Tuesday, August 2, 2011

A Clash of Philosophies

August 2 and soon a Senate vote will lift the ceiling. Throughout this surreal crisis, I’ve been presenting the simple facts and trying to say, directly or by quoting others, what the simple truth of the matter is: revenues fall short of expenditures.

That’s the technical expression of it. The more basic problem has been philosophical (as always). We’re engaged in a massive clash of cultures. One side views government as if it were something not only external to the collective but, in addition, something evil. The other still operates on the assumption that government is simply one aspect of the collective life. Neither side is able to muster the necessary and overwhelming majority required to carry out its agenda. As a consequence we’re forced to undergo surreal crises, one after the other. The by now traditional left (traditional because it reflects humanity’s long-term collective experience—namely that government is here to stay) cannot pass effectively legislation to match modern ways of governing populations by providing them basic human rights—such as effective health care. The reactionary right cannot shed its love-affair with global power which demands abnormal expenditures on the military. It does not have the real power to cut budgets. It must reach for indirect tools to create crises. The first to discover that separating revenue on the one hand and its complement, expenditures or outlays on the other can create massive deficits was President Reagan. He thought that that would work in due time to shrink government. But that didn’t work. Now we’ve progressed to the next stage—creating deficits but trying by law to prevent their funding by borrowing.

What the Right has managed to achieve is to stop revenues growing alongside expenditures. We are thus supposed to solve our problem by breathing out—but never breathing in. Doesn’t seem to work. The problem is that the collective includes government, and if government is supposed to die, the collective will also suffer.

Herewith some charts to make the point once again.

Note here that revenues and outlays nicely match each other (not perfectly but closely, from 1950 through 1981, Reagan’s first year in office. Thereafter the gap widens with a brief interruption during Clinton’s second term. Then deficits start growing as two events coincide—the war on terror and further drastic tax cuts under Bush. Next comes the mortgage meltdown, more war, and the very weak presidency of Barack Obama.

This chart shows the percent that deficits and surpluses represent of outlays. In this 62-year period, we only experienced eight years of surplus. In the first 25 years of this period, the deficit stayed below 10 percent of outlays in all but three years. In the 1980s and forward, the deficit bars dip lower except under one president, Clinton.

Evidently we will keep spending. But the Right’s view is that spending is only legitimate on military budgets. Militarism has killed just about every culture on record. To load that burden on the weakest elements of the collective—the children and the elderly—is not just surrealism. It’s crazy.

Data for the graphic are from the Office of Management and Budget here, Table 1.1.

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