen. Tom Harkin declares that “I want to disagree with those who say we have a spending problem,” arguing instead that “it’s because we have a mis-allocation of capital, a mis-allocation of wealth.” Liberals like Paul Krugman say without reservations that we not only lack short term debt crisis but a pressing long-term one as well. “It was, in fact, a good thing that the deficit was allowed to rise as the economy slumped,” he has said of the recent recession. Krugman goes further than most Democrats in also denying that immediate action is necessary to address the long-term problem of entitlement spending. He dismisses the idea that we must cut spending now to avoid . . . cutting spending in the future. “There’s a reasonable argument for leaving the question of how to deal with future problems up to future politicians,” he writes, insisting that “the case for urgent action now to reduce spending decades in the future is far weaker than conventional rhetoric might lead you to suspect.”

Most politicians on the left are more cautious, pointing to runaway health care costs — not the conservative bete noir of discretionary spending — as the driver of future budget gaps. But when Democrats talk about deficits, they do so out of a sense of duty; Republicans have blown the issue so far out of proportion that people of every political stripe have to feign concern in order to avoid getting attacked. According to a recent Pew Center survey, over 70 percent of Americans think reducing the deficit should be a top priority. As Aaron Blake observes in the Washington Post, “In the current climate, saying there is no spending problem carries the risk of alienating Americans from the rest of what you have to say.” Still, Democrats don’t run around screaming about deficits like their hair is on fire; they lack what Politico calls “the urgency bordering on panic many grassroots conservatives are gripped by in an era of large deficits.” There’s no use in faking a sense of urgency because liberals don’t have much invested in pretending they care. Contrary to what Soltas claims, they don’t use concern over the deficit to hide a larger agenda. He thinks the left is being dishonest: “If you want to argue for more government, argue for more government.” It’s a strange accusation, because I see Democrats arguing for more government every day. They only address the deficit when pressed, while Republicans bring up the issue at every chance. They advocate raising taxes to fund Medicare, not raise taxes to pay down this dangerous debt. Republicans, however, definitely use the deficit as cover. We must cut spending, they argue, not because spending is bad — their real position — but because we can’t afford it. With interest rates at rock bottom and countries clamoring to lend us money, that’s patently untrue. Their concern over a short-term debt crisis, their claims that “never mind the future; the national debt is a nightmare right now,” are based on an economic falsehood.

Soltas is absolutely right that if Republicans think debt is a problem of the highest order, they should be willing to go further than they are to solve it. He rounds up quotes from Mitt Romney, who called the debt “simply immoral” and Mitch McConnell, who described it as “the transcendent issue of our time” to demonstrate the gravity with which Republicans talk about the deficit. Yet they’re unwilling to compromise an iota to solve the problem. “Republicans are so concerned about the deficit that they’re prepared to offer not a single major policy concession to address it,” Soltas writes. If it’s such a problem, surely solving it is worth any cost, right? Henry Blodgett of Business Insider writes that the GOP, if they truly cared so much about deficits, should have accepted the higher taxes that came with going over the “fiscal cliff.” “Yes, the economy will also get clobbered, but if your main concern is the debt and deficit, you should be okay with that. Your message, after all, is ‘we need to take our medicine.'” It’s fine, he suggests, to think that cutting spending is a better way to close the deficit than raising taxes, but if the issue is as pressing as they claim, they should jump at an even so-so solution. That they do not betrays their real concerns: not the deficit but low taxes, not the amount of borrowing but the ostensible “sprawl” of government.

“The GOP’s primary goal has been, and remains, low taxes on the rich. Republicans have never been willing to trade higher taxes on the rich for anything,” Jonathan Chait writes at New York Magazine. “Republicans care about this more than anything in the world,” including deficits, “which their revealed preferences have shown since 1990.” The protect-the-rich argument is not such an easy one to make, however; calling for cuts to benefits to senior citizens just doesn’t have the moral high ground of “protecting the next generation from crushing debt.” A Wall Street Journal op-ed calls the debt “generational theft,” yet to stop this theft they would cut the very programs — Medicaid, food stamps — that protect the youngest generation from poverty. They don’t care about the burden of borrowing on tomorrow’s Americans; they just want to slash and burn the federal government to keep taxes at record low levels.

Soltas cites a remark from Nancy Pelosi, who told Fox News that “it’s almost a false argument” that the country has a spending problem. Because she mentions the word “deficit” in the next sentence, Soltas thinks he’s found evidence of Democrats engaging in the same deficit-reduction shell games as the Republicans.

Scarborough’s critique aside, what was more intellectually dishonest about Pelosi’s comments was the next sentence: “We have a budget deficit problem that we have to address.”

What Pelosi managed to do with the combination of those two claims is to call for more taxes without saying the word “tax.” More government spending has all of these benefits, as Pelosi would argue — but paying for bigger government? Oh, that’s a “deficit problem.”

I’m not sure how he thinks Pelosi was using the deficit as cover. When she says we don’t have a spending problem, she leaves out the corollary — that if we don’t have a spending problem, we must have a taxation problem, one bigger and necessitating far larger increases than she’s willing to admit. That is the dodge here, not the lip service she pays later to the zombie idea that the U.S. is facing an immediate debt crisis. As Pelosi suggested, we do indeed have a long term deficit problem, which both parties admit. Democrats talk quite openly about their goal of raising taxes; they’re not hiding behind “deficit reduction” in the same way that the GOP, which uses the term as code for cutting social programs, does. Higher taxes are needed to pay for the investments we make today — infrastructure, universal pre-K education, unemployment benefits. Those investments, not the deficit, is the reason to ask Americans to pay more. We also have a long-term deficit problem, but that problem is not the one that the liberal agenda of higher taxes seeks to solve. Republicans, on the other hand, maintain that their agenda — cutting spending now, privatizing Medicare now — is necessary to deal with the deficit, that catch-all of evils. Acknowledging that, in the long term, entitlements like Social Security and Medicare are not sustainable, is not the same as claiming that a made-up debt crisis in the here and now is threatening the nation. Soltas conflates a false concern with a non-existent short term crisis with a legitimate concern about the health of entitlement programs in the long-run.

If Democrats were using deficit panic to further their political agenda of bigger government, their prime argument would be that we need higher taxes to pay down the debt. But that is only mentioned as an aside. They further their political agenda by essentially admitting what it is – more taxes for more government. It’s true that Democrats haven’t offered any real solutions, beyond nebulous and untested measures to reduce health care spending, but they also don’t use the deficit as a cover to raise taxes. When they talk about raising taxes, they only pay brief lip service to reducing the deficit. President Obama insists that we’ve done most of the heavy lifting already; only another $1.4 trillion, a number which has been challenged by many economists as too low, is necessary. It’s true that Democrats are dishonest in implying that every plan for job training and clean energy can be paid for by raising taxes only on the wealthiest – so Soltas is right that they don’t want to get realistic in their tax talk – but the deficit doesn’t really come into the picture. Only one party uses deficits as an excuse. This is especially evident when you ask yourself what Democrats would get out of hiding behind the deficit. After all, how would claiming deficits are unsustainable get the party any closer to its goal of more deficit spending and preservation of the programs driving the long term debt in the first place? For this reason, liberals mostly eschew deficit talk altogether.

