Opinion | Politics

Mark Trahant: Congress continues a path to destructive course

Wednesday, March 6, 2013

There was an interesting economic debate Monday night on the Charlie Rose show.

Paul Krugman, columnist for the New York Times, made his case for Keynesian economics, the idea that in a recession all government spending is good (even what Krugman described as wasteful, Pentagon spending). He argued the longterm challenges of demographics can be dealt with later, even a few years from now. On the other hand, Joe Scarborough, a former Republican U.S. Representative from Florida and now host of MSNBC’s Morning Joe, argued that the country can do two things at once, cut longterm spending and grow the economy.

“I think a lot of us, other than Paul and the three people he was talking about, believe that we can do two things at once,” Scarborough said during the debate. "We can grow the economy in the short run, we can also do what's responsible for our children and for our grandchildren, which is be concerned about the long-term debt. That seems pretty damn rational to me.”

The problem and why that entire debate is misleading is because it leaves out Congress.

Krugman has said Congress can’t do both growth and austerity. Scarborough, in different words, agreed. “Here’s the problem, Washington can’t do either. If you look at the sequester and see how that happened, that train wreck ... but it doesn’t have to be either, or.” Scarborough said he’s telling “Washington politicians, you have no choice, you’ve got to grow the economy now and you also have to start planning ahead for what’s coming.”

There are merits and problems with both arguments. But it’s academic.

But there’s no support in Congress for the kind of spending that would grow jobs. The zeal to cut the budget has replaced common sense.

Yesterday House Republicans released a plan to “soften” the sequester. Does it help with impact aid? Well, no. Investing in young people? Not really. Protecting jobs? Sort of. The measure only gives the Pentagon flexibility. “It would shift about $10.4 billion into the Pentagon’s operations and maintenance account by cutting other defense accounts, including a $3.6 billion reduction in personnel funds, $2.5 billion less in research and development, and $4.2 billion less in equipment procurement,” reported The Hill newspaper. There is other priorities, the Republican budget also requires the U.S. Customs and Border Protection to retain current staffing and maintaining 34,000 detention beds (as well as money for U.S. consulate security).

But treaty obligations -- what should be the top congressional priority -- such as appropriate funding for Indian Health Service are missing from this budget proposal. (In terms of cost-effectiveness, I would move funding for border patrol way down the list of priorities.)

If you look at history, if you look at austerity efforts around the world, there is more than enough evidence that it doesn’t work. The sequester and the austerity that follows will make our economy (and our debt) worse, not better. Instead, government needs to do what it can to grow the economy, not just shrink it and hope for the best.

Krugman is not the only economist warning about austerity. Alan Binder, former vice chairman of the Federal Reserve and a Princeton economics professor, wrote in Politico that there is a longterm problem to be fixed. However, “in the very short run, meaning right now, we probably have too much deficit reduction. The U.S. economy could actually use some fiscal stimulus (to wit, larger deficits) today, rather than more fiscal contraction, because unemployment is still so high. Doesn’t that sound like Krugman?”

But unless Congress changes players, that’s not likely. It’s keen to continue its destructive course.

Mark Trahant is a writer, speaker and Twitter poet. He lives in Fort Hall, Idaho, and is a member of The Shoshone-Bannock Tribes. Join the discussion about austerity. A new Facebook page has been set up at: www.facebook.com/IndianCountryAusterity