Thursday, June 30, 2011

Proof: Republicans seek political advantage by keeping economy weak and unemployment high.

Suppose Republicans were really serious about deficit reduction, would they oppose their own ideas about how to bring that about? 

Suppose Democrats in budget negotiations agreed to a ratio of spending cuts to tax increases almost identical to the ratio Republicans had previously proposed, would it make sense for Republicans to walk out of negotiations? 

That is what happened and it proves that Republicans really don’t want a budget deal to raise the debt limit. Just as Democratic Senator Chuck Schumer and others have said and that we reported here:  There is every reason to suspect that Republicans want a second recession and high unemployment because they believe a bad economy will benefit them in the 2012 elections.

What’s the proof?  Let me begin with something Ezra Klein wrote recently:

A bit more information has trickled out over the last few days detailing the exact state of the budget negotiations when they collapsed. Both sides, as they often said, were shooting for about $2.4 trillion in deficit reduction over 10 years. They'd already agreed on around $1 trillion in spending cuts and were making good progress on the rest of it. But Democrats insisted that $400 billion -- so, 17 percent -- of the package be tax increases. And that's when Republicans walked.

So, the Democrats were proposing a budget deal that consisted of 83% spending cuts and 17% tax increases.  Republicans said NO on the spending cuts/tax increases ratio and walked.

Mike Konczal at Rortybomb asks a very interesting question.  What is the ideal conservative ratio between spending cuts and tax increase as part of deficit reduction?

Konczal took a look at the March, 2011 Joint Economic Committee (JEC) Republican report, Spend Less, Owe Less, Grow the Economy.   As he notes, the report is economic garbage spewed by the right-wing think tank American Enterprise Institute (AEI), but it spells out the Republican position on the proper balance between spending cuts and tax increases in deficit reduction.  So, what did they propose?  AEI said the best approach would be eighty-five percent spending cuts to fifteen percent tax increases. 

So, let’s see:

Republicans propose: 85% Spending Cuts to 15% Tax Increases

Democrats agree to: 83% Spending Cuts to 17% Tax Increases


Does that make sense?  In short, Democrats agreed to almost exactly what Republicans had proposed and it still was not enough to even keep them at the negotiating table.  Now, why would Republicans categorically reject what is essentially their own idea unless they didn’t really want to reach agreement? 

Think about it, if you are in negotiations with someone and you agree to give them just about everything they want and they still reject what you propose, then you can only come to the conclusion that they are not serious about reaching agreement.  They don’t really want a deal.  That’s the case with Republicans.  We can only conclude that they believe they will be better off in the 2012 elections if no agreement is reached, the debt ceiling isn’t raised, the country goes into default and the economy sinks into another recession.  In other words, the Republicans are willing to extend and expand economic suffering, simply for political advantage.  What other reason could they possibly have for rejecting their own ideas?

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