As we go to press Tuesday, the U.S. Senate is poised to approve a deal that avoids the calamity of default by raising the nation's debt ceiling. But the legislation that President Barack Obama is expected to sign before the midnight deadline only adds to the dread we're feeling when it comes to America's economic outlook.
Everyone — right, left and in between — agrees that we have to get our national debt under control. We wonder, though, where the calls for fiscal austerity were when President George W. Bush rammed though tax cuts that mainly benefited the wealthy and then pushed this country into two unnecessary wars that were paid for using a credit card?
Now, with the nation still trying to recover from the Great Recession that erupted while Bush sat in the Oval Office, the far-right radicals of the Tea Party movement, using the threat of default as if it were a gun pointed at the president's head, has forced a deal that got them exactly what they wanted: plenty of hurtful spending cuts without any corresponding increases in revenue.
How is that any sort of compromise?
In addition to making cuts, there could have been bipartisan support for closing corporate tax loopholes and tearing down tax shelters that benefit companies such as General Electric, which earned $14.2 billion in profits last year but, as ABC News (along with many others) reported, "paid not a penny in taxes ... In fact, GE got a $3.2 billion tax benefit."
Why aren't the deficit hawks on the right screaming about that? The answer is simple: Because those same corporate powers are calling the shots. They are also doing their best to cloud public perception, and shift the focus of our attention.
In a piece posted on the web site Politico last week, Kenneth P. Vogel reported about efforts by the right to shape public opinion through "a sharply edged media campaign."
"While it's impossible to precisely measure ongoing ad buys, anecdotal information, combined with interviews of operatives, media buyers and trackers, suggest that avowedly conservative groups and candidates are spending between five and 10 times more than their liberal counterparts on TV and radio advertising related to the debate over debt ceiling negotiations," Vogel reported.
"Lapping the field in debt-related ad spending is Crossroads Grassroots Policy Strategies (or Crossroads GPS, for short), the nonprofit group conceived last year by Karl Rove, which is spending a total of $20 million in July and August on hard-hitting ads attacking Democrats on the debt, urging viewers to 'take away Obama's blank check,' and hitting a range of congressional Democrats it considers vulnerable for supporting 'skyrocketing' and 'crushing debt' and 'reckless spending.'"
Forget about the sickening irony that Rove, the guy affectionately nicknamed "Turd Blossom" by his former boss in the Oval Office, was a key Bush political power as the seeds for this disaster were being sown. And think, instead, about what it is our attention is being diverted from: job creation and economic growth.
Lee Fang, a researcher for the liberal nonprofit Think Progress, explained the problem in an online posting last week:
"For the entire year, as a sluggish economy sputters by and states continue to struggle with falling revenue, the conversation in Congress has centered solely on spending reduction. Earlier this year, we witnessed looming government-showdown duels between competing spending reduction plans. Now with the debt ceiling debate, the only two options are a choice between a package of painful cuts and a package of deeply draconian cuts. There has been no lively discussion of new policy ideas for job creation, foreclosure mitigation, or how to spur demand, the key driver of economic recovery."
As you ponder the consequences of the spending cuts that are at the heart of this damn "compromise," consider this item that appeared in The New York Times about a month ago:
"Close to $2 of every $10 that went into American's wallets last year were payments like jobless benefits, food stamps, Social Security and disability. ... In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government."
Instead of making sure life preservers are available as our economic ship struggles to stay afloat, conservatives are succeeding in blowing out the bottom of the boat.
Meanwhile, the voices of economic sanity are largely drowned out by the deficit-reduction din.
Nobel Prize-winning economist Paul Krugman has it right in his recent New York Times column about the debt deal:
"A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.
"For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America's long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status."