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Cliff Walking

from Peter Radford

This is really irksome.

For most of this phony war, as the key players strut their stuff for public eyes but not for serious negotiation, the Republicans have been oddly coy about what their plan would be. They released no details, gave no hints, and merely repeated their continuing objection to the horror of a tax rate increase for the wealthy.

As a result no one, including most Republicans, had a clue about where the starting lines were being drawn in what was supposed to be a fairly short and intense negotiation. For those of us familiar with Obama’s history, particularly that from 2009 and 2010, the GOP silence was easily explained: he has a tendency to do all the negotiation with himself. Thus his starting position is already heavily leaning towards a Republican viewpoint, which makes him vulnerable to being bullied even further. This is why so much of the early legislation of the Obama administration was so lame from a left of center perspective.  

Apparently, somewhere along the road since then, Obama has been given a copy of basic negotiation handbook. So, while he is still prone to being far too centrist from the beginning of a debate, at least the total give-aways are now being avoided.

This flummoxed the Republicans and produced a great deal of confusion: they had to put something in writing.

That they have now done. And it’s rubbish.

This was predictable. The entire discussion about our so-called Federal deficit and debt crises hinges on the hope that the public don’t realize that there is no crisis. After all panic and doomsaying become a tad vacuous in the absence of anything to panic or predict doom about.

I have said this a myriad times – I too am allowed hyperbole in these circumstances – there is no crisis. None. This talk of a fiscal cliff is simply a neat trick cooked up by the right to force a discussion about entitlement cuts. Such a discussion is not needed and would not be happening without the neat trickery.

That Obama continues to play along with the right in their long term attempts to eviscerate our safety net is a tragedy. True leadership right now would not simply be to stiffen your spine and resist the Republican attacks before coming to some compromise. It would be to sing to the rafters that the entire debate is hollow. It is an outcome of a long playing and persistent attack on the poor, the elderly, the sick, and the very young by the hardcore of our ever more rightward right wing.

Our so-called deficit problem stems exactly from the defunding of government undertaken by the Republicans. The centerpiece of that defunding, as we all know, was the Bush tax cutting program. The first swathe of cuts, in 2001, was designed to eliminate the then surplus running on the Federal government’s books. The second swathe, in 2003, was positioned as a quasi-Keynesian stimulus. The first swathe was a stunning success. It certainly eliminated the Federal surplus. The second swathe was an abysmal failure. It failed to provide any substantial stimulus. The economy continued its rotten ways in the aftermath of 2003, meaning that the promised uptick in revenues provided by faster growth never arrived.

So we entered the crisis of 2008/2009 without any ammunition courtesy of Bush’s extraordinarily negligent fiscal policies.

From the nation’s point of view Bush was an unmitigated failure. From the hardcore right’s perspective he was a hero, albeit unsung because of his toxic public image. He had successfully, if,like a lot of his actions, unwittingly, accomplished the longed for defunding of government.

From then on it became an easy sell to a gullible media that we had some sort of national budgetary crisis and that we could no longer afford all those expensive entitlement programs. They had to be slashed. Such pronouncements of the need for cuts were always accompanied by a suitable amount of regret to indicate that no one actually wanted to cut anything, it was that we had to in order to be responsible. Apparently – and I need to mention this – we were all supposed not to notice that the right assumed we could continue, nay augment, our defense spending. We can afford to pay for generals and their toys. Just not for schools. That the homeland being defended by all those glittery hi-tech weapons is both ignorant and hollowed out never entered the discussion.

Toss in a few frightening articles about the upcoming tsunami of baby-boomer retirements and the stage was set for a right wing victory and the long hoped for roll back of the welfare state.

The fiscal cliff, and all the discussions surrounding it, is simply a veil covering this attack on entitlements. The Republicans have never, ever, been interested in the deficit or the debt. Except where those things are useful in undermining centrist and left wing objections to entitlement reform. This explains all the extraordinary flip flopping the Republicans have done on the deficit throughout the years. It was Reagan’s henchman who barked out that “deficits don’t matter” not a crazy leftist. Reagan and Bush remain the only two American presidents to add to the deficit without a war or economic cause. And all the current leadership of the Congressional Republicans supported Bush’s multiplication of our debt back in 2001 and 2003.

That they all plead fiscal rectitude now is both a hypocritical and a sick joke.

That the Obama administration is complicit in the game being played is even worse.

There needs to be no change in Social Security. The tax code surely needs cleaning up, but that will be a long, arduous, and most likely lobbyist undermined project. Raising tax rates is more simple, clean, and resistant to tampering. Our defense spending needs to be cut to conform with a less imperial foreign policy. And health care spending needs to be controlled.

This is simple stuff.

Obama’s plan, which alters the fiscal balance by around $1.6 trillion, contains details that match fairly well to my list above ex, of course, any serious defense spending cuts. It actually has details, which is important to note. Because the much hyped Republican plan has no details. It is just a rehashing of the Ryan plan without any explicit reference to Medicare vouchers. It is full of hot air and vapor. It promises things such reform of tax deductions – which are alleged to provide an additional $800 million in revenues – without actually saying what those reforms are. And so it goes on. The Republican plan is no plan. It is a wish list. It’s only details are those aimed squarely at the elderly and poor. Medicare gets a revision of its age eligibility, and Social Security gets a change in its annual inflation indexing. Together these changes to the entitlement programs net about $300 million in cold hard cash. Those fixes for the tax code linger in the warm and fuzzy world of pipe dreams.

