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Thomas F. Schaller: Crisis they created catches up with Republicans
December 16, 2012
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The most ironic part of the partisan fight over the “fiscal cliff” is that, if Republicans want Barack Obama to act according to Republican principles, they should encourage the president to do nothing and simply let the country – and the Republicans – go over the cliff on Jan. 1. Doing so would be bad for the economy. Many economists believe the coupling of massive spending cuts and simultaneous expiration of income, payroll, earned-income and alternative minimum tax breaks could plunge the economy into a recession. But why should Republicans care? They can blame President Obama and the Democrats. It’s a neat trick, if you pull it off.

The problem is that public opinion has finally caught up with the Republicans. A Washington Post/Pew Research Centre poll shows that Americans blame Republicans over Obama for the fiscal cliff by almost a 2 to 1 margin. According to the right-leaning Rasmussen Reports’ tracking of the generic congressional ballot, in the month since the 2012 election, Democrats have improved from dead even to an 11-point margin over the Republicans. Americans have realised that Republicans can’t be trusted on fiscal matters.

The 2010 tea party revolution began to pull back the curtain on the GOP’s fiscal legerdemain. House Republicans swept into power on what they wanted us to believe was some sort of organic, grass-roots citizen movement; of course, we later learned it was secretly financed by corporate bigwigs like the Koch brothers. Once tea party Republicans assumed power, the hostage-taking began, starting with Speaker John Boehner.

Armed with author Amity Shlaes’ “proof” that the New Deal’s Keynesian approach didn’t work (she’s wrong; it did), and despite their usual disdain for the policies of European governments, tea party Republicans championed austerity measures oddly similar to those being adopted, with no success, across the Atlantic. They screamed about the rise in federal spending, conveniently ignoring two facts. First, even if Obama’s budgets were the same size as his predecessor’s, spending as a percentage of GDP would still have risen because the economy shrank fully 4 per cent in the final 15 months of George Bush. Second, thanks to the Bush-era tax cuts and the severe economic retraction, by 2010 revenues as a share of GDP had reached a 60-year low – again, despite a shrinking GDP divisor, which would make revenues-per-GDP rise, all else equal.

The same party that helped blow open a giant hole in the budget was now posing as fiscal saviour. But then Speaker Boehner and the self-deluding House GOP decided to hold the full faith and credit of the US Treasury hostage unless Congress and President Obama caved to their austerity-mania. They continue to blame the Obama administration for debts.

Well, it’s now payback time for congressional Republicans. They own the phony 2011 debt ceiling crisis, and they own the fiscal cliff they demanded in exchange for ending that phony crisis. The GOP’s fiscal bill has finally come due.

MCT
 

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