Democrats are at least honest in basically saying, We want your money to spend on health care for old people, on food stamps, on bridges and roads. Republicans say, We want to eliminate huge portions of the government because we can’t afford our massive debt. There are differing levels of factual accuracy here, and to falsely equate the two positions as similarly specious is a tired “centrist” tactic. It is true that Democrats will spend taxes on Medicare, but it’s not true that programs need to be cut to service a debt that is currently a problem only in inflation hawks’ dreams. “Republicans don’t like Democratic spending priorities,” Kevin Drum writes at Mother Jones, “and yelling about the deficit is a very effective way of objecting to all of them without having to waste time arguing about each one separately.” They want to cut those priorities because they don’t believe they’re legitimate; giving a handout to the mooching “47 percent” via food stamps and unemployment insurance is morally suspect. It is not debt but big government that Mitt Romney really finds “immoral.”

Soltas doesn’t differentiate between the short-term and long-term problems with borrowing. The growth of entitlement programs over the next 50 years, the real problem, is acknowledged by both sides. When they discuss that problem, their solutions indeed reflect each party’s philosophy, but those solutions are also real approaches to dealing with it. Jonathan Chait suggests that Democrats genuinely care about the larger picture, because the viability of the big government programs they care about most — Medicare, Social Security — depend on it:

They — at least the dominant wing, represented by the Obama administration and most of the Congressional caucus — want to hold down long-term deficits. But they also care about inequality and don’t want to strike any deal that makes inequality worse, which would happen if you reduce the deficit solely by cutting social spending.

So Democrats peddle Obama’s “balanced approach” of taxes and cuts because they believe you need both, and Republicans call for spending cuts because taxes are anathema. These proposals are informed by ideology, not necessarily cover for it, making it different from the manufactured panic over a short term crisis that serves only to advance the GOP agenda of downsizing government. There is indeed a battle over the size of government, but deficit fear-mongering is only a weapon deployed by one side.

Fox on 15th Strikes Again

I must be turning into Dean Baker, the liberal economist who, with the regularity of clockwork, pens blog posts eviscerating the Washington Post as “Fox on 15th Street” for its semi-hysterical concern about the “swollen” national debt. (Way to go on that cool journalistic neutrality!)

The deficit hawks at the Post are indeed at it again, though, this time with an article questioning whether the agency-wide cuts mandated by the 2011 budget deal were really as painful as advertised. “Among the real cuts, they would mix in others that looked huge on paper but would turn out small in real life,” David Fahrenthold writes of the Congressional budget crafters. The author rounds up a slew of examples of budgetary gimmicks, from counting as “savings” money that wasn’t really going to be spent in the first place, like $6 billion allotted to the census department to conduct a survey that is only conducted once every decade . . . a requirement already fulfilled in the previous year. Also lamented is the fact that “the Transportation Department got credit for ‘cutting’ a $280 million tunnel that had been canceled six months earlier.” Overall, the Post reports that:

Today, an examination of 12 of the largest cuts shows that, thanks in part to these gimmicks, federal agencies absorbed $23 billion in reductions without losing a single employee.

At the Transportation Department, Congress canceled $630 million in “orphan earmarks.” These were the wandering ghosts of the highway budget: pots of money assigned for specific road projects, which were still sitting unspent years and years later.

Often, this money seemed unlikely to ever be spent. Many projects had been canceled. In one case, the funds were earmarked for a road that did not even exist.

The article does have a point; the cuts indeed “had little real-world effect,” if you think of the real world in terms of programs slashed and employees fired. But the “effect” of budget cuts should not be to cause as much pain as possible; the effect should be to cut spending. Isn’t it good news if agencies can find deadweight costs to eliminate without triggering negative “real-world effects” like fewer food inspectors on the beat and less money for FBI investigations?

The Post objects to the fact that agencies found enough efficiencies and wasted pots of money to make the required cuts relatively painless. If the point is that the cuts weren’t the window-dressing austerity that republicans demanded, that’s true. But the reductions were put in place not because they did all that much to curb spending — the real money is in health care costs and entitlements, as the folks at Fix the Debt keep telling us — but because conservatives needed cover with their anti-government base to justify raising the debt ceiling. Thus, the criteria for “successful” cuts — the criteria that the Post seems to accept at face value — is whether the federal government experiences as much pain as possible. House Appropriations Committee Chairman Harold Rogers bragged that his party had forced “deep, but responsible, reductions in virtually all areas of government.” The GOP wanted obvious cuts, outward signs that the sprawling tendrils of government were being hacked away by the conservative hoe. Those are the “real-world effects” they called for.

But who in their right mind would cut government programs simply to cause pain and disrupt programs? Ideally, cuts should be judged on whether they solve a budgetary problem, not by how many heads they lop off the federal hydra. And if your problem is a budget of $100, cutting $10 is cutting $10, whether that $10 is a”gimmick” or an actual employee paycheck. If I stop adding $4 to my daily budget to buy a Starbucks latte, that’s $4 I’m not spending, whether or not I spent the last week contemplating dropping the caffeine habit. If you accept the Post’s contention that the $10 wasn’t a “real” cut, then you must also accept the uncomfortable truth that you didn’t have a budget of $100 to start out with. You had budget of $90. If $10 isn’t real enough to be part of the solution to the $1oo problem, then it’s also not real enough count as part of the $100 in the first place. But the GOP would much rather tout the larger figure, as it serves to highlight the out-of-control nature of federal spending. If it counted only the spending considered real, the problem wouldn’t seem nearly so large.

The article’s sub-head, which boasts the thesis that “the much-touted bill was stuffed with gimmicks that made the cuts seem far bigger than they actually were,” is nonsensical. You could just as easily turn it on its head and write that “the supposedly gigantic federal budget was stuffed with non-existent spending that made the price tag seem far bigger than it actually was.” It’s not true to write that gimmicks made the cuts “bigger” than they seemed; perhaps the cuts seemed more painful than they really are, but $10 is $10. Defining the efficacy of budget cuts by number of employees fired is a bizarre metric. If the goal is to change what the accounting books say and $10 is removed from them, does it matter where that $10 comes from? Is it automatically better if it causes more pain? And wouldn’t it have been easier to just remove the “fake” $10 from the budget from the outset and admit you’re not in such dire financial straits after all?

