Cartoon: Talking About The Deficit

Cartoon: Talking About The Deficit

[spoiler]Cartoon depicts a woman and her child, sitting on the edge of the curb. The child is sleeping leaning against its mother. In front of them, a homemade cardboard sign reads “Unemployed Hungry.” On the sidewalk behind the pair, two men wearing jackets and ties are arguing back and forth: Deficit! Deficit! Deficit![/spoiler]

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19 Responses to Cartoon: Talking About The Deficit

  1. 1
    Robert says:

    Obviously, people in previous fiscal generations took your side of this argument and worried more about the people on the curb/invading Russkie hordes/green energy subsidies than about the future fisc. How’d that work out for them? Oh right – they created a bankrupt future where people are now more worried about the deficit than about urgent current needs. TANSTAAFL.

  2. 2
    Ampersand says:

    Robert, you’re a conservative. Free Lunches are virtually the only thing your party does believe in. Your policy’s consistent policy is that we can have 1) enormous tax cuts, 2) huge increases in military spending, 3) not cut any program voters like, 4) ?????, 5) balanced budgets! This is Romney’s platform, it was McCain’s platform, and it was how Bush governed.

    Obamacare was paid for with tax increases and Medicare cuts (which the Democrats rightly paid for at the voting booth). Medicare Part D, under Bush, was paid for with a gigantic IOU to the budget. That pretty much represents the difference between the two parties.

    Right now we are in a gigantic, immediate unemployment crisis, which is itself contributing to the deficit by reducing revenues. We also have a long-term deficit problem. A gigantic unemployment crisis is more urgent – contrary to what Republicans claim until the moment they take power, the US is not even close to broke — and also something that should be addressed as part of any serious anti-deficit policy, since the longer the unemployment crisis lasts, the bigger the hit to the US’s long-term revenues. (A long spell of unemployment depresses a worker’s wages for their entire working life, not just while the unemployment lasts.)

    It’s easy to imagine a compromise which would combine a stimulus-laden temporary jobs act, with lots of tax cuts and direct aid to states, with revenue increases and spending cuts phased in according to the unemployment rate. But what’s impossible to do is imagining the Republicans in congress going along with such a compromise.

    Anyhow, the good news for you is that currently, both Democrats and Republicans agree that any serious attempt to fight unemployment is off the table. Yay.

  3. 3
    RonF says:

    Amp, you rightly bring Bush into this conversation. But in context I see you’ve made the common mistake that Republican = conservative. Bush I and II were “big government” people just like most Democrats are. They just had a different focus. Conservatives vote Republican because when they step into the ballot box that’s the lesser of two evils. Changing that so that the Republican alternative is also a conservative alternative is what the Tea Party movement is all about.

    Many people on the left vote for the Democratic candidate for analogous reasons. The difference there is that Occupy has not had political groundwork as an objective. Occupy did nothing during the primary season of 2012 compared to what the Tea Party movement did in 2010 – or 2012.

  4. 4
    Robert says:

    “Conservative” is not a party, and other than that I’m not going to engage any of the partisan arguing you do here, Amp. Not dismissing it as “so obviously wrong as to be unworthy of my wrath”, but irrelevant to this thread.

    At some point in the past, people decided that fighting unemployment, or ensuring there were lots of libraries, or killing Sandinistas, or SOMETHING, was more important than balancing the budget. I guess you can argue this point, but I don’t see how you can argue it without being a dumbass, which I know you are not. So: we borrowed money to have jobs programs or space ninjas or some damn thing; yesno? Yes. Yes, we did. We can tell ‘cos the budget report for those years has big red inky splotches on it. Spent more than made, increased deficit, not subject to debate.

    Did we do this once? No. We did this time after time after time. With a couple of exceptions – and if you want to grab some partisan points, some of those exceptions were under Democratic leadership or maybe even all of them recently – every year we have spent more than we have earned. Increased deficit, year after year after year. Subject to debate yesno? No.

    So: we are here now because we went there then. You may in all fairness argue that the things we borrowed money to pay for were stupid things and the Republicans (or Democrats) who advocated for them were stupid poopyheads and that Space Ninja Poptart Factories were a stupid idea. You may be right. But WHATEVER we spent the money on, we spent it, and NOW (finally) the weight of debt has grown so large that “holy shit we are like totally out of money” is outweighing, for the moment, “there are unemployed people and only if we invest in Space Ninja Poptart Factories can jobs be found for them”.

