I’m no high finance guy. In fact, until a few years ago, my grasp of financial issues was tenuous at best, particularly in the macro-economic stew that is our current global economy.
One thing that I’ve always understood is the basic balance of input to output. Simply put, you output more than you input and you owe money, vise-versa and you’re saving. The hard task is translating that basic truth to the complicated world of economic policy. That’s one of the reasons I read the bondad blog for quite some time.
In the past couple of days there have been a lot of posts around the interwebs about the economic mess we find ourselves in. This quote sums it up pretty well for me:
The central problems started when the Republicans began their “supply-side revolution.”…Under Reagan’s tenure, total federal debt outstanding increased from a little over 30% of GDP to over 60% of GDP. While Bush inherited a surplus, he again increase total debt outstanding from about 57% to 64%. In short, we have Republican economic policy to thank for this problem at the national level.
The “economic credibility” that the Republican party has enjoyed in the conventional wisdom club that dominates the punditocracy has been laid bare. Destroyed by their disastrous “borrow and spend” policies, put in place in the 80’s, and now further marginalized by the new “socialized risk, privatized profit” scenario noted in brief here, and in more detail here and here, the notion of “supply side economics” seems even more akin to Geroge H.W. Bush’s characterization in the primary fight of 1980…voodoo economics.
After the 2002 elections, conservative Republicans held the White House, both branches of the U.S. Congress, the majority of Governorships, and the majority of state legislatures. Republican self-identification equaled Democratic self-identification for the first time in the history of public polling. Further, as wars were started, as unregulated trade agreements were passed into law, as tax breaks for the wealthy hit record levels, as executive power reached new heights, many Democrats actively helped to pass a new wave of conservative public and foreign policy.
The phrase many Democrats actively helped to pass a new wave of conservative public and foreign policy is both accurate and disturbing. Without the complicity of many Democrats in Congress during this time period, the agenda brought forth by this administration may have still gone into effect, but with far less ease.
The complicity of conservative Democrats in Congress over the past 20 odd years has strengthened the case of Republicans “fiscal discipline” to voters. The very people, middle class Americans, most likely to suffer at the hands Republican fiscal and foreign policy, shouldering the brunt of the responsibility, but little if any of the gains that have been borne out of the wholesale discounting of the dollar over the past 8 years.
It is this “coat tailing” of policy that has made it so difficult for Democrats to distinguish themselves from Republicans and show the true competitive advantage that Democratic policies give middle class Americans. It is this fear of distinguishing the differences and highlighting the truths of Republican “classist” foreign and economic policy that has sustained the conventional wisdom, and ultimately hurt Democratic positions on economic and foreign policy issues.
The truth of the matter is, the Republican Party is bankrupt. They are practically financially bankrupt from a fundraising perspective (except for the RNC), their fiscal policy is bankrupting both the nation and the populace, and their imaginary moral high ground has been lost to a symphony of corruption and extra-constitutional scandal. Now more than ever, it is critical that those Democrats who have gone out of their way to ride the coat tails, jump off before they are sucked down the drain.
With 10 more months of a Bush presidency, there is no telling what fiscal challenges our next President will face. The harsh reality is that there is little chance that any future president will be able to undo all that has been done, even in two terms, even with a full economic turnaround. But that undoing should be the centerpiece of the campaign.
Our financial world is full of uncertainty. By providing some level of certainty for the future, the job, once it becomes their job, will most certainly become easier. Further, by highlighting Democratic fiscal policy as the solution to the Republican created problem, there are many other issues that can be tackled with more ease.
It’s time we took control of our destiny, reject the failed policies of this, and past administrations, and differentiate the future we will provide from the multi-national fiefdoms that the Republican party wishes to sustain.