Regardless of where the cuts come from and whether the money was really going to be spent, in terms of reducing the figures on the balance sheet, one cut is as good as the next. You can only discount the $10 if you’re willing to discount your starting number. Suddenly, you can’t argue that the agency is spending, say,  a massive $50 billion when you’re only willing to count $40 billion of that as “real” money. That pot of cash can’t be real on Monday and unreal on Tuesday. The Post buys into the ideological argument of the right that the purpose of cuts is to reduce government. That may be what conservatives believe, but that doesn’t make it true, and that doesn’t mean the Post should adopt that line. To see the degree of bias inherent in the Post’s perspective, imagine a similar article from a left-wing publication like Mother Jones. Using the same data, the progressive reporters could just as easily conclude that federal agencies have been grossly inflating their budgets for years. That $630 million in unused money sitting around the Transportation Department? Nothing but an accounting gimmick to artificially boost the spending baseline and lend credibility to the conservative narrative of a wildly profligate Obama administration.

When it comes to math, the Post’s objection to “phantom” savings has a problem: If the cuts aren’t real, was the “bloat” the cuts were designed to eliminate real in the first place? Robert Gordon, an Office of Management and Budget official quoted by the Post, makes the case that “budget authority is the authority to spend. You cut budget authority, you cut the ability to spend.” He is at least intellectually consistent, accepting both the starting number and the 2o11 cuts as real spending, while the Post deems only the former legitimate.

You can’t simultaneously maintain that the $100 billion (to make up an arbitrary round number) cut from the Pentagon isn’t real, then in the next breath say that federal spending is spiraling out of control because the Pentagon is spending $700 billion. We all need to work from the same baseline. If that $100 billion wasn’t real to start with, then neither was the $700 billion. What you’re left with is an agency with a budget of $600 billion — too big, surely, by many Tea Partiers’ standards, but also not as big as Grover Norquist tells you. The Post can’t have it both ways; if the cuts aren’t real, then the magnitude of the budget problem isn’t real either. Only if the $100 billion represents a real reduction can you say that the Pentagon is “spending” $600. Otherwise, you should be honest and start from the lower baseline. Of course, this means admitting that government budgeting is not an exact science at all — and thus neither is deficit reduction. What does it mean to say we’re “spending” $3.5 trillion a year if some of that money will never go out, and if more can be added by emergency bills like the Hurricane Sandy relief package? Accounting is full of sleight of hand, but to acknowlege the legerdemain is to acknowledge that the case for “spiraling spending” — and the case for simplistic solutions that do little more than shift money around, like kicking people off of Medicare to force beneficiaries to pay for what used to show up on the government’s balance sheet — is not as clear cut as it seems.

None of this mathematical manipulation will make the debate over the size and role of government go away. It’s the budgeting equivalent of arguing over semantics; your death panel is my Independent Payment Accountability Board, your welfare queen is my single mom. Likewise, in my view, the Post’s “gimmicks” are just more numbers in the government books, no more or less real than any other planned spending. We can change the language all we want, but even Frank Luntz can’t resolve the fundamental liberal-conservative disconnect over the drownable beast. The Post opines that the “legacy” of the 2011 budget deal have been “defined by its illusions. The impressive-sounding “cuts” added in to placate hard-charging conservatives have — upon further review — served to alienate them instead.”

Now, the hard right is pushing for the cuts mandated by the sequester to go through, because the $85 billion that will be pared from the budget at least represents “real” cuts, not simply painless rearranging. Even if Republicans were to agree that discounting “gimmicks” makes the budgetary baseline $10 billion lower, they would still push to slice more, because in the Republican reality, there is always more fat to cut. Government, to the GOP, is like Newt Gingrich or Karl Rove: a doughboy, a giant shank of ham plopped on Stephen Colbert’s desk. You can cut forever and never hit bone.

Deficit Hawks Nest in D.C. Media

The Washington Post is a notorious deficit scold. In its editorials as well as in its straight news articles, it regularly paints America’s fiscal situation in dire, Republican-friendly terms. Liberal economists, particularly CEPR’s Dean Baker, keep a running commentary of the paper’s front-page editorializing on the dangers of the national debt, which is apparently a problem that outweighs unemployment, crumbling infrastructure and essentially any other dilemma the country faces. Baker calls the Post “Fox on 15th Street,” accusing it of “ignoring journalistic standards” in its ideologically driven “deficit reduction jihad.” It’s true that the Post engages in some serious fear-mongering on what it sees as the feds’ unrestrained borrowing. No matter that the U.S. is mired in the worst slowdown since the Great Depression; there’s no time like the present to cut the national debt. One might wonder whether the paper, and specifically business-section reporter Lori Montgomery, who is often behind the anti-spending screeds, is an arm of the Pete Peterson “Fix the Debt” claque.

Today, in a “news” article about the CBO’s budget projections, Montgomery makes the factual case that deficit spending, while declining to less than $1 trillion in 2013 for the first time in years, will resume its steady march upward by the end of the decade. The national debt — our total debt, which is different from the yearly gap between revenues and expenditures — is still increasing, and represents a greater portion of GDP today (77 percent) than any time since World War II. It’s true, of course, that the U.S. borrows approximately 40 cents of every dollar it spends. That’s a lot. But whether such borrowing is deliberate — a response to a fiscal crisis and perhaps even a savvy move given that super-low interest rates mean investors are essentially paying to lend the government money — or “out of control” is not a fact but a value judgment. Just because Eric Cantor and John Boehner say something doesn’t make it true. (And Cantor sure says it, ad nauseam. Just today: “There is no greater moral imperative than to reduce the mountain of debt.”)

But Montgomery goes beyond the facts. She could have chosen to stick to the text of the CBO report, which expresses sufficient concern about borrowing:

The report lists several reasons for additional action to restrain borrowing: First, the debt is “very high by historical standards,” larger as a percentage of the economy than at any time in the nation’s history except for World War II, which “poses an increased risk of precipitating a fiscal crisis.”

Reporting on the actual document wasn’t enough, though. One word in this sentence especially stuck in my craw:

The national debt would stabilize to around 77 percent of the economy after years of rampant borrowing to fight the worst recession since the 1930s, the CBO said.

Well, no. The CBO never said “rampant,” a word so heavy with judgment that it could have been plucked from a GOP press release. Adam Lanza went on a “rampage” at Newtown. Corruption is often described as “rampant” in backroom politics. Criminals “run rampant” in lawless cities. So when you use the same word to define government borrowing, you’re putting a pretty forceful thumb on the moral scales. Given the parlous state of the economy in 2008 and the possibility of a financial-system meltdown, have the past few years of borrowing really so disproportionate to the problem? With unemployment hovering around 8 percent, is it really a bad thing for the federal government to go into debt to keep people out of poverty? Borrowing to fund unemployment insurance and Social Security payments (illusory trust fund “lockbox” notwithstanding) ameliorates significant social problems.