    In other words, the point your cartoon is making boils down, on some level, to “the worldview behind this particular cartoon used to win the argument a lot, and now as a result, there’s no appetite left to shovel money at these folks on the curb, who are very very sad.”

    Also, your last bit about agreeing that we can’t do anything for the unemployed? Not true. Running a balanced budget boosts employment of people that private industry *actually wants* because it makes lending capital more available in the market, so that employers who have a product to sell and a market to sell it into can borrow the money they need to expand their operations. Government is great at giving whacking subsidies or tax breaks to get companies to hire people they don’t really want or need to hire. It’s a lot more effective for government to manage its finances competently, and leave the employers to hire where there is genuine organic need for more labor.

  5. 5
    Ampersand says:

    Ron, I don’t really care whether or not Republicans are “true conservatives.” Republicans are who conservatives vote for. The people conservatives vote for and actually elect have never been serious about balancing the budget, and I see no reason to think that they ever will be.

    If you want to say that’s not the fault of conservatives, because if they could they’d elect people who actually would balance the budget in ways that work in the real world (which would have to include revenue increases), then okay. I can accept that, although I’d like to know what structures exist that make it impossible for conservatives to get their folks elected. But I certainly agree that such structures might exist (as they do on the left, alas).

    I agree that as far as causing shifts in policy, the Tea Party has been a lot more effective than Occupy. But I don’t agree that the Tea Party is seriously about balancing the budget, because you can’t combine a radical anti-tax agenda with balancing the budget into a realistic, actionable policy.

  6. 6
    Charles S says:

    and NOW (finally) the weight of debt has grown so large that “holy shit we are like totally out of money” is outweighing, for the moment, “there are unemployed people and only if we invest in Space Ninja Poptart Factories can jobs be found for them”.

    This remains as much horse shit as it was back when you were insisting the bond vigilantes were right on top of us and about to drive interest rates to astronomic levels, any moment now (more than a year ago). The same people who are blocking social spending are also demanding more and better tax cuts for the rich. If they were actually motivated by fear of the bond vigilantes, they wouldn’t be pushing for tax cuts far larger than anything we have ever spent on the long-term unemployed, nor would they be pushing for further increases in military spending.

  7. 7
    Robert says:

    We don’t need “bond vigilantes” to explain market operations on capital. We didn’t get exploding interest rates because the administration wisely backed off the idea of massive quantitative easing.

    As for my thesis being horse shit…well, OK. But it’s Amp’s cartoon showing the power brokers (my assumed take on the role the shoe-people are playing in his melodrama) talking nothing but deficit. If the primacy of concern – real or feigned – for deficit spending is horseshit, then the premise of the cartoon is horseshit.

    Personally I don’t think either are horseshit; there really is, if not a monopoly on the discourse, a new openness to the idea that the deficit era has to be coming to a close.

    And I will have to agree with Amp that it’s very difficult to conceive of a serious balance-the-budget movement that also wants large tax cuts. Tax adjustments, maybe, a flattening of the revenue curve, sure – but I can add same as the next guy. If we’re serious about deficit elimination or reduction, then there’s just no room for big tax cuts. Maybe in ten years, when the spending curve is permanently down and we’re running surpluses, we can hand some of the surplus back. But not soon and not in a big way.

  8. 8
    Ben Lehman says:

    Interests rates are incredibly low right now. That we are not taking on more national debt is ridiculous political grandstanding, not anything even vaguely related to sensible policy. The national debt could be half-again as much without serious worry, and that’s money we could use (building anti-disaster infrastructure, say).


  9. 9
    Robert says:

    The current national debt is $16 trillion dollars, slightly more than 100% of GDP, and flirting with the historic high seen in 1945, when the debt approached 113% of GDP because we had just finished, you know, defeating Nazism. (With a little help.)

    You apparently think we should quickly borrow another $8 trillion, putting us at an all-time modern record for indebtedness, because interest rates are low. This is an interesting financial theory. You are, I assume, aware that interest rates vary over time and that, even at our current level of debt, a return to the historical averages for interest rates will be absolutely crippling to the Federal government’s ability to pay for all but the most basic functions. I am sure that tacking an extra 50% onto this already terrifying bill will be hunky dory.

    (For the number-happy: in 2008 with an interest rate of 3.25% or so, the Federal government spent about 10% of the budget on debt service. Recent-decade interest rates have been anywhere from 4% to 12%. A 12% interest rate, with a 50% increased debt load, would mean a Federal government spending about 60% of its gross income on debt service. Think about what that would imply. That’s why the suits are muttering deficit, deficit.)

