Here Come the Deficit Hawk Hypocrites

Mish

After greenlighting big spending bills under President Trump, expect an abrupt change in the attitudes of Congress.

Deficit Hawks Proudly Display Their Feathers

Now that Biden has won the election, Republicans are Ready to Become Deficit Hawks Again. 

GOP senators say they expect to refocus on curbing the nation's debt and reforming entitlement programs starting in 2021, as the Congressional Budget Office estimates that the debt has surpassed the size of the American economy.

"I think that's kind of getting back to our DNA. ... I think spending, entitlement reform, growth and the economy are all things that we're going to have to be focused on next year, and, yeah, I would expect you'll hear a lot more about that," said Sen. John Thune (S.D.), the No. 2 Senate Republican.

Sen. Lindsey Graham (R-S.C.) is poised to become the chairman of the Senate Budget Committee if Republicans maintain their majority. He said he wants to create a new commission to propose ways to reduce the deficit and address the country's debt.

"I think we've got to understand that we're going to be raising the debt ceiling in perpetuity if we don't find a way to bend the curve," Graham said.

Amusing or Pathetic?

Is this expected hypocrisy more amusing than it is pathetic or more pathetic than it is amusing? 

I am all in favor of fiscal responsibility and would even welcome a balanced budget amendment.

But here we are once again. 

Hawks or Turkeys?

I am sure Republicans will proudly show their feathers, but will they be the feathers of a hawk or the feathers of a turkey?

Hopefully you know the answer to that because it will play out the same way it always does.

What The Parties Will Seek

  1. Democrats will demand tax hikes. Since they won't control the Senate, they won't get them. 
  2. Democrats will then demand more money for anything and everything especially social programs.
  3. Democrats will call for budget cuts in defense spending.
  4. Republicans will seek more defense spending.
  5. Republicans will call for cuts in entitlements.

The Compromise

Drum roll please .........

The compromise will be the same one it always is. 

There will be no cuts in entitlements nor cuts in defense spending.

Instead, the Turkeys (on both sides of the aisle) will agree to more social spending in return for more military spending.

Mish

Comments (74)
QTPie
QTPie

Basic economic logic says government should act in a counter-cyclical manner vis-a-vie the economy. The Orange Man ran massive deficits during “the greatest economy ever”, going completely against any kind of macroeconomic sense.

PreCambrian
PreCambrian

If Republicans were really serious about deficits they would pass budget cuts instead of tax cuts. Tax cuts increase the deficit (no they haven't paid for themselves). I know that most people reading this blog are conservative leaning but at least Democrats are willing to tax to pay for their spending which is more fiscally responsible than cutting taxes to NOT pay for your spending.

Actually deficit spending to counteract cyclical declines does work but of course you need to have surpluses in the good years to pay for the deficits in the bad years. The US is not a growth engine anymore so we need to scale our sights back. There are many unproductive uses of the tax dollar both on the defense and social program sides and we need to get start acting like a country that is barely scraping by instead of one that has unlimited earnings saved for the future.

Sechel
Sechel

This was telegraphed weeks ago. Republicans want to make sure the economy stays weak and blame Biden. This is also why Shelton was being nominated for the Fed and why Manuchin demanded the Fed return Fed loan Funds. What ever you think about the programs , nominees and fiscal conservatism its enough to even make a cynic cringe. It's total b.s. Four years of Trump and Republican control showed that there is no Republican platform. It's just a power grab.

Sechel
Sechel

I serve on a board. Before we sign on we insist on adequate D&O coverage . We are also reminded of the business judgement rule. Who would serve on a board or run for office if there was real possibility of personal liability. I believe pardoning Nixon was the right call and I don't think Biden should use his office and spend four years going after Trump. That said there are many questions of what happened these past four years and a lot of opacity. We can't fix it if we don't know what happened. We do need the right kind of investigation so that even if we don't prosecute Trump and his administration we put ourselves in a position to fix the system. Now even if Biden's government doesn't prosecute Trump there are investigations at the Manhattan D.A. and NY A.G. that can and should continue. I also think Biden has it right, he should not weaponize the DOJ to go after Trump but if something is uncovered, legitimately and the A.G. makes a call that's fine. There was also pressure on the Obama administration to go after Trump. Panetta stepped in. Ultimately there were no prosecutions. That was the right call too.

DMC2018
DMC2018

Mish, Democrats will win the Senate. But it's funny to see how suddenly they care about deficit. 😂 This is a big joke. Now we see why nothing gets done to change the deficit. Interest rate will stay at zero.

Advancingtime
Advancingtime

To say the national deficit is out of control may be an understatement. Our surging deficit is a sign of "spending has gone wild." It appears everyone in Washington has come together and simply agreed on, "I will support your spending if you support mine!"
While both the Republicans and the Democrats mumble about being dissatisfied over the deficit, pork packed bills continued to be signed into law. Calling these spending packages "bipartisan" helps spread the blame around and masks just how dysfunctional Washington has become. More on the ballooning national debt in the article below. https://brucewilds.blogspot.com/2020/11/the-shocking-growth-in-americas.html

LawrenceBird
LawrenceBird

One of the many reasons I finally changed my registration four years ago. The entire elephant party are a bunch of hypocrits and have provent to be so time and time again on many issues, not just deficits.

Carl_R
Carl_R

This is exactly why I was ecstatic about the election results, which I never imagined were even possible. The best governments have been when we had a Democrat President, with Republicans having at least some control over Congress. The worst have been when either party had complete control.