Plenty of smart people on the left, from Paul Krugman to Peter Orszag, are of the opinion that the national debt, while undoubtedly a long-term dilemma, is not something we should deal with in the short term. Year-to-year deficits represent increased spending on counter-recessionary measures like the one-time stimulus package and higher unemployment benefits that will eventually disappear. Furthermore, the time to tackle the deficit is after GDP growth returns to pre-recession levels, not before. Slate’s Matt Yglesias even writes that “there’s genuinely no good reason to be balancing the budget or worrying about the deficit right now,” despite the unrealized (for over five years now!) concerns about non-existent inflation and hypothetical “bond vigilantes” who will punish the nation for its fiscal looseness. Furthermore, there is a certain uselessness to curbing the amount the government borrows simply by cutting spending when the real driving force behind the need to borrow — rising health care costs — represents an as-yet-unsolved quandary. “The noncrazy worry about large projected long-term deficits has nothing to do with deficits and instead is about the fact that buying health care services for all these old people is likely to be very expensive,” Yglesias adds. Former OMB director Orszag admits that the long-term debt is problematic, but also writes that “stimulus spending, even when the economy is very weak, isn’t free. Nevertheless, it’s still a very good idea.” Stimulus spending, it should be noted, would likely be funded with borrowed cash. The Post, for its part, editorializes against such deficit doves, branding them the “Don’t Worry, Be Happy” caucus and opining that stabilizing (rather than reducing) the national debt would be a “paltry achievement.”

“Rampant,” then, is not the word I would expect from the Post’s editorial page, not from a front-page article. And it’s certainly not a word I would choose to describe U.S. borrowing. “High” is fine, “increased” is fine — both express mathematical realities. But “rampant” implies that borrowing is somehow wrong, sinful and unrestrained. It buys into the Republican fantasy of President Obama grabbing wildly at piles of Treasury cash and ignores the fact that every dime of borrowed money has been spent on a program authorized — quite deliberately, if not necessarily wisely — by Congress. Ironically, at the same time it demonizes deficit spending, the Post regularly rails against the sequester-imposed spending cuts that would . . . reduce the need to deficit spend, running editorials titled “Defense cuts that need to be avoided.” All politics are local at the Post, and God forbid curbing borrowing involve pain for northern Virginia’s defense contractors and Pentagon suppliers.

In a sharp contrast to the Post article, a piece from Politico at least acknowledges the tension between slashing borrowing and boosting the economy:

The numbers underscore the persistent tension between reducing the deficit and helping along the economic recovery. Indeed, if the cuts were to go into effect on top of tax increases already enacted, it will cost the economy about one percent of GDP in 2013.

Meanwhile, Republicans are reacting in standard Republican fashion, pushing legislation that would require the president to submit a plan specifying the year in which the budget will balance. “We know, and the American people agree, spending is the problem,” John Boehner intoned, ignoring the fact that maybe, uh, a depressed economy and historically low tax rates are the problem. Alabama Representative Mo Brooks has proposed a Constitutional amendment that would make failing to balance the budget an impeachable offense. (No word on whether representatives who voted for said spending could also be removed from office.) Paul Ryan, the erstwhile GOP vice-presidential candidate, issued a predictable statement in reaction the budget office’s projections:

The CBO’s report is yet another warning that we need to get spending under control. The deficit is still unsustainable.

It’s a press release that could have been penned by the Washington Post.

AP: The Devil is in the Deficit

The Associated Press just rolled out a new model of journalism, something it calls “New Distinctiveness” — as opposed, I guess, to New Camouflage. In a memo to staff, the AP’s senior managing editor declared that “We’re going to be pushing hard on journalism with voice, with context, with more interpretation.” He goes on to promise that “this does not mean that we’re sacrificing any of our deep commitment to unbiased, fair journalism,” though that hasn’t satisfied critics mourning the end of an era. Washington Post blogger Alexandra Petri bemoans the fact that, in the Internet age, there is no shortage of personal opinion. She writes, “Even the AP, last bastion of dry, just-the-facts-ma’am reporting, is getting in on the act now.” Really? What planet does Petri live on? “Just-the-facts” is hardly how I would describe the sort of slanted, point-of-view articles the AP has been churning out lately. In fact, promising readers more interpretation sounds a lot like doubling down on the AP’s worst quality. And it certainly won’t make the organization’s articles any more distinctive. The last thing the world needs is more news filtered through an ideological lens — that’s why we have Fox News and MSNBC.

Yesterday’s article about the Senate’s upcoming vote on a balanced-budget amendment to the Constitution is a prime example of the bias that already poisons far too many AP pieces. The article has since been updated to reflect the failure of the two competing amendments, but in the original version, reporter Jim Abrams tells us that “Congress will try again to force itself to mend its profligate spending habits.” This assertion plays right into the Republican narrative of the federal government as a bloated, overspending bureaucracy. “Profligate” implies not only spending money one does not have (which Congress is certainly doing) but spending money foolishly, with “reckless extravagance.” It implies waste. While we can all agree that Congress is racking up debt, it’s a matter of opinion whether that debt is being used for worthy purposes. The GOP has been fantastically successful in turning “deficit” into a dirty word. The truth is, it all depends on what you’re running up deficits to pay for. Jared Bernstein, writing in the journal Democracy, points out “the distinction between borrowing to consume and borrowing to invest. Our deficit comes from both types of spending . . . . But few deficit hawks make the distinction.” Giving tax breaks to the wealthy? That, Bernstein suggests, can be categorized as “profligate.” Investing in infrastructure and research that will pay dividends for years into the future? That’s worth breaking out the MasterCard, especially when the costs of taking on extra debt — i.e. interest rates — are at an all-time low.

The GOP likes to proclaim that the American government doesn’t have a revenue problem; it has a spending problem. But it’s one thing for a political party to hold that belief; it’s quite another for an ostensibly neutral news organization to trumpet it as fact in the opening line of an article. Bernstein observes that “One of the most common refrains in today’s debate is that the federal government spends too much. There’s little substance to this claim.” As Joe Biden’s former chief economist, Bernstein is hardly a disinterested party. But the facts support his contention. As a percentage of GDP, spending is indeed higher than the average — by about three percent. Meanwhile, revenues are at an all-time low of 15%. It makes infinitely more sense to me to reduce the deficit not by cutting the very programs most needed in a recession but by nudging revenue back toward its 40-year-average of 18 percent. In a perfect world, this increase in revenue would be driven by economic recovery, but in the absence of such fortune, I would lean toward raising taxes. Allowing the Bush tax cuts — all of them — to expire would go a long way toward pushing the budget into the black. Adding a handful of brackets at the upper end of the income scale would also help, as currently the millionth dollar someone earns is taxed at the same rate as the 400,000th.

