Obama vs. the Fiscal Fear Mongers

[marmar]

from the American Prospect:



Obama vs. the Fiscal Fear Mongers

The far right has been manipulating the sensible center to conjure up an extreme "entitlement crisis." The next president needs to resist being swayed.

Robert Kuttner | August 19, 2008



If Barack Obama is elected president, he will inherit not just the most serious financial and economic crisis since the Great Depression. He will face an obstructionist orthodoxy about government spending that will make recovery even more difficult to achieve. The nature of our economic, social, and fiscal problems and the boundaries of the politically possible have been defined by conservatives who have often skillfully co-opted moderate liberals. Nowhere is this more the case than in the received wisdom that there is an "entitlement crisis" and that the federal budget needs to be balanced.

In a deepening recession, not only would Obama need to use deficit spending as short-term stimulus; he would need to dramatically expand public outlay to remedy 30 years of increasing inequality and the neglect of public systems. To achieve transition to Gore-scale renewable energy, he would need even more public funds. The implosion of the financial system, as a result of deregulation, will deepen recession unless offset by public investment. But if Obama buys into the myth that we can't even afford existing programs, audacity and hope will be lost before he even begins. Obama has already fallen into this trap once, accepting the mistaken premise that Social Security suffers from a mighty shortfall.

It will take great resolve to resist the supposedly high-minded--and well-funded--thinking that pervades Washington and the media. Peter G. Peterson, the onetime secretary of commerce under Richard Nixon and billionaire former partner of the Blackstone Group, has written four books over the past two decades bemoaning the cost of entitlements and forecasting disaster. Peterson recently endowed the Peter G. Peterson Foundation with a personal gift of $1 billion (about half his windfall from the sale of Blackstone) and hired as its founding president the government's former comptroller general, David Walker, a political independent with a facility for garnering good publicity with bad fiscal news. Walker in turn has influenced the thinking of foundation presidents and commentators.

"I would ask that if you leave here remembering only one number, let it be this one: $53 trillion," Peterson testified to the House Budget Committee last June. "Fifty-three trillion in today's dollars is what this country owes between our national debt, future liabilities, and our huge unfunded promises for programs like Social Security and Medicare," he continued, terming that number "unacceptable" and "un-American." .......(more)

The complete piece is at: http://www.prospect.org/cs/articles?article=obama_vs_the_fiscal_fear_mongers