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lune 5, 2013
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Budget Cuts during a Faltering Economy
A bad idea whose
time has come
by D onald K aul
T here's an alm o st biblical
irony to O klahom a's latest to r­
nado disaster. N ot a funny irony,
but the grim , tragic kind so co m ­
m on to acts o f G od.
F o u r m o n th s before this tw ister, five o f
O klahom a's seven m em bers o f C ongress —
including both o f its senators — all R ep u b li­
cans, had voted against a bill providing funds to
states hit by S uperstorm Sandy. T hey thought
that the m oney, $50 billion o f it, should com e
from cuts in oth er federal program s, not fresh
borrow ing.
N ow , with the O klahom a City suburb o f M oore
lying in ruin, not so m uch.
"T hat w as to tally d ifferen t," said Jam es
Inhofe, one o f the c h ief conservative blow hards
in the Senate. "They w ere getting things, for
instance, that w as (sic) supposed to be in N ew
J e r s e y . T h e y h a d th in g s in th e V irg in
Islands...E verybody w as getting in and ex p lo it­
ing the tragedy that took place. T hat w on't
happen in O klahom a."
R ight. Far be it from O klahom a to take advan­
tage o f federal m o n e y ...u n le ss, o f course it
co m es in the form o f subsidies for oil and gas
com panies o r huge farm s.
A s I indicated, not all o f the O klahom ans w ere
Sandy deniers. Rep. T o m C ole, for exam ple,
voted to support the re lie f bill and said, at the
time:
"Each m em b er ought to recognize at som e
point his o r h er area w ill be hit by som e
d isaster and they w ill be here seeking sup­
p o rt."
C ole, in an o th er ironic tw ist, happens to
live in M oore, the very nearly destroyed
tow n w here the tornado hit.
A n d yet, the w hole O k lah o m a delegation
d id n 't go all hypocritical o n us. T hat p illar o f
rectitude, Sen. T o m C o b u m , said that the d isas­
ter that befell his fellow O klah o m an s hadn't
ch an g ed his m ind about anything. (C obum ,
w ho voted against th e S uperstorm Sandy re lie f
bill in Jan u a ry , also insisted on offsets so that no
new m oney w ould be ap p ro p riated fo r the v ic­
tim s o f the 1995 bom bing o f the federal building
in O klahom a C ity.)
H e sent his spokesm an ou t to say that the
O k lah o m a R epublican co n tin u ed to stick to his
d em an d that re lie f funds be o ffset by cuts in the
budget elsew here.
"If the choice is betw een borrow ing and
re d u c in g s p e n d in g on la rg e sse ," C o b u rn 's
spokesm an said, "we should divert funds from
largesse to victim s."
W hich sounds fine, but w hat happens —
realistically — is that the funds get cut from
program s that benefit groups w ith w eak lobbies,
like kids and p o o r people. C orporate largesse
rem ains large.
B ut C o b u m 's underlying logic goes to the
heart o f the snake oil that R epublicans are sell­
ing the A m erican people these days — that the
w ay out o f a recession is to drastically cut
governm ent spending and shrink the deficit.
A s sensible as that sounds, there is little in
the historical reco rd to support the theory and
m ost m ainstream eco n o m ists lean m ore tow ard
the K eynesian m odel: increasing go v ernm ent
debt during econom ic d ow nturns to pum p up
d em and and pulling back only w hen things get
going again.
I f you're searching fo r an ex am p le o f w hat
bu d g et-cu ttin g does to a faltering econom y,
y ou need look no fu rth er than Europe. B ullied
into a po licy o f austerity by the strongest euro
zo n e m em ber, G erm any, the econom ies o f E u ­
rope are going, one by one, into the tank. A nd
the natives are now getting restless. Stim ulus,
rath er than the b itter pill o f austerity, is looking
g o o d to them .
A nd Japan's econom y, stagnant fo r the past
20 years, has show n signs o f reviving after its
new prim e m inister decided to adopt som e stim u­
lative policies, even though they w ere in flation­
ary.
Y ou w ill never co n v in ce the C o b u m s and
Inhofes o f the w orld o f that lesson, how ever.
A nd there are a lot o f them . W orse, they seem to
have co nvinced a good share o f the A m erican
people that w e can secure the future o f our
grandchildren by failing to educate them or
build roads, bridges, hospitals, and airfields for
them to inherit.
T here are few things m ore pow erful than a
bad idea w hose tim e has com e. T o d ay , that bad
idea is em bracing austerity to cure jo b lessness.
OtherWords columnist Donald Kaul lives in
Ann Arbor, Mich.