    I assume – maybe I’m wrong – that you base the lets-borrow-half-again-as-much on the grounds that the most sclerotic economies of Europe, the ones who haven’t quite yet corkscrewed into the ground, have a higher debt-to-GDP ratio than we do. This is akin to deciding that the toxicity of various drugs depends on what other people are doing, rather than on one’s own health. “Mindy is doing half again as much heroin as me, and hasn’t died, ergo, my current heroin load can increase 50% without any problem.”

    Debt is not heroin, and a healthy economy can carry a very high debt load. Guess what? 100% of your annual production is a very high debt load. Blithely saying we can increase the speed of our roll by half is crazy talk.

  10. 10
    Charles S says:


    No, the yammering about deficits drowning out recognition of actual needs of human beings is an excuse for cutting programs Republicans hate, focus group tested and approved. It has nothing to do with anyone deciding that it is critical that we actually deal with deficits (as shown by the supposed deficit hawk party running a candidate whose policies would massively expand the deficit).

    What is horseshit is the claim that the current wave of deficit cutting puffery has anything to do with a real need to deal with the deficit, rather than with “deficits! to the fainting couch!” being what Republicans cry out when Democrats are in office.

    [and on the bond vigilante aside, So now that we have QEIII in place, I assume the bond vigilantes are breathing down our necks again?]

  11. 11
    Elusis says:

    Yeah, anybody who seriously talks about ending subsidies to public radio and public television as a deficit reduction measure isn’t kidding themselves, they’re deliberately pulling the wool over their constituents’ eyes.

  12. 12
    Robert says:

    Possibly, Elusis, at least if they present that as something that standing alone is going to make any difference. But a fair part of the psychology of Washington’s funding mechanisms comes from the “wafer thin mint” aspect of so many programs. Most government programs are not Space Ninja Poptart Dispensaries (or the new one-on-every-block Government Poptart Scanners, so you can scan your pastries to your Facebook page!) – most of them make at least a degree of sense and have some constituency. There are only a few (giant) programs that in and of themselves would put a dent in spending if repealed. The rest of it is 100,000 wafer thin mints, at a lousy half-billion apiece.

    No, nuking one mint is not going to balance the nutritional chart…but not being willing to nuke even one mint has a chilling effect on the ability to make any change. If we can’t kill PBS – a worthy, relatively inexpensive, productive, and utterly non-critical function of the Federal government – then we can’t kill anything and we might as well just start handing out shotguns and planning for the zombie apocalypse now.

    Charles, I haven’t really looked at the financial markets since our last tussle, and don’t plan to, so no idea about the bond traders. I am in agreement with you that the Republicans are inadequate when it comes to being serious about the deficit. That leaves us with one party trying to dazzle the public with smoke and mirrors (and purely nominal staffing choices) about deficits…and another party doing what? It’s really kind of hard to tell what the Democrat pitch on deficits is. They must be bad, because Obama promised to cut them in half by now. They must be tricksy, since he made no progress on that that shows on the bottom line. But they must not be all THAT terrible because Democrats appear to prefer them over cuts to favorite programs.

    In any event, while I’ll own the Republican lack of genuine leadership, I won’t concede that the national conversation (especially the conversations being held by We the Peepul) is not about the deficit. Yeah, there are a lot of Republicans who want to cut social programs (and some others like me who also want defense cut) – and? It seems mathematically obvious that both kinds of cuts are necessities, not rhetorical stalking horses. We spend more than we bring in. We can up taxes a little bit, but then we’re going to have to cut hundreds of billions. That means big reams of worthy social progrtams, productive weapons programs that terrify Al Qaeda, and Joe Biden’s airplane budget are all up on the block.

  13. 13
    Grace Annam says:

    At the risk of making the universe explode, I think that Robert makes a really good point when he points out that spending more than you earn, always, leads eventually to system failure. Clearly there are better times and worse times to walk back deficit spending and pay down debt, and almost as clearly it is not as simple as kitchen-table economics, because of the collateral effects of various policies.

    It does seem to me that, absent emergencies which actually threaten the stability of the entire system, we should not let our government habitually spend more than it takes in. How much debt we should routinely carry is a subject for debate, and it’s not my topic; I have seen noted economists argue that carrying some amount of debt is a good thing, for many reasons, and I’m in no position to rebut them.