Snazzy charts from the CBO

The Congressional Budget Office offers a convenient breakdown on where Congress spends its money every year. Judge for yourself whether these expenditures are “profligate.” But remember that one man’s profligacy is another man’s Social Security payment. What looks like a federal intrusion to Republicans is the only way a single mother in Minneapolis will receive health care. Nearly fifty-six percent of all spending is “mandatory” — mostly Social Security, Medicare and Medicaid. Of the spending that is labeled discretionary, over half goes to defense. Together, these two categories add up to 75 percent of the budget. It’s hard to make a case that the government is on an unrestrained spending binge unless you consider a large part of that 75 percent wasteful. The much-maligned earmarks, the pork, the bridges to nowhere — these all fall under the heading of “nondefense discretionary,” which comprises a measly 18 percent of the total. It’s hard to make the case that spending 18 percent of the budget on anything, even if it is research on nematodes or a peanut museum in Georgia, constitutes profligacy. It’s like blaming $50,000 in credit card debt on a daily mocha from Starbucks. Labeling the other 75 percent (about 7 percent goes toward interest on our debt) of the budget wasteful assumes one of two things: Social Security and Medicare aren’t worth it, or national defense isn’t worth it. Liberals would likely be offended by the former, while Republicans would take exception with the latter. And neither is a neutral position or an objective observation. Neither should have made it into the first line of a news story.

The AP is not Fox News. It is not deliberately carrying water for the GOP; in fact, in many cases, from its obsession with sniffing out malfeasance in the NYPD to its thinly disguised disdain for nuclear power (nuclear plants are “nukes,” a loaded phrase if I ever heard one), it leans to the left. But it is also a fundamentally lazy organization when it comes to enforcing objectivity and good writing. Adopting a “New Distinctiveness” policy that rewards voice and interpretation will only make the situation worse. As I’ve written (or whined about) previously, the AP likes to think of itself as an advocate for the “little guy,” a down-home voice of reason speaking truth to power to the out-of-touch bureaucrats in D.C. By so blithely accusing Congress of profligacy, it further cements the official AP narrative of a broken government that deserves its rock-bottom approval rating. But encouraging disgust with the legislature also plays right into the hands of anti-government Republicans who label President Obama a socialist and who, judging by the enthusiasm of the crowd at the Nov. 9 Republican debate, would rather see a man die on the street than grant the feds an ounce of control over health care.

At its core, the debate about deficit reduction is not really about deficits at all. If Republicans were really concerned with closing the budget gap, they would be open to all options for deficit reduction, including raising taxes. But they’re not. Jonathan Bernstein, who blogs for the Washington Post and is no relation to Jared Bernstein, suggests that, for all the GOP’s talk about fiscal responsibility,

Republicans simply don’t care about deficits . . . . When they say they want to reduce the ‘deficit’ they’re not talking, as everyone else is, about narrowing the difference between federal government receipts and expenditures. Rather, when they say something is exacerbating the deficit, it just means they want to do away with it, whether it’s spending on social programs or working class tax cuts.

I have to admit, it’s a pretty good strategy. After all, it’s hard to oppose living within our means. It’s hard to explain that there are more important things than paying down our debt. People genuinely concerned with fiscal responsibility — which includes not only saving money but spending it wisely as well — already have to contend with the conservative sleight of hand, the Republican demonization of the deficit. They shouldn’t have to contend with irresponsible journalism as well.

Super Failure

As the Congressional supercommittee grinds toward failure, the Times published an article on Saturday contending that the panel is “stymied by a deep rift over whether affluent Americans should help reduce the deficit by paying more taxes.” True, and it goes straight to the heart of the issue: Democrats think the solution to our budget problems must include higher taxes, while Republicans would rather close the deficit by cutting spending. To truly plug the hole in the budget, bumping up rates for the wealthiest Americans won’t be enough, but even Democrats aren’t stupid enough to admit that the middle class will also need to chip in. When the GOP won’t even contemplate allowing the Bush tax cuts to expire for households making over $250,000, why mention the inconvenient truth that confiscating 100% of millionaires’ income won’t fix the national debt?

Still, the disagreement over taxing the rich is the highest-profile and most emotional issue the supercommittee faces. One line from the Times article illuminates what I see as the fundamental flaw in the conservative argument against using the tax code to “redistribute” wealth. Reporter Annie Lowrey writes that Democrats are wary of the GOP’s proposal to lower tax rates and curb exemptions, “fearing tax cuts would require cutting even more from government programs that primarily aid the poor.” It’s true that the Medicare, Medicaid and Social Security — to say nothing of the smaller programs like food stamps and housing assistance — disproportionately benefit those with lower incomes. But it’s disingenuous to claim that “the poor” are the only beneficiaries of these programs. Elizabeth Warren, despite being terribly overhyped by the media (New York magazine calls her “a saint with sharp elbows,” while the Times magazine blares that “heaven is a place called Elizabeth Warren”), drew criticism from Republicans for articulating the truth about government spending. Video of her speech went viral in liberal circles. She said:

There is nobody in this country who got rich on his own — nobody.

“You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for . . . .

“Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.

So, though Medicare and Medicaid may matter more to people with little savings and low incomes, even the rich benefit from programs ostensibly aimed at the poor. Unless the wealthy are content to live in a country where they’re accosted on the street by beggars or where consumers are too poor to purchase the goods they produce, indiscriminately cutting government spending benefits no one. Hedge fund managers and CEOs don’t reap the rewards of the social safety net as directly as the average person, but that doesn’t mean they are unaffected.

Republicans argue that the wealthy already pay more than their “fair share” of taxes — nearly 40 percent. Tea Party favorite Senator Rand Paul said today that “The vast majority of millionaires and billionaires are paying all of the taxes. That’s who pays the income tax.” Well, no kidding: When you earn most of the income, of course you’re going to pay most of the income tax. The richest 1 percent of households contribute an increasing percentage of tax revenues because their income has also increased. The Washington Post has some fantastic graphs to illustrate this point. Between 1986 and 2008, their share of the tax burden jumped 54%. But over the same period, their incomes increased by 119%. Far from paying more than their fair share, the most affluent now pay only 23% of their income to the government — down from 33% in 1986. And yet, that proportionately smaller contribution still entitles the wealthy to the same benefits — roads, an educated workforce — that it did nearly thirty years ago.

