The GOP’s bogus fixation on the deficit

So, I made the mistake of watching failed Republican House Speaker Newt Gingrich and failed Republican CEO Carly Fiorina last night on Crossfire, and I was struck by how both of them were playing this cute “deficit reduction” game whereby we pretend that the biggest problem American families face today is the deficit.

Poppycock.

The biggest problem American families face today is paying their bills and saving for their future in a weak economy that was only made weaker by past and recent Republican hostage-taking.

Which brings us back to failed GOP Senate candidate Fiorina, who was once called the 19th worst CEO of all time.  Fiorina, who was fired as the CEO of HP, was sent packing with a $40 million severance package.  So it’s no wonder Fiorina isn’t terribly interested in the problems of the little people, and is more interested in cutting government.  Fiorina is happy to chop away at excess, so long as it’s not her own.

Carly Fiorina, failed Republican Senate candidate, and "19th worst CEO of all time."

Carly Fiorina, failed Republican Senate candidate, and “19th worst CEO of all time.”

Now back to Crossfire.  Fiorina had an interesting exchange with former Obama economist Austan Goolsbee, in which Fiorina tried to justify the Republican party’s obsession with cutting government spending by mal-splaining how the US’ credit rating got downgraded the last time the Republican party took the economy hostage.

Fiorina: The reality is that when our credit rating was dropped for the first time in our history, they weren’t just talking about a failure to meet a deadline, they were talking about an unsustainable debt to GDP ratio, and no observable progress in how that was ever gonna get solved, and that hasn’t changed.

A failure to meet a deadline? She’s talking about her own party’s threat to force the United States to default on the national debt and risk sending the entire world into a massive depression.  How cute of Fiorina to minimize the GOP’s hostage-taking of our economy by making it sound like you were late handing in a paper at school.

Here’s what S&P actually said at the time, via Politico:

A Standard & Poor’s director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default — a position put forth by some Republicans.

Without specifically mentioning Republicans, S&P; senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that “people in the political arena were even talking about a potential default,” Mukherji said.

“That a country even has such voices, albeit a minority, is something notable,” he added. “This kind of rhetoric is not common amongst AAA sovereigns.”

S&P did add something about the debt to GDP ration, but they did not say, as Fiorina alleged, that “they were talking about an unsustainable debt to GDP ratio.”  S&P wanted to see the debt to GDP ratio stabilize.  That’s different than saying the current level is unsustainable.

S&P’s Mukherji said the trajectory and amount of deficit savings factored into the downgrade decision, along with the slow response to the potential crisis by the nation’s leaders.

What S&P wanted to see from the deal was a stabilization in the debt-to-GDP ratio over time,” he said. “We wanted to see something other than a line that kept going up. That’s what we didn’t see.”

As for the amount of savings, Goolsbee has more on that from last night:

Carly Fiorina

Carly Fiorina

Goolsbee: If you look at Simpson-Bowles, if you look at Simpson-Bowles, we have actually as a country, partly through good fortune, that health care cost inflation has been lower than they predicted it would have been, partly from sequester, partly from new revenues, we’ve actually done almost three-quarters of the amount of deficit reduction that Simpson-Bowles said we needed to do. And the government spending and deficit levels are shrinking at the fastest they’ve shrunk in something like 70 years. So the question is why is it that you think the most important thing we should do right now is go figure out how to cut the deficit even farther. I think what we need to do is grow. We need to stop with this, this is crazy.

Good question.  The answer is the same one that explains why the Republicans shut down the government – they don’t particularly like government, so they do all they can to take an axe to it, whenever they can, and for whatever reason. If the GOP were actually so worried about deficits, they’d have spoken up when both Ronald Reagan and George W. Bush broke the bank, and they didn’t.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Instagram | Google+ | LinkedIn. John Aravosis is the Executive Editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown; and has worked in the US Senate, World Bank, Children's Defense Fund, the United Nations Development Programme, and as a stringer for the Economist. He is a frequent TV pundit, having appeared on the O'Reilly Factor, Hardball, World News Tonight, Nightline, AM Joy & Reliable Sources, among others. John lives in Washington, DC. .

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14 Responses to “The GOP’s bogus fixation on the deficit”

  1. Realist489 says:

    “Sooner or later we are all going to have to pay that bill.”

    Are we? I want you to think about this seriously. We have had debt for 100 years. It has NEVER been paid off. Our economy is still far and away biggest in the world.

    The Government does not handle debt the same way that Individuals do.

  2. karmanot says:

    next……flicks teabag

  3. Common Sense says:

    It’s nice to know that the fact that every man, woman and child in this country have a $60,000 debt dumped on them by the Federal Government. That’s $240,000 for a family of four! Sooner or later we are all going to have to pay that bill. Unfortunately, every generation keeps dumping it on their children.

  4. Irwin Tyler says:

    White House spokeswoman Amy Brundage said: “The president has said repeatedly that members of Congress don’t get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nation’s bills.” Actually, the President’s statement is disingenuous because the President and Senate Democrats don’t get to demand Obamacare ransom for fulfilling their basic responsibilities to pass a budget and pay the nation’s bills, against the overwhelming expression against Obamacare of the American people they are pledged to serve.

  5. TheAngryFag says:

    Yeah, we really need to take business advice from a CEO who got shitcanned from the largest PC maker in the nation.

  6. karmanot says:

    That works

  7. karmanot says:

    HP didn’t seem to learn from that one. Meg Whitman, another fail upward fraud is now running the company.

  8. karmanot says:

    There is great fortune to be made in catastrophizing ( new word) destruction.

  9. BeccaM says:

    Austerity measures serve the plutocrats and their interests. Hence the fetish for constant deficit cutting in an ongoing recession.

  10. Badgerite says:

    One of the recent Nobel Prize winners in economics, Robert Shiller has statements that are referenced at the Huffington post (www.huffingtonpost.com/2013/10/15/Shiller-income-inequality-problem_n_4100509.html ). He identifies income inequality both in the United States and worldwide as the greatest threat to economies that currently exists. So how does that square with the GOP current economic goal of destroying the middle class?

  11. ArthurH says:

    Fiorina is one of the things that are so miserably bad about the U.S. these days. As CEO of Hewlett-Packard she made one bad decision after another, cost thousands of loyal employees their jobs, and reduced the share value of company stock to a fraction of what it was. Yet the only way shareholders could get rid of her before she did more harm was to pay her to leave. Yet for some reason failed CEOs like her are given second, third and even fourth chances to work their negative magic instead of being relegated to a desert island where they can do no more harm. Goolsbee should have pointed out Fiorina’s sorry record and then said, “Would you take economic advise from her?”

  12. Badgerite says:

    So the trend in the debt-to-GDP ratio over time is exactly what S&P said they wanted to see. That is a stabilization and even a decline. And what the GOP is currently toying with could put the economy in such a tailspin that that trend would reverse and GDP would start to decline sharply.
    They are doing this because they are f-cking ideologues. Not because it is wise or good short or long term economic policy. I could have told the public in 2010, these people are not about jobs or saving the economy.

  13. nicho says:

    I beg your pardon. In the US today, there is no such thing as a “failed CEO.” Once you reach CEO status, there’s no possibility of failure, only moving on to another CEO position, after raking in tens of millions of dollars.

  14. lynchie says:

    In a couple of words…..she’s a turd

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