    So: carrying debt to some extent may be a good thing. Carrying too much debt is certainly a bad thing (mathematically, when 100% of income goes to service debt, you’re screwed). Where is the dividing line? I don’t know, and I’m content to let people who have a better handle on it decide.

    However, I would like the average income/outgo ratio, over a span of years, to be 1:1. Thinking long-term, anything amounting to 1:(1+n), where n is greater than zero, moves us cliffward on a steadily-increasing slope.

    Part of the problem is that politicians are off the hook once they’re out of office. If we’re going to fix this problem systemically, we need to keep them on the hook for at least a couple of decades after they’re done serving. THEN we’ll see them take a significant interest in the long term.

    How to institute a systematic change like that? No idea.


  14. 14
    Robert says:

    Grace – Some kind of system of electrical shocks to legislators, tied to a debt index, might have potential. Oh, blah blah blah “cruel and unusual punishment” but it isn’t a consequence to a crime, so we should be able to torture them all we want.

  15. 15
    Grace Annam says:


    Some kind of system of electrical shocks

    I’m… unsettlingly comfortable with that.


  16. 16
    Robert says:

    I don’t want to be friends with anyone who can’t at least hypothetically entertain the notion of a system of electrical shocks for legislators.

  17. 17
    Ampersand says:

    The stimulus – too small as it was – worked. Or at least, that’s what most experts say and what most of the evidence shows.

    A panel of 40 leading economists deliberately chosen to be ideologically diverse (rather than left- or right-leaning) found that 80% thought the stimulus reduced unemployment, and virtually none thought it was harmful. Thirteen of fifteen peer-reviewed academic studies found that the stimulus reduced unemployment significantly. An entire series of CBO studies found the same thing.

    Or if you don’t want to read a bunch of wordy essays, just go here and look at the graphs.

    There are always, as Robert indicates, hard choices to be made in the budget. Lower taxes or more education? Infrastructure spending or debt reduction? Etc, etc.. Nothing will make that basic fact of life go away.

    However, those hard choices are much less hard during a time of high employment, as we saw during the Clinton era.

    In the long term, reducing unemployment and reducing debt are not contrary policies. But sustained long-term unemployment is probably not compatible with long-term reduced debt.

  18. 18
    Robert says:

    Spending money uses that money, which can “create” jobs, demand for goods, whatever you’re spending the money on. I don’t dispute that.

    But if the spending isn’t real, i.e., part of a baseline, then the demand for the goods or the jobs will go away when the spending goes away. Sure, the stimulus worked. Therefore, let’s borrow $2 trillion every year and keep doing it forever. We see the problem with that pretty quickly; it isn’t long at all, even with our near-zero interest rate, before the debt service on that borrowed stimulus money approaches and then passes the governmental revenue that comes from taxing the ‘new’ jobs and ‘new’ consumer spending, and then your next round of stimulus ends up being a net loser. No, we’re not quite to that point; no, we’re not miles and miles away from it either.

    I am not exactly sure of what your last sentence means or is intended to mean. If you’re saying that there’s no contradiction between a debt-free government and a long-term high rate of private-sector employment, I agree. If I remember econ class correctly, it is true that it is difficult-to-impossible to get to *full* employment without SOME governmental money-spewing. Full employment is nice, but isn’t the be-all-end-all. (Sustained close-to-full employment with no debt is a hell of a lot better.) There are times, especially when you have a healthy economy and a public fisc in great shape, where doing a little money-spewing pays off. But you’re supposed to pay back the spewed money in the next cycle or two. Continued spewing isn’t a workable strategy.

  19. 19
    Ampersand says:

    Sure, the stimulus worked. Therefore, let’s borrow $2 trillion every year and keep doing it forever.

    And yet, even though most of the stimulus spending is gone, the increased employment remains. It’s not a zero-sum system. Right now the main thing holding our economy back is decreased consumer demand, due to low wages and joblessness. The more employment goes up, the more consumer demand will increase, the more willing employers will be to hire, the more revenues the government has to spend without having to borrow. It’s a virtuous cycle, not a “oh well the money got spent now it’s like it was never spent at all” system.

    There are limits to this, obviously – eventually, when employment numbers are good enough, the law of diminished returns makes stimulus spending a bad deal. We are, however, nowhere near that point in the majority of states.

    For various reasons, 0% unemployment is both a bad idea and probably impossible in a free society. But we can and should shoot for something like 4%.

    (That is, unless it turns out that increasing use of machines has made a society without super-high unemployment impossible. In which case, I think we’d be morally obligated to become much more of a welfare state.)