I’m going to go out a limb here and predict that the supercommittee won’t have a sudden breakthrough in the next four days. This might be just fine, considering that the cuts mandated under sequestration don’t touch Social Security or Medicaid, and only take a small swipe at Medicare. The defense budget would take the biggest hit, an outcome that wouldn’t be unwelcome. But the likelihood of those defense cuts taking place is nil. John McCain, Lindsey Graham and other hawkish Republicans are already exploring ways to weasel out of cuts to Pentagon spending. The whole point of sequestration was to make failure by the supercommittee unpalatable, but changing the rules halfway through the game makes bitter medicine go down a lot easier. With the panel deadlocked and Republicans offering only token tax increases (which are only on the table if all the Bush tax cuts are extended), you have to wonder if failure wasn’t their game plan all along.

Birth of the Deficit

The New York Times ran a great graph in its Sunday opinion section. Accompanying a piece titled “How the Deficit Got This Big,” it shows the origin of the current budget deficit. Which president added $5.07 trillion to the deficit? Let’s just say it wasn’t Obama.

Republicans Cash Social Security Checks, Too

Statements like this, from an Associated Press article about the “debt showdown” (thanks, AP, for that added bit of drama) crack me up:

Republicans have insisted that entitlement programs such as Medicare need substantial changes, but have loudly objected to any revenue provision that could be deemed a tax increase. Democrats, eager to keep changes to their cherished health care programs to a minimum, have demanded that any plan must have new tax revenue.

Their cherished health care programs? Really? Remind me who was yelling at the government to keep its “hands off my Medicare!” Yup, that would be angry Tea Partiers, self-declared arch enemies of “big government.” Republican politicians — and today’s politicians are nearly all millionaires — may not give a fig about health care programs or Social Security, but let me assure you, the average 65-year-old Republican taxpayer cares. That average Republican may not admit that he or she benefits from government programs (the home mortgage deduction and child tax credit are called “entitlements” for a reason), but take away Grover Norquist’s hefty bank account and even that paragon of tax phobia would be crying for his Social Security check.

The idea that Democrats have “won” something in the debt ceiling negotiations by preserving Medicare and Social Security is ridiculous. If Republicans gutted the programs, a la Paul Ryan’s version of reality, voters would be calling for their heads. Anti-government rhetoric sounds great until the cuts become personal. This notion that the GOP is “giving in” on health care and social safety net programs is a convenient diversion; it suggests that conservatives are compromising when in fact they are doing nothing of the sort. A husband who “compromises” with his wife by volunteering to mow the lawn while she washes the dishes — when, deep down, he’d pay to drive the ride-on mower for an hour — is not sacrificing anything at all. We need to move beyond the idea that Democratic voters are the only ones who care about “cherished health care programs.” There’s a lot more cherishing going on than the GOP is willing to admit.

Tax Increases? Yes, Please.

An interesting article on balancing the budget ran in Monday’s Times: “Politicians Can’t Agree on Debt? Well, Neither Can Economists.” Reporter Binyamin Applebaum writes that “Economists agree that federal borrowing must be reduced, but they do not agree about the proper mix of tax increases and spending cuts.” Both ways of reducing the deficit have economic costs, but it is difficult to quantify and compare those costs. Which produces greater pain, tax increases or spending cuts? I found this argument convincing:

Both approaches cause immediate economic pain, but the dominant school of economic theory predicts that tax increases should be somewhat less painful to the nation’s economy. A $100 spending cut reduces economic activity by $100, while an equivalent tax hike will be paid partly from savings, so that spending is reduced by a smaller amount.

Several studies have found the opposite, however — that tax increases inflict greater harm on the economy than spending cuts. It’s hard to tell how much conflict really exists among economists; after all, until recently, media coverage of global warming emphasized that there were two schools of thought on the subject, and falsely claimed that intelligent people disagreed. (In reality, nearly all mainstream scientists agree that man-made global warming is occurring; only a handful of fringe figures remain skeptical.) That said, one of the studies Applebaum cites was conducted by the IMF, a respected institution (albeit one based on free-market principles) that can’t be accused of shilling for the Republicans.

It’s very possible that tax increases do more “harm” to the economy than spending cuts. However, I don’t believe that automatically makes spending cuts the more desirable remedy. Decreased economic activity is indeed one measure of a nation’s well-being, but it is not the only one. Not all economic activity is good: I would rather see the GDP decrease because fewer millionaires are splurging on yachts and BMWs than see it increase because Wall Street has invented another shady mortgage product. The economy was humming along before the 2008 financial crisis, but it’s hard to argue that the country was healthier or better off because people were buying houses they couldn’t afford. The classic example of “negative” economic activity is the drug trade: Yes, it brings in money, but at what cost? (New York Magazine ran a provocative piece suggesting that Texas’ booming economy is largely fueled by the cross-border drug trafficking, which puts money in the pockets of home-buying and service-consuming residents.)

This paragraph of the Times article stood out to me:

The monetary fund study reported that a 1 percent fiscal consolidation achieved primarily through tax increases reduced economic activity by 1.3 percent over two years, while an identical consolidation driven primarily by spending cuts reduced activity by 0.3 percent.

Those percentages are straightforward, but not so straightforward are the conclusions we should draw from the study. Spending cuts seem to be the obvious choice, as they slow the economy by only 0.3 percent, but consider how those spending cuts are achieved. Slicing government programs rarely has an effect on the wealthy; after all, no one is considering eliminating things like tax-sheltered health savings accounts or the home mortgage deduction (after all, Republicans would call that a tax increase!), both of which disproportionally benefit the well-off. Spending cuts mean cuts to programs like Medicaid, food stamps and welfare that help people at or near the poverty level.

It seems to me that these cuts have a smaller impact on the economy than tax increases because the poor have little choice but to spend money on food and medicine. I imagine that most people who receive less money in food stamps make up the difference not by relying on soup kitchens or food pantries but by dipping into savings, relying on credit cards or finding a second job. Thus, the same amount of economic activity (food buying, medical bills) occurs; the only thing that has changed is the source of funding. It looks as if the government is spending less, but in reality the cost has simply been shifted onto those citizens least able to afford it. The Treasury may accumulate less debt, but ironically. individuals may be forced to accumulate more. Given that fiscal conservatives love comparing the government unfavorably to a family who can’t exceed its budget by borrowing or increasing its “national debt” (when in reality families do so all the time by racking up Visa debts or taking out payday loans), it’s interesting that proponents of spending cuts tend to overlook this. In addition, I wonder how much long-term damage such shifts in spending do to the economy. A mother who raids her savings account to buy cereal and milk is not saving for her children’s education or for potential emergencies. If she is out of money when her car breaks down, she might lose the job if she can no longer make the commute, and that will increase unemployment. If she has no money to pay for a trip to the emergency room, the hospital will end up writing off the bills as charity care, which won’t help the economy either.

