By fnord12 | August 11, 2011, 12:40 PM | Liberal Outrage | Comments (1)| Link

Here i go again

Robert Reich was Clinton's Secretary of Labor. I guess he still has contacts at the White House, and he says:

Americans are deeply confused about why the economy is so bad - and their President isn't telling them. In fact, the White House apparently has decided to join with Republicans and blame it on the long-term budget deficit.

I'm told White House political operatives are against a bold jobs plan. They believe the only jobs plan that could get through Congress would be so watered down as to have almost no impact by Election Day. They also worry the public wouldn't understand how more government spending in the near term can be consistent with long-term deficit reduction. And they fear Republicans would use any such initiative to further bash Obama as a big spender.

So rather than fight for a bold jobs plan, the White House has apparently decided it's politically wiser to continue fighting about the deficit. The idea is to keep the public focused on the deficit drama - to convince them their current economic woes have something to do with it, decry Washington's paralysis over fixing it, and then claim victory over whatever outcome emerges from the process recently negotiated to fix it. They hope all this will distract the public's attention from the President's failure to do anything about continuing high unemployment and economic anemia.

This mainly ensures that the public will continue to not understand "how more government spending in the near term can be consistent with long-term deficit reduction".

I don't see that it's difficult to explain. If we must put it in terms of household budget metaphors, everyone understands that while taking out a mortgage to buy a house, or taking out a student loan, creates debt in the short term, it is a good investment in the long term. I think most people understand that hiring an accountant can save you money, even though you have to pay the accountant. And i suspect people understand that when a business makes an investment in their infrastructure - buying software that automates a manual payroll process, for example - the company is doing so because they expect a return on their investment that is greater than the money they are paying for the software.

What's even better about being the Federal government is that you're an immortal entity with guaranteed income growth. You don't have to save up for retirement when you hit 65. And barring catastrophe, the GDP will always increase, meaning the dollar you borrow today is worth less than the dollar you will earn tomorrow.

And best of all, right now, borrowing money is very cheap. Interest rates are very, very low. It's like if i told you that you could buy a house at .5% APR.

Investing in our economy now gets it growing again, which means more revenue faster for the future, reducing our debt.

Finally, the biggest source of our long term debt problems is growing medical costs. Both private and public medical costs are growing at an alarming rate. But public costs are growing more slowly. So if we spend money now in ways that reduce costs in the future (kind of like automating that payroll system), we're killing two birds with one stone.

I don't know why the President can't say these things. He's a better communicator than me or Paul Krugman, and he's got the resources of the White House behind him. Democrats are always a superstitious cowardly lot, even though their timid approach always bites them in the ass. Even if taking this approach was "risky" to my re-election goals (i don't think it is), if i were President i wouldn't see the value of being re-elected if it meant that i got to sit through another four years of paralyzed gridlock and debating the issues on the Republicans' terms. But more and more, i don't think it's an issue of Obama being timid. I think he's a moderate conservative and he's achieving exactly what he wants.