There is no fucking spending problem

By Michael J.W. Stickings

Appearing on Fox News today, House Minority Leader Nancy Pelosi said the following:

It is almost a false argument to say we have a spending problem. We have a budget deficit problem that we have to address.

She's almost right.

It's an entirely false argument to say the U.S. has a spending problem, and to the extent there's a deficit problem it's a problem of revenue, specifically not enough of it, not expenditures.

But if you really do want to cut spending, the place to look is defense, where a bloated military sucks up an extraordinary amount of the overall budget. It isn't discretionary spending, which is government spending in a whole range of areas, which is at an historic low thanks in large part to recent cuts that President Obama himself supported alongside Republicans and a good number of Democrats.

As Krugman wrote on Thursday in response to John Boehner's typically Republican remark that "[a]t some point, Washington has to deal with its spending problem" (and that it's been kicking the can down the road for far too long), a view that is Beltway orthodoxy and repeated ad nauseam by the geniuses who make and shape opinion in Washington:

Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.

But that's a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we're in, it would be irresponsible and destructive not to kick that can down the road. 

*****

But aren't we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there's a long-term fiscal problem, but it's not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders. 

And the problem is, those Beltway insiders think that the only way to resolve this made-up crisis is to address the mythical spending problem -- and to slash spending on programs that help those who need help the most while leaving the very wealthy without having to make any significant sacrifices at all.

Look at defense, by all means, streamlining the military for the 21st century, but if you really want to deal with the longer-term fiscal situation, how about closing tax loopholes that benefit the individual and corporate elite and setting tax rates at levels that are fair across the board, requiring the Mitt Romneys of the world to pay their fair share and ensuring that there is sustainable revenue going forward?

Because -- let us repeat -- there is no fucking spending problem. Period. Except insofar as there's not enough of it, what with Republicans trying to bleed the government out of existence.