Given that the fiscal cliff isn’t a cliff, but a contrivance aimed at engendering a debate about entitlement reform, it ought not surprise us that the Republican budget plan isn’t a plan, but a proposal to reduce entitlements.

At least we could all be clear about that.

Then we could all get on with the task of defending those entitlements, and avoid unnecessary chatter about the dangers of walking too close to cliffs.

But that wouldn’t be centrist enough for our media. So the cliff walking continues.


All the evidence suggests that the Republicans will find it tough to keep a coherent negotiating position in place. Hence the vagueness of their supposed plan. It is already under attack from right wing groups. Some of those groups even acknowledge it as unacceptable. Of course, they don’t seem to offer up anything better. Then again with their anti-debt credentials being tattered and their anti-entitlement colors flying strongly it must be difficult to develop a plan that isn’t toxic to the electorate.

Still, it’s worth reading what they say. Here’s a quote from the Heritage Foundation, a hard right think tank:

“[T]he Republican counteroffer, to the extent it can be interpreted from the hazy details now available, is a dud. It is utterly unacceptable. It is bad policy, bad economics, and, if we may say so, highly questionable as a negotiating tactic.”


  1. Mike Meeropol
    December 6, 2012 at 12:15 pm

    I would argue that the real villain in all of this is Clinton (Bill, not Hillary). He came into office and after a brief failed effort to try a little stimulus to make the economy recover faster from the mild recession of 1990 (which saw unemployment rise in the first year of recovery — a first for post-war recoveries) he threw all his marbles into deficit reduction. He was lucky the reduction coincided with a decent recovery but in fact it was the DOT,COM bubble that created the alleged Clinton success of surpluses, rapid growth and a factual repudiation of the NAIRU nonsense.

    By touting his successes as stemming from (in part) “fiscal responsibility” he gave in completely to the anti-deficit hysteria .—

    [and all who celebrate the success of his reduction in the deficit have to contend with the inconvenient fact that REAL interest rates actually rose slightly between 1993 and 2000 — giving the lie to the idea that the reduction in deficits would bring down long term real interest rates thereby stimulating investment — the bubble “stimulated” investment — even a rise in real interest rates would have not stopped that.]

    (As a sidelight, I cannot help remarking that we were lucky that the Republicans went wild and tried to impeach him — because otherwise, his goal for the second term was “entitlement reform” in which he probably was poised to partially privatize social security.)

    Perhaps the biggest failing of our profession was the failure to push back hard against the anti-deficit hysteria that became a drumbeat when Democrats thought it was the only way to significantly criticize Reagan and his policies.

    THe good news that that many economists (and others) are waking up to how dangerous austerity is. But the most important actors will be ordinary people who demand that Obama keep a stiff spine.

    In some ways, going over the “fiscal speed bump” would be a good thing — it would begin cutting defense spending and get the estate tax back where it should be ….

    Part of me is hoping the Republicans end up being so stupid that Obama will not be able to indulge his “lawyer;s approach” and find no viable “compromise.”

    We can only hope …

  2. Bruce E. Woych
    December 7, 2012 at 2:47 am

    “The Peter G. Peterson Foundation is an American foundation established in 2008 by Peter G. Peterson, former U.S. Secretary of Commerce and co-founder of the Blackstone Group – an American-based financial-services company. With an endowment of US$1 billion, it focuses on raising public awareness about the need for fiscal sustainability related to federal deficits, entitlement programs, health care and tax policy and supporting the development of policy solutions to these challenges.”
    “In the cut of I.O.U.S.A. screened at the Sundance Film Festival in January 2008, the original designers from Agora Financial had audiotape of Nixon conspiring with his advisers to blame the decision to close the “gold window” on “speculators. ” After they sold the film to the Peterson Foundation, that story beat was edited out. The final cut of the film released in Aug. 22, 2008 blames rampant inflation in the 1970s on Arthur Burns, then chair of the Federal Reserve.[7]

    In February 2008, Walker announced that he would be resigning from his post as Comptroller General to become the president and CEO of the newly established The Peter G. Peterson Foundation, a position from which he could more freely draw attention to the serious issues the U.S. is facing.[8]”
    Institutional LOOTING: Private Equity and Think Tank Foundations
    (all tax free…investments in {their} asset seizing futures)
    News & Politics
    AlterNet / By Lynn Stuart Parramore
    The Obscenely Rich Men Bent on Shredding the Safety Net

    ….CEOs talk about shared sacrifice, but the only thing they want
    to share is your retirement money with their wealthy friends.
    December 3, 2012 |

    “New York magazine calls it a “Mass Movement for Millionaires.”
    The New York Times’ Paul Krugman sums up the idea :
    “Hey, sacrifice is for the little people.”

    The Campaign to Fix the Debt is a huge, and growing, coalition of powerful CEOs, politicians and policy makers on a mission to lower taxes for the rich and cut Social Security, Medicare and Medicaid under the cover of concern about the national debt. The group was spawned in July 2012 by Erskine Bowles and Alan Simpson, architects of a misguided deficit reduction scheme in Washington back in 2010. By now, the “fixers” have collected a war chest of $43 million. Private equity billionaire Peter G. Peterson, longtime enemy of the social safety net, is a major supporter.”


  3. Bruce E. Woych
    December 7, 2012 at 2:56 am
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