The Liberal Battle Cry: Damn the S&P Downgrade, full Tax and Spend Ahead

Posted by PITHOCRATES - August 7th, 2011

The Democrats are already making Strategy to Encourage a Second Credit Downgrade

S&P downgraded U.S. debt because Congress failed to make significant, and real, spending cuts.  Now either that’s important.  Or it’s not.  During the debt ceiling debate they warned us of impending doom should the U.S. lose its coveted AAA rating.  Now that we lost it, well, it’s not that big of a deal.  In fact, the Democrats are already making strategy to encourage a second credit downgrade (see U.S. Debt Drama Is Far From Over by Albert Hunt, Bloomberg News, posted 8/7/2011 on The New York Times).

Specifically, they hope the president will insist that every dollar of spending cuts the supercommittee demands be accompanied by a dollar of higher revenues, and to say that changes in entitlements and taxes are joined at hip.

Mr. Obama, they say, also should play the national security card, forcing Republican to choose between higher taxes or about $600 billion in defense cuts.

“He can force Republicans to make a fundamental choice: Do they care more about protecting tax breaks or national security?” says the ranking Democrat on the House Budget Committee, Representative Chris Van Hollen of Maryland.

This is truly Orwellian.  We’re going to cut spending by not cutting spending.  For every dollar we cut we’re going to add another dollar of spending.  So, if you do the math, the net change in the deficit will be zero (-$1 + $1 = $0 of deficit reduction).  Granted these members may not possess higher degrees in mathematics.  But I’m sure somewhere in their education they learned the three Rs.  One of which was ‘rithmetic.  That math discipline that teaches kids how to add and subtract numbers.

Perhaps they skipped their arithmetic lessons to attend ‘hating your country’ lessons instead.  “If you don’t increase taxes we’ll cut defense spending. And when we’re attacked and people are killed it will be your fault for not increasing taxes.  How do you like them apples?  Huh?  You like that?  Don’t think we’ll do it?  Try me.”

A Redistribution of Economic Activity doesn’t add Economic Activity

Spending.  That’s all they want to do.  Spend.  Spend.  Spend.  Because it takes care of people.  And it stimulates the economy (see 20 areas on the brink of economic recovery by Venessa Wong posted 8/7/2011 on Bloomberg Business Week).

A key sector that is no longer expected to boost the recovery is government. “The metropolitan areas that suffered least since the beginning of the recession typically had increases in the number of government jobs,” the Brookings report states. Many state and local governments are shedding employees to cope with budget shortfalls.

Oh dear.  Reduced government spending?  Why, that will throw the economy into recession.  For any school kid knows that the government drives all economic activity.  At least that’s what they think. 

The city of Detroit fought for years to get casinos.  For they were sure it was the panacea for all that ailed their city.  They pointed across the Detroit River at Caesars Windsor.  And all the money it was bringing into the city of Windsor.  “See?!?  Casinos are just big piles of money with buildings over them.”  And, so, they eventually got their casinos.  Didn’t help the city a damn bit.

The problem with the casinos is that they didn’t bring new money into the economy.  They just siphoned off money from other businesses in the local economy.  People gambled with money they would have spent at the movies.  On dinners.  At ballgames, concerts, museums.  Etc.  So it was only a redistribution of economic activity.  The same money was spent.  It was just spent at different locations in the same local economy.  Ergo, it didn’t do a damn thing to help the city.

It’s the same with government spending.  The money government spends is taken from people who would have spent it themselves in their local economy.  So government employees are spending money that others would have spent.  If it wasn’t taken away from the people who earned the money.  So it’s only a redistribution of economic activity.  The net add to economic activity is zero. 

Most People would say that Obama Campaigned as a Centrist but Governed as a Liberal

Of course there is a very large school of thought that disagrees with this.  Keynesian economics.  The school of thought that says government spending stimulates when the private sector will not.  The Obama administration is full of Keynesians.  Who hold one simple philosophy.  Spend.  And spend they did. 

The 2008 deficit was $455 billion.  Which included TARP.  The bailout program for the subprime mortgage crisis.  The 2011 projected deficit is $1.6 trillion.  That’s over a trillion dollars of additional deficit spending.  Which is pretty darn leftist in most books.  But there are some who call this being a moderate (see Stuck in the Muddle by Paul Krugman posted 8/7/2011 on The New York Times).

The one thing I might say is that we shouldn’t really wonder what happened to Obama — he is who he always was. If you paid attention to what he actually said during the primary and the election, he was always a very conventional centrist. Progressives who flocked to his campaign basically deluded themselves, mistaking style for substance. I got huge flack for saying that at the time, but it was true, and events have borne it out.

Funny.  Most people would say that he campaigned as a centrist.  But governed as a liberal.

Barack Obama has the distinction of having the most liberal voting record in the Senate.  As president, when he had majorities in both the House and the Senate, he pushed through Obamacare.  National health care.  The holy grail on the Left.  And he calls this centrist?  One shudders to think what a Krugman progressive would do.

Liberals just want to Tax & Spend, Redistribute Wealth and Play God

No one seems to get it.  Except for Standard and Poor’s.  The Tea Party.  Some Republicans.  A few others.  And Daniel Hannan.  Who once told Gordon Brown, “You cannot spend your way out of recession or borrow your way out of debt.”  And he’s from the UK.  Home of John Maynard Keynes.  So why can’t the Left get it?

Because all they want to do is spend.  Tax and spend.  To redistribute wealth.  And play God.  Which should be abundantly clear by now.  Based on their words and actions.

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