Deficits matter... to whom?

We keep hearing from the right that deficits matter.  But they matter to whom?

I think the answer provides both insight and explanation into behavior of the GOP.

Long-term deficits matter to the poor and middle class - not the uber-wealthy. Long-term deficits will, at some point, drop us into an era of high interest rates and high inflation - destroying the life savings and crippling the wage-driven economy for the middle-class and poor.

GOP presidents have been in charge for 80% of the deficits. GOP presidents had veto power over all that spending.  Did they just forget themselves? I can see it through a glass, darkly: the GOP wakes up one morning with a head slap and says "Damn, I forgot to stop the deficit spending."

Why should deficits matter to the uber-wealthy?  They can easily move money offshore into investments that are inflation protected.  They can even move themselves offshore if the peasants become a problem. It's really rather simple logic. If deficits mattered to the uber-wealthy, the Bush administration would not have run up massive deficits. People don't spend 8 years doing what they really oppose.

If you claim "deficits matter" while simultaneously creating deficits through both good and bad economic times, then you are either stupid or a hypocrite. As proven by behavior, as long as deficits are created by lowering taxes and providing services to the wealthy, the GOP is quite content to let the red ink run up. Indeed, the GOP doesn't mind deficits created for middle class spending as long as it also helps corporate interests and doesn't shift power out of their hands (for example, the GOP drug benefit in Medicare).  But any Democratic spending that might please the middle class and shift power out of GOP hands brings out the clarion: "deficits matter."  Notice how quickly the argument disappears when you say - "OK, let's tax the people who have the money to solve the deficit problem." 

If deficits matter to the wealthy, why didn't they wield their political clout in the Bush administration to maintain the Clinton surplus or (at least) keep deficits small? The answer, of course, is that you can't balance the federal budget except by 1) taxing the wealthy - as Clinton did, or 2) cutting services to the middle class - including social security and medicare - which the GOP threatens but has never done. Of course, during the Bush years the first option was unacceptable to the wealthy GOP base (who are needed for campaign contributions), and the second option would have lost votes of the independents and elderly the GOP needed to get Bush re-elected. It follows that the only way the GOP could maintain their position in the Bush years was to pretend that deficits matter while doing nothing about them.  Today, nothing has changed.

The GOP's historical behavior in simultaneously promoting deficit spending and tax cuts is unworkable. 

The only question is how badly will they wreck the country before the voters stop them.

P.S.  To the extent I understand economics - I'm a Keynesian and support deficit spending during bad economic times, along with increased taxation and spending cuts during good economic times.

Bush spent your tax cut.

It's time for Americans to grow up and admit it.  Between 2001 and 2008, we took our kids' credit cards (including the cards of the unborn) and maxed them out.  Nothing but IOU's left in the rainy day fund for when the crash came. 

Oh, we had our reasons - we needed that new Hummer, had to buy a 4800 square foot house with 12 foot ceilings, simply had to invade a couple countries to make sure that a handful of terrorists couldn't attack us.  You know the excuses.

Of course, we could have paid for it all at the time, but we believed in Santa Claus who told us that "tax cuts will stimulate the economy and will bring in more revenue in the long run."  Well, the long run is now, when the tax cuts are expiring.  How did that all work out for you?  Did you see the deficit disappear as the tax cuts worked their magic?

The Easter Bunny also assured us that once the rich got their tax cuts and invested it in America, the wealth would rain down on the middle class.  I'm not sure where the rich were investing, but we had the only decade since the Great Depression with stagnating wages in the middle class.  Looks like the Easter Bunny played us for fools.

Time to grow up.

The middle class sent their sons and daughters to fight and die in Iraq and Afghanistan - what did the wealthy do for their nation?  Well, they moved company headquarters to a PO Box in the Cayman Islands for tax breaks on foreign income and outsourced jobs to India to profit from lower wages.  The middle class held their families together the best they could despite stagnating wages and skyrocketing costs for education and health care.  The rich, they got richer.

It's time the wealthy pay for the wars that protected them and the capitalist system that allows them to take an ever-increasing share of this nation's wealth.

Why tax the wealthy?  Because that's where the money is.

Once we pay for the wars and the other deficit spending of the Bush administration, then I'll be glad to talk about how we need to change government spending to bring a better balance between the private and public parts of the economy.  Until then, its time to clean up the mess you've made.

Bush spent your tax cut.