I’d rather opt for tax increases, especially those which fall most heavily on the well-heeled (those corporate jet write-offs Obama loves to talk about come to mind, but so do the ridiculously low rates at which capital gains and other investment income are taxed), than spread the pain around with ill-advised tax cuts. There is always the argument that higher taxes squelch job creation, but that reasoning sounds more like woe-is-me whining from the business community than a rational fear. Companies are sitting on record piles of cash, yet job creation does not seem to be a priority. Raising taxes for hedge fund managers is unlikely to prevent the local plumbing company from hiring another worker. At the end of the day, I would rather see the top ten percent of Americans pay higher taxes, even if it does dampen economic activity, than shred the social safety net.

Republicans’ Kids Are Probably Brats

I’ve finally figured out the right analogy for the debt-ceiling “option” that Mitch McConnell proposed yesterday. In a Times op-ed, Nicholas Kristof describes it like this: “Congressional Republicans would invite President Obama to raise the debt ceiling on his own, and then they would excoriate him for doing so.” Through some Constitutional gymnastics, Obama would ask Congress to raise the debt limit, conservatives would “disaprove” of the increase, Obama could veto that disapproval, and the the increase would be sustained. To add insult to injury, the President would be forced to come begging to Congress as many as three times before the 2012 elections, as the debt ceiling would only be raised incrementally, instead of in one $2.4 trillion swoop. Oh — and Obama would have to detail spending cuts equal to each increase.

Well. Mitch, why don’t you just take your ball and go home?

At any rate, I have been hunting for a better analogy than the old refusing-to-pay-the-Visa-bill trope that every reporter seems to trot out. The decision to raise the debt limit reminds me of the choice between paying for groceries on credit and letting your children starve. Yeah, racking up debt is bad, but are you going to tell Bobby and Suzie to fast for a week?

The best analogy for McConnell’s proposal, however, is that of the parent who’s too afraid to discipline his child. He wants to be his kid’s best friend, so he makes his wife out to be the bad guy. It’s always Mom who sets the bedtime, Mom who takes away the cookies and puts her foot down when Junior wants to use the family cat for target practice. So Mom gets the blame, and Dad can tell the kid, “Hey, your mother just doesn’t know how to have fun.” Likewise, McConnell and Boehner can’t control their Tea Party colleagues, so they’ve designed a plan that absolves them of any adult responsibility. There won’t be any Republican fingerprints on the debt increase, so GOP candidates can keep telling voters, “Hey, we’re not the ones on a liberal spending spree!”

President Obama wants Washington, D.C., to eat its peas, but at this rate, it looks like he’s going to be having dinner in Michelle’s organic White House garden alone.

 

Afghanistan: Everything Has a Price

On Wednesday, President Obama announced his plan to draw down American troops in Afghanistan. Ten thousand will leave the country by the end of this year; another 23,000 will pull out by next summer. The president cited the reduced threat from Al Qaeda and the killing of 20 out of 20 “most-wanted” militants, but the subtext to his speech was all about the economy. Republicans have done an about-face on national security, with the party’s 2012 presidential field expressing major reservations about the American military adventure. Jon Hunstman has been the most outspoken, criticizing American involvement in Libya and bluntly telling Esquire magazine that “We just can’t afford it.” The Times reported that he also asked rhetorically about Afghanistan, “Should we stay and play traffic cop? I don’t think that serves our strategic interests.”

Other Republicans are following suit, with Jeff Zeleny of the Times writing that the shift “appears to mark a separation from a post-Sept. 11 posture in which Republicans were largely united in supporting an aggressive use of American power around the world.” So what has changed? The Tea Party, for one; Michele Bachmann and company are persistently isolationist, deriding the very concept of foreign aid and tacking away from George W. Bush’s “freedom agenda.” In the eyes of Ron Paul, et. al., liberty is more endangered by the creeping “socialism” of the Obama administration than by Islamic extremists abroad.

The other elephant (in both figurative senses of the word) in the room, of course, is the national debt. The breadth of President Bush’s push for regime change in the Middle East was anathema to many conservatives, who saw the billions of dollars poured into Iraq and Afghanistan as an abandonment of fiscal conservatism and small-government policy. Now, with Republicans determined to slash and burn their way to a “balanced” budget (insofar as a plan that boots children off food stamps and replaces Medicare with vouchers can be called balanced), both parties are scrutinizing Pentagon spending for savings. The AP described some of the proposed cuts as “gimmickry”:

Under the rules followed by the Congressional Budget Office, the agency currently projects war spending to grow with inflation even as troop drawdowns are ongoing. That means House Republicans could claim more than $1 trillion in savings by cutting the budget for war costs to $65 billion for 2014 and $50 billion a year shortly thereafter.

To some extent, conservatives are coming late to the party. Liberal Democrats have been screaming for years about the diversion of national treasure to the wars in Iraq and Afghanistan. Dovish progressives stand ready with statistics about exactly how many teachers could be hired for the cost of one fighter jet, or how many Medicaid cuts could be avoided by plugging the hole with the shrink-wrapped loads of cash flown into Baghdad. On Monday, the United States Conference of Mayors passed a resolution that urged the president to end both wars and “bring these war dollars home to meet vital human needs, promote job creation, rebuild our infrastructure, aid municipal and state governments, and develop a new economy based upon renewable, sustainable energy and reduce the federal debt.” (The mention of the federal debt was a last-minute sop to Tea Party-esque conservatives.) Though it’s not as if money cut from the Pentagon’s budget would automatically be re-routed to cities (the federal budget is not exactly one big fungible pot), it’s telling that even low-level officials feel obligated to protest the expense.

Predictably, Republicans have castigated the president on both sides of the question. Mitt Romney, who has lately been just a step behind Huntsman in calling for an end to Middle Eastern entanglements, said that “this decision should not be based on politics or economics.” Tim Pawlenty, the most hawkish of the potential nominees, described the drawdown proposal as “deeply disturbing.” Obama faced an equal amount of criticism from the left. Joe Manchin III, a senator from West Virginia, railed against paying for a war when the nation is deeply in debt: “Will we choose to rebuild America or Afghanistan? In light of our nation’s fiscal peril, we cannot do both.” Manchin sets up a false dichotomy; surely America is rich enough to do both, especially if we raised the capital gains tax and allowed the Bush tax cuts to expire. Eliminating farm subsidies and tax loopholes for oil companies would also bring in a tidy sum.

