Monday, August 19, 2013

GOP Lies about the Deficit

(*Excerpted from Paul Krugman's post Moment of Truthiness)

In a well-known paper political scientists Christopher Achen and Larry Bartels reported on a 1996 survey that asked voters whether the budget deficit had increased or decreased under President Clinton. In fact, the deficit was down sharply, but a plurality of voters and a majority of Republicans believed that it had gone up.

In those 1996 data, Republicans were much more likely than Democrats to hold false views about the deficit, and the same must surely be true today.

Recently Hal Varian, the chief economist of Google, ran a consumer survey to ask whether the deficit has gone up or down since January 2010. And the results were even worse than in 1996: A majority of those who replied said the deficit has gone up, with more than 40 percent saying that it has gone up a lot. Only 12 percent answered correctly that it has gone down a lot.

Am I saying that voters are stupid? Not at all. People have lives, jobs, children to raise. They’re not going to sit down with Congressional Budget Office reports. Instead, they rely on what they hear from authority figures. The problem is that much of what they hear is misleading if not outright false.

Eric Cantor, the second-ranking Republican in the House, declared on Fox News that we have a “growing deficit,” while Senator Rand Paul told Bloomberg BusinessWeek that we’re running “a trillion-dollar deficit every year.” Do people like Mr. Cantor or Mr. Paul know that what they’re saying isn’t true?

People like Alan Simpson and Erskine Bowles, the co-chairmen of President Obama’s deficit commission, did a lot to feed public anxiety about the deficit when it was high. Their report was ominously titled “The Moment of Truth.” So have they changed their tune as the deficit has come down? No. So it’s no surprise that the narrative of runaway deficits remains, even though the budget reality has completely changed.

Republicans made a lot of political hay over a supposedly runaway deficit early in the Obama administration, and they have maintained the same rhetoric even as the deficit has plunged.

(* Editor's note: The GOP leaders are f*cking liars, plain and simple.)

Also from Paul Krugman:

The very same Republicans who claim that Social Security benefits should be cut because the chained-CPI overstates true inflation also insist that the Fed must stop quantitative easing, despite the absence of any visible inflation threat, because the real inflation rate is much higher than the official statistics indicate.

Maybe the Republicans don't know what they’re talking about. Or maybe what’s really happening is that the Republicans have a quantum-mechanics view of the situation: the state of the world in which the chained-CPI overstates inflation and the state in which it understates inflation co-exists in a condition of "superposition", and what happens when you collapse the wave function depends on the position of the observer --- that is, whether they're trying to slash Social Security or bash the Fed Chairman Ben Bernanke.

Or, on the other hand, maybe the Republicans really don’t know what they’re talking about.

Also from Paul Krugman:

Anti-Keynesian macroeconomics is a comfortable position, because it involves a return to notions of perfect markets and perfectly rational individuals; so the anti-Keynesians find it hard to leave that comfort zone, while even Keynesians sort of liked introducing a bit more rationality into their models.

But it’s also the usual left-right asymmetry. Keynesianism isn’t exactly left-wing, but monetarism was clearly conservative, and equilibrium business cycle theory even more so. And left and right in modern America are not mirror images. The right is purist, uncompromising, and ultimately not interested in contrary evidence; the left is much more open and empirical.

And the economics profession, it turns out, is not that different from the political sphere. This is an uncomfortable truth to acknowledge. Many economists would like to believe that we’re having a reasonable, civilized discussion, rather than dealing with denialism and bad faith.

Should be Paul Krugman's quote of the week:

The modern Republican party may be the party of deregulation and low taxes, but it’s also the party of social illiberalism. Someone like Rick Santorum firmly believes that the government has no right to tell business owners what they can do in the workplace, but has every right to tell ordinary citizens what they can do in the bedroom.

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