| From a macro-economic point of view, the most important way to think about the debt is as a percentage of GDP. Put simply: how big is the governments' debt compared to the size of the whole economy--the tax base available for paying the interest, and hopefully paying down the debt. And if we start off by thinking of it that way, then the record is strikingly clear: throughout the heyday of "big government," the size the debt shrank consistently--if not uniformly--under every post-WWII Administration, until Ronald Regan:
It's equally notable that the size of the debt shrank under Clinton as well, while rising under both Bushes. This is important for at least two immediate reasons:
(1) It shows that even with the incredibly foolish bailout package, our debt levels should remain managable, if the next President is sane (i.e. not a Republican). This doesn't mean we have no problems. It just means that this bailout, however odious, is not a crushing blow that destroys all hope.
(2) It reminds us of the basic argument we should have been making ever since 1984: so-called "conservative," supply-side, voo-doo economics does not work, and drives the government into needless levels of high debt. (As opposed to the WWII debt, which was quite necessary.) |
Point #1 echoes the point of a diary I wrote on Thursday, "Losing A Battle To Win The War? Robert Reich on The Bailout". Reich's article had two main points, as I read it. First is the clarifying distinction between two seemingly contradictory reactions:
An important distinction here. While more Americans are coming around to "supporting" the bailout bill, the vast majority still hate the idea of bailing out Wall Street. They're for the bailout bill now only because they fear that a failure to pass it will have worse consequences -- drying up credit at a time when Main Street is struggling. But make no mistake: America is mad as hell. They resent what they perceive as extortion by the Masters of the Universe.
His second point, less succinctly argued, was that there really is a realistic chance to continue the larger fight, with a different outcome in 2009. Just how that will play out, no one can say. But that it can play out, that is what is most significant. Reich concludes by saying:
The Era of Angry Populism has only just begun. Let's hope Obama wins, and is able to mobilize the anger into fierce pressure on Congress to get his agenda enacted, as well as reform Wall Street and Washington.
Point #2 should be obvious from this chart, but translating it into effective populist rhetoric for affirmative policy initiatives will take a good deal more working through. A key problem is that there's a fundamental shift between the logic of the individual actor and that of the larger economy. Indeed, learning this fact was a key aspect of the New Deal, and re-learning it must be vital for a progressive future.
Here's what I'm talking about. From Ronald Reagan onwards, conservatives loved to say things like, "You have to balance your budget, why shouldn't the government balance its budget, too?" Underlying this specific argument was a fundamental logic: whatever made sense at the individual level made the very same sense at the level of society, too.
Of course, when it came to actually balancing budgets, conservatives were the worst offenders ever, as the chart above clearly shows. But that didn't matter, because their narrative came to dominate the public discourse, along with the underlying logic that individual answers absolutely determined answers for all of society. For us to put progressive economic policy back into a dominant position, we need to replace that narrative--and related ones that depend on that same basic logic--with our own counter-narrative, and a radically different logic.
What could that possibly be? Oh, yeah:
Simple, eh? What "makes sense" for the rationally fearful individual--"grab my money, fast!"--spells doom for the whole community. It's a simple point, really, considering that millions of kids have watched this movie, and have not had any problem following it. We haven't done nearly as a good a job taking this simple truth, and building a more extended structure of narratives upon it. But it clearly can be done.
This is the challenge we face: taking this key demonstration of how individual fear-based logic must be transformed for the good of all, and rebuilding our economic narratives around it. There's a whole lot more we need to say as well, but it's mostly an elaboration on this same basic theme.
Building a sustainable green economy for future generations rests on the same fundmantal logic: what seems best from the fear-driven individual perspective is actually a recipe for collective destruction. It's a variation on the same bit of George Bailey's wisdom. And it very well may hold the key to all our future. |
