Ransom Paid By Robert Reich

Monday, August 1, 2011

Anyone who characterizes the deal between the President, Democratic,
and Republican leaders as a victory for the American people overpartisanship understands neither economics nor politics.
The deal does not raise taxes on America’s wealthy and most fortunate
— who are now taking home a larger share of total income and wealth,
and whose tax rates are already lower than they have been, in eighty
years. Yet it puts the nation’s most important safety nets and public
investments on the chopping block.
It also hobbles the capacity of the government to respond to the jobs
and growth crisis. Added to the cuts already underway by state and
local governments, the deal’s spending cuts increase the odds of a
double-dip recession. And the deal strengthens the political hand of
the radical right.
Yes, the deal is preferable to the unfolding economic catastrophe of a
default on the debt of the U.S. government. The outrage and the shame
is it has come to this choice.
More than a year ago, the President could have conditioned his
agreement to extend the Bush tax cuts beyond 2010 on Republicans’
agreement not to link a vote on the debt ceiling to the budget
deficit. But he did not.
Many months ago, when Republicans first demanded spending cuts and no
tax increases as a condition for raising the debt ceiling, the
President could have blown their cover. He could have shown the
American people why this demand had nothing to do with deficit
reduction but everything to do with the GOP’s ideological fixation on
shrinking the size of the government — thereby imperiling Medicare,
Social Security, education, infrastructure, and everything else
Americans depend on. But he did not.
And through it all the President could have explained to Americans
that the biggest economic challenge we face is restoring jobs and
wages and economic growth, that spending cuts in the next few years
will slow the economy even further, and therefore that the
Republicans’ demands threaten us all. Again, he did not.
The radical right has now won a huge tactical and strategic victory.
Democrats and the White House have proven they have little by way of
tactics or strategy.
By putting Medicare and Social Security on the block, they have made
it more difficult for Democrats in the upcoming 2012 election cycle to
blame Republicans for doing so.
By embracing deficit reduction as their apparent goal – claiming only
that they’d seek to do it differently than the GOP – Democrats and the
White House now seemingly agree with the GOP that the budget deficit
is the biggest obstacle to the nation’s future prosperity.
The budget deficit is not the biggest obstacle to our prosperity. Lack
of jobs and growth is. And the largest threat to our democracy is the
emergence of a radical right capable of getting most of the ransom it
demands.