It certainly seems straightforward to blame the wars in Iraq and Afghanistan for the country’s fiscal mess. In an article entitled “Cost of Wars a Rising Issue as Obama Weighs Troop Levels,” the Times’ Helene Cooper explains that “spending on the war in Afghanistan has skyrocketed since Mr. Obama took office, to $118.6 billion in 2011. It was $14.7 billion in 2003, when President George W. Bush turned his attention and American resources to the war in Iraq.” The increased costs in Afghanistan, of course, dovetail with a decrease in costs in Iraq, as Obama shifted his focus from the so-called “war of choice” to the “good war.” Cooper cites the upcoming election as a factor in what she terms “the argument over whether the United States should be building bridges in Kandahar or Cleveland.”

The either-or formulation is popular, but it is also simplistic in that it transforms a complicated question into a binary choice. Of course, the reduction of a thousand complexities into one yes-or-no decision is a familiar Republican tactic. (For example, conservatives would have us believe that freedom and a social safety net are mutually exclusive.) In this case, however, both parties use simplification to advance their priorities. In a Newsweek article, Lawrence Kaplan states his thesis in the headline: “Afghanistan Is Not Making America Bankrupt.” Kaplan argues that military strategy should be created without input from the guys in accounting. A war crucial to America’s interests is no less important simply because it carries a steep price tag. “Put another way, if the war is right and necessary, then its expense shouldn’t matter,” he writes. “Likewise, if it is wrong or unimportant, either morally or strategically, the president has no business risking a single American life in Afghanistan.” Maybe somebody should have mentioned this to George W. Bush before he invaded Iraq.

Discussions about the cost of war often throw around large numbers: Ezra Klein of the Washington Post points out that the Congressional Budget Office estimates that ending the war in Afghanistan will save $1.4 trillion. This is largely due to the fact way the budget office makes its projections:

In the case of discretionary spending — which is the pot of money that goes to the wars — they simply take current spending and assume it grows at the rate of inflation. So though it’s clear our wars are winding down, they won’t count the savings from them in their projections until there’s explicit government policy that winds them down.

Kaplan sees things in a different light. He writes, “Next year the Pentagon plans to spend $107 billion in Afghanistan—this, in comparison to the $3.7 trillion that the Obama team plans to spend overall. Put another way, Afghanistan amounts to all of 0.75 percent of the nation’s $14.1 trillion GDP.” By contrast, the amount spent on Medicare, Social Security and “other domestic spending” is around $2 trillion, or 20 times the annual cost of waging war in Afghanistan. Kaplan also points out that “one-time sunk costs like equipment and construction—the constellation of bases that loop around Afghanistan, not the troops who inhabit them—account for the war’s steepest expenditures.” In other words, we’ve already spent a boatload of money in Afghanistan; backing out now will do nothing to recover those costs. If the U.S. beats a hasty exit, it’s cutting off its nose to spite its face, since the ongoing cost of the war is minimal compared to the investment we’ve already made.

I don’t know enough about the defense budget and military costs to know if Kaplan is correct, but I am immediately suspicious of his conclusions, if only because $107 billion still sounds like a lot of money. John Boehner and friends almost shut down the government this spring over a paltry $38 billion. Over at the Times’ “Room for Debate,” Kevin Hassett of the American Enterprise Institute, a conservative think tank staffed by deficit hawks, echoes Kaplan’s analysis:

The Congressional Budget Office originally estimated that troop surge in Afghanistan would cost about $36 billion between 2010 and 2013, so reversing this expenditure should provide a peace dividend of between $10 and $15 billion per year. A conversation about a “peace dividend” must begin with the observation that this amount is absurdly small compared either with the $118 billion budgeted for Afghanistan in 2011 or with the overall deficit of about $1.5 trillion.

The $1.5 trillion Hassett cites is the amount borrowed by the government for one year; the national debt (as opposed to the budget deficit) is in the neighborhood of $14 trillion. That $1.5 trillion is strikingly close to the $1.2 trillion that economist Mark Zandi notes that we’ve spent in Iraq and Afghanistan over the past decade. Though I don’t buy the theory, articulated by Zandi as well as several of his fellow contributors, that reduced defense spending in the 1990s was a direct cause of the economic boom and accompanying budget surplus, he does make a valid point:

For context, there is general agreement that the federal budget deficit must be reduced by some $4 trillion over 10 years to make the government’s fiscal situation sustainable. Simply cutting spending by half in Iraq and Afghanistan over the next decade would go a long way to achieving that goal.

In his speech on Wednesday, President Obama said that  “America, it is time to focus on nation-building here at home.” I have my doubts that the money not spent in Afghanistan will go to repairing roads or creating jobs. Cindy Williams, another “debater” at the Times, shares this outlook. She opines that “if history is a guide, any peace dividend we get will be used instead to reduce federal deficits.” Military spending decreased in the 90s, but “virtually none of the defense windfall found its way into infrastructure, education or other government activities.”

Lost in all the talk about the cost of war is the significance of talking about it at all. Anti-war Democrats have been pilloried in recent years for suggesting that the U.S. withdraw “before the job is done” — the equivalent of “cutting and running.” A measure of that criticism was still evident on Wednesday evening, when prominent Republicans like John McCain lambasted the president for attaching (supposedly) artificial timetables to battlefield decisions. But that’s just the point: Battlefield decisions are not made solely by battlefield generals. There is a reason that the president, a civilian, is also the commander in chief of the military. Tactical decisions are not the only criteria by which foreign adventures are evaluated, despite any wishful thinking by Lawrence Kaplan. The war in Afghanistan does not exist in a vacuum, and by bringing cost-benefit analysis into the picture, Obama is only accepting reality. Perhaps it is distasteful to suggest that the public’s appetite for war should sway the president’s choices on national security, but elected officials are elected for a reason. If they cease to consider the public’s interest, they have ceased to do their jobs.

The Times reports that General Petraeus, at a hearing about his nomination as C.I.A. director, told the Senate Intelligence Committee, ““There are broader considerations beyond those just of a military commander.” He is correct in his deference. Writing in Foreign Policy magazine about Jon Huntsman’s call to wind down U.S. involvement in Afghanistan, Douglas A. Ollivant states that the conversation about troop withdrawal “needs to happen in Washington.” He continues:

Too often we hear from politicians and pundits that we should defer to “the commander in the field.” But the commander in the field does not ask and should not be asking these questions. It is not the place of the ISAF commander Gen. David Petraeus to ask questions about our interests and do a cost-benefit analysis . . . . It is his job to do the best he can with the resources provided within the scope of clearly articulated national policy guidance that should, and must come from Washington.

This Wednesday, it did. Whatever the financial pluses and minuses of bringing home the “surge” troops, at least a decision has been made. Yet those who hope the country can finally move on from the wars of the past decade may be too hopeful. We’ve still got a pile of national debt and a Republican Party that refuses to bend to fiscal reality. If the GOP wants to cut and downsize its way back to prosperity, it should at least acknowledge that Obama is helping them out. After all, the cutting has to start somewhere.