In fact, Republicans are remarkably consistent on deficits

You’ve just got to use the right contingent rule.  For decades, Republicans have actually operated by a very simple rule.  Deficits are really, really bad when a Democrat is president and don’t really matter at all when a Republican is president.  The political benefits that accrue to Republicans from this “belief” are entirely coincidental.  Chait, with a thorough take:

During the Obama era, Democrats frequently believed, but only rarely uttered aloud in official forums, that the Republican Party was engaged in economic sabotage. Not a coldly conscious plot, exactly. But it seemed just a little too convenient that the party had reversed its fiscal ideology at precisely the time when doing so would damage Democrats and thereby smooth the GOP’s return to power.

Now that Republicans have reversed their position once again, also in a way that happens to redound to their political benefit, the answer seems a little more clear. Republicans have used their control of government to virtually double the budget deficit, which had been hovering around half a trillion dollars per year, and will now likely run well over $1 trillion — during the peak of an economic expansion. There is no economic rationale for this behavior. Their policy is simply to support fiscal contraction under Democratic presidents and fiscal expansion under Republican ones. Cynicism is the only basis to explain their behavior. [emphases mine]

Of course, this is also really, really bad economics:

Republicans are implementing fiscal stimulus on the largest scale since 2009. One could make the case (as Eric Levitz does) that, despite low unemployment, additional stimulus is still justified in order to heat up the labor market enough to produce really strong wage growth. I’m more persuaded by the need for stimulus when unemployment was above 6 percent, and that it’s no longer worth the additional debt. Alternatively, one could oppose stimulus now and also in 2009, if you seriously oppose it always. But supporting fiscal stimulus now with unemployment close to 4 percent while opposing it when unemployment was far higher is a position no economist in the world would justify.

And yet that literally-no-economist-supported stance is in fact the stance of the overwhelming majority of the Republican Party.

John Cassidy hits a similar note:

The Trump stimulus isn’t as big as the Obama stimulus of 2009 through 2011, which most Republican senators and congressmen vigorously opposed. That package, which consisted of a mix of spending and tax cuts, totalled about two per cent of G.D.P. each year. But, in February, 2009, when it was enacted, the economy was suffering through the deepest recession since the nineteen-thirties. The unemployment rate was 7.8 per cent, and G.D.P. was plummeting. If ever there was a textbook case of an economy crying out for a stimulus, that was it.

Today, by contrast, the economy is in the ninth year of an economic recovery that began in 2009. G.D.P. is growing at an annual rate of close to three per cent, and the unemployment rate stands at 4.1 per cent. Many economics textbooks say this is the sort of environment in which the government should be balancing its books, and perhaps even paying down debt, like a family salting away money for a rainy day. That’s what the Clinton Administration did during the late nineteen-nineties, when the national debt was much smaller than it is today.

The Republicans and Trump are embarked on the opposite course—confirming that the G.O.P.’s devotion to deficit reduction, which in 2011 prompted members of the Party to refuse to raise the debt ceiling, is purely cynical. Of course, we already knew this. The Reagan Administration and the George W. Bush Administration both raided the public purse to finance big tax cuts, and left the deficit much higher than they found it. The Trump Administration is merely following suit.

And more economic analysis in Wonkblog about just how stupid this is:

By running high deficits and adding to the deficit now, Congress reduces its flexibility to pass another stimulus package when the next recession inevitably arrives. Before the Great Recession, the deficit-to-GDP ratio was as low as 1.1 percent, giving the Bush and Obama administrations the room they needed to take measures to stave off an even-worse economic collapse. With this bill, the United States is going in the opposite direction — just as the economy shows signs of heating up…

he economy is, at worst, ordinary. The size of the spending bill isn’t. Former top Obama administration economist Jason Furman makes the same point. Furman is now a professor at Harvard Kennedy School and senior fellow at the Peterson Institute for International Economics.

“I think we should be very worried,” Furman said. “As a macroeconomic matter, I’m not aware of another example of this — of a country that’s basically at full employment embarking on massive fiscal stimulus.”

Our analysis shows that, in the course of recent U.S. history, he’s right. This level of government spending at this time is downright odd and straight-up unprecedented.

In a sane and rational world, Republicans would be punished for their incredibly stupid approach to economic policy.  Alas, we do not live in that world.  They are likely to be rewarded and far more likely to be punished for shark attacks.


Photo of the day

Really enjoyed watching the SpaceX launch the other day.  The coolest part, though, was not the launch, but the dual rocket landing.  So cool!  Here it is from an Atlantic gallery of the launch:

The two reusable Falcon 9 boosters return to Earth and land successfully, seen in this image from SpaceX video. 


Chart of the day

Open Secrets with a nice look at how campaign funding has changes since Citizens United.  Here’s the key chart:

And why it matters:

This shift in spending has been fostered by an equally important shift in sources for all of this money. A system founded on the principle of individuals giving limited, disclosed contributions directly to candidates, parties and PACs has morphed into a system that allows individuals and organizations to give hundreds of thousands, or even millions of dollars, to groups to spend in elections, some of whom are closely aligned with candidates and parties, without disclosure.

During the 2016 election cycle, the top 20 individual donors (whose contributions were disclosed) gave more than $500 million combined to political organizations. The 20 largest organizational donors also gave a total of more than $500 million, and more than $1 billion came from the top 40 donors.

At a time when Donald Trump and Bernie Sanders were confirming that large numbers of people donating small amounts could fund successful campaigns, the extraordinary role being played by the very few donors who give the most may be the most important element in this new era.

How it’s done

This lede in the NYT is how you get it right.  Ideally, it would be nice to see “claimed” in italics, but we need more of this:

Big government is officially back in style.

Republicans propelled themselves to power in Washington by promising an end to fiscal recklessness. They are now embracing the kind of free spending and budget deficits they once claimed to loathe. [emphasis mine]

Alas, I’ll again take issue with whomever is in charge of headlines, as their desire for succinctness missed this key point, “Republicans Learn to Love Deficit Spending They Once Loathed.”

Still, small victories.

Republicans and polarization

Discussed political polarization in my Political Parties class yesterday.  I really like this summary of things from friend/partisanship expert, Alexander Thedoridis:

But one particular feature of this polarization is especially important to understand heading into the next four years. In Asymmetric Politics, Matt Grossmann and David Hopkins show us that there are important qualitative differences between the two parties. The Democratic Party is best described as a collection of group interests and the Republican Party is unified by ideology. This finding may be either the cause of or the product of a phenomenon my research has shown in study after study. Over and over, Republican voters behave in more partisan ways than do their Democratic counterparts. They identify more strongly with their party. They show more bias in interpreting new information. They engage in more boosting of their party (and derogation of the other). And, they are more likely to select out of receiving messages from the other side. [emphasis mine]

I call this phenomenon of asymmetric polarization the Intensity Gap. This is a gap I believe has played an important role in President Obama’s administration and will likely be even more important heading into a Trump Administration. The heightened partisan intensity among Republicans both frees and constrains Republican leaders. It can mean that they suffer a penalty among their base for appearing to compromise with Democrats, and that the consequences of obstruction may be minimal. This all foretells ongoing gridlock and division.

So, how do we get out of this pattern?  Beats me.  Or what my students were able to come up with in group discussions.

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