Report: When It Comes To the Deficit, Washington is Still Acting Like It’s 2010

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Washington’s obsession with the nation’s budget deficit is a mistake, according to a new report released Wednesday by the liberal Center for American Progress (CAP). Congress and President Barack Obama are locked in a budget-cutting state of mind, still hoping to reach some sort of a grand bargain deficit reduction deal later this year that would replace the sweeping spending cuts that went into effect in March.

But as the report notes, the state of the economy has changed since 2010, the year that talks over how to reduce the deficit began:

  • The deficit has fallen by $2.5 trillion, due to tax increases and big spending cuts already enacted.
  • Growth in health care costs has slowed.
  • Inflation and interest rates are still low, despite concern that running a big deficit would increase them.
  • The key academic argument that high debt causes slower economic growth has fallen apart.
  • Austerity policies in Europe have not worked out so well.
  • The US economy has not come back to life as quickly as was projected when all the budget cutting began.

“Much has changed,” Michael Linden, the author of the CAP report, writes, “and the debate should change with it.”

Although the initial push for austerity came from the right, Obama and congressional Democrats soon fell in line. As Ezra Klein noted at Wonkblog Thursday, lower deficit forecasts didn’t change Rep. Paul Ryan’s (R-Wisc.) budget-cutting mania. “With some of the urgency gone, did Ryan ease up on the cuts to programs like Medicaid and food stamps?” Klein writes. “Of course not….The facts changed. The policies in the Republican budget didn’t.” As for Democrats, Klein says, “they’ve kept pursuing the exact kind of budget deals that led to sequestration in the first place.” Obama put forward a budget in April that, as Linden says, “goes well beyond halfway to meet the demands of conservatives in Congress.”

“It is time to reset the entire budget debate,” Linden says. “No more pretending that the sky is falling.”

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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