Hawks and Hypocrites

Hawks and Hypocrites


Paul Krugman: NY Times Op-Ed: 11/12/2012

http://www.nytimes.com/2012/11/12/opinion/krugman-hawks-and-hypocrites.html?partner=rssnyt&emc=rss

Back in 2010, self-styled deficit hawks -- better

described as deficit scolds -- took over much of our

political discourse. At a time of mass unemployment and

record-low borrowing costs, a time when economic theory

said we needed more, not less, deficit spending, the

scolds convinced most of our political class that

deficits rather than jobs should be our top economic

priority. And now that the election is over, they're

trying to pick up where they left off.







They should be told to go away.







It's not just the fact that the deficit scolds have



been wrong about everything so far. Recent events have



also demonstrated clearly what was already apparent to



careful observers: the deficit-scold movement was never



really about the deficit. Instead, it was about using



deficit fears to shred the social safety net. And



letting that happen wouldn't just be bad policy; it



would be a betrayal of the Americans who just



re-elected a health-reformer president and voted in



some of the most progressive senators ever.







About the hypocrisy of the hawks: as I said, it has



been evident for years. Consider the early-2011 award



for "fiscal responsibility" that three of the leading



deficit-scold organizations gave to none other than



Paul Ryan. Then as now, Mr. Ryan's alleged plans to



reduce the deficit were obvious flimflam, since he was



proposing huge tax cuts for the wealthy and



corporations while refusing to specify how these cuts



would be offset. But in the eyes of the deficit scolds,



his plan to dismantle Medicare and his savage cuts to



Medicaid apparently qualified him as a fiscal icon.







And how did the deficit scolds react when Mitt Romney



served up similar flimflam, with Mr. Ryan as his



running mate? Well, the Peter G. Peterson Foundation is



deficit-scold central; Peterson funding lies behind



much of the movement. Sure enough, David Walker, the



foundation's former C.E.O. and arguably the most



visible deficit scold in America, endorsed the



Romney/Ryan ticket.







And then there's the matter of the "fiscal cliff."







Contrary to the way it's often portrayed, the looming



prospect of spending cuts and tax increases isn't a



fiscal crisis. It is, instead, a political crisis



brought on by the G.O.P.'s attempt to take the economy



hostage. And just to be clear, the danger for next year



is not that the deficit will be too large but that it



will be too small, and hence plunge America back into recession.







Deficit scolds are having a hard time with this issue.



How can they warn us not to go over the fiscal cliff



without seeming to contradict their own rhetoric about



the evils of deficits?







This wouldn't be hard if they had been making a more



honest case on the budget: the truth is that deficits



are actually a good thing when the economy is deeply



depressed, so deficit reduction should wait until the



economy is stronger. As John Maynard Keynes said



three-quarters of a century ago, "The boom, not the



slump, is the right time for austerity." But since the



deficit scolds have in fact been demanding that we make



deficits the priority even when the economy is



depressed, they can't go there.







So what we get instead, for example in a white paper on



the fiscal cliff from the Committee for a Responsible



Federal Budget, is a garbled set of complaints: The



adjustment is too fast (why?), or it's the wrong kind



of deficit reduction, for reasons not made clear. Or



maybe they are made clear, after all. For even as it



rails against deficits, the white paper argues against



raising tax rates and even suggests cutting them.







So the deficit scolds, while posing as the nation's



noble fiscal defenders, have in practice shown



themselves both hypocritical and incoherent. They don't



deserve to have a central role in policy discussion;



they really don't even deserve a seat at the table. And



they certainly don't deserve to have one of their own



appointed as Treasury secretary.







I don't know how seriously to take the buzz about



appointing Erskine Bowles to replace Timothy Geithner.



But in case there's any reality to it, let's recall his



record. Mr. Bowles, like others in the deficit-scold



community, has indulged in scare tactics, warning of an



imminent fiscal crisis that keeps not coming.



Meanwhile, the report he co-wrote was supposed to be



focused on deficit reduction -- yet, true to form, it



called for lower rather than higher tax rates, and as a



"guiding principle" no less. Appointing him, or anyone



like him, would be both a bad idea and a slap in the



face to the people who returned President Obama to office.







Look, we should be having a serious discussion about



America's fiscal future. But a serious discussion is



exactly what we haven't been having these past couple



years -- because the discourse was hijacked by the wrong



people, with the wrong agenda. Let's show them the door.







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