When you have a split, a Republican President with a Democrat Congress doesn't work because the Republican President always pushes for tax cuts, and agrees to spending programs to get it, which is the worst of all possible worlds. When you have a Democrat President and a Republican Congress, the Republicans magically turn become fiscally prudent, and the Democrats don't want to be blamed for massive deficits for fear of even more Republican gains in Congress.

I'm looking forward to the next four years with optimism that we will see practical compromises, and nothing extreme being done, and gradual improvement on the deficit front.

Jackula
Jackula

Bretton Woods 2.0 may turn out to be a nothingburger or it may it up being the wakeup call for Washington RE deficits, we'll see

Eddie_T
Eddie_T

This is the sort of thing I was talking about when I said I expect the Fed and the Treasury to work more hand-in-glove in the new administration. I think the missing piece here that ZH fails to grasp, is that there will be more helicopter money. This will be required because COVID is about to reach new heights of devastation. No way ordinary people are going to get through it without more help.

Casual_Observer
Casual_Observer

My wife's hospital just shut down all non emergent surgeries again. Forget about the Republicans. They failed us.

Johnson1
Johnson1

In regards to the last post on TCS. People need to think why there is TCS. Lots of people bash Trump but 70 million people still voted for him. He hit a chord with many Americans and they are realizing that they are up against a stacked card deck regarding congress and realize they do not really have their best interest in mind. TCS, Brexit, Trumpsim, populism, antifa, BLM is the result of past administration throwing the main street under the bus. You have both sides (right and left) voicing their displeasure. Sometimes they do not realize it is the same thing they are fighting as both political parties are good at putting the blame on the other.

All the issues BLM protestors complain about did not suddenly happen under Trumps 3 years. Those issues where brewing for years. Travon Martin was under Obama watch. Why did he and Joe not make changes to prevent the meltdowns in 2019? One of my agreements with Trump in the debates. Joe....you have been there forever....why does it need fixed now. People always blame the president but what about those long term congress people that were there the whole time.

Who actually thinks TCS and antifi are going away now that Biden was elected. More gig jobs are not going to cut it. Free education that gets you a job driving a Uber when you graduate is not either. Lots of small midwestern cities that lost manufacturing jobs are still hurting.

I do have a suspicion if Antifa goes away, then it was probably a paid organization created for this election year. We will have to wait an see.

Webej
Webej

»» Is this expected hypocrisy more amusing than it is pathetic or more pathetic than it is amusing? ««

More pathetic than amusing. Definitely not amusing.

Mr. Purple
Mr. Purple

In other news, the Sun will rise in the east and set in the west.

Eddie_T
Eddie_T

Off-topic, but interesting....Remember how I predicted that after North Dakota instituted a mandatory mask order on November 14th, that we would see their neighbors in South Dakota (where the governor isn’t so sure about masks) continue to get hammered by COVID while North Dakota's numbers got better.

Nice experiment....at some point in early November their numbers were the same......both states have small rural populations of less than a million. Geographically similar, similar weather.....The main variable right now is mask wear.

Guess what? I was so right. And I predict I will be even more right before Christmas.

This ongoing experiment will also give us some insight into herd immunity, and probably sooner rather than later, since South Dakota is on a course to expose everyone in the state.

SD’s Governor Noem tweeted an important message on Thanksgiving.....she wants everybody to go shopping.

Greenmountain
Greenmountain

My biggest fear is that a Republican senate will be more of Mitch McConnell doing nothing - just say No. Congress has a role and it is time that it started acting like it - actually sitting in a room and negotiating with the other side - hopefully without the lobbyist. Most of the issues facing the country are not so complex - yes tradeoffs that make us all unhappy but you do once and the issue gets put aside for a few years - health care, infrastructure, entitlement programs.

Eddie_T
Eddie_T

"Instead, the Turkeys (on both sides of the aisle) will agree to more social spending in return for more military spending.”

I think that over time, we will see social spending trump military spending.....although I expect military spending to continue to command an outsize slice of budget pie.

My reasoning is that certain problems, like a medical insurance system that simply does not come close to working for a vast swathe of the public, will be seen as more important to address than a lack of billion-buck-bombers that we don’t need.....although those who profit from bombers have a great lobby......no doubt of that.

I also see rising support for a number of more dubious social endeavors.....aimed (one more time) at leveling the playing field for black and brown people.....really bad ideas like reparations...whch probably won’t be seen in the form of direct welfare payments.....but rather as a variety of ill-considered urban renewal pork barrel projects that will mostly allow insiders and local politicians to make bank.

Maybe some student loan forgiveness.....which I don’t support, for reasons I’ve listed before. Maybe some money thrown at free college, which is a better idea, but the devil is in the details....also likely to be conduit schemes for insiders.

More aid to states for Medicaid is likely. In some states enrollment in Medicaid is up double digits this year. The money has to come from somewhere to fund it.

One-armed Economist
One-armed Economist

It is endlessly disappointing that we can never cap defense spending. What is it now, more than the next 5 country's defense spending combined? Probably worse, whatever it is in equivalency to other countries it is over the top.

One-armed Economist
One-armed Economist

BTW, even with rates at rock bottom INTEREST - JUST INTEREST ON THE FEDERAL DEFICIT IS MORE THAN OUR DEFENSE SPENDING. Meaning our defense could be entirely covered by what we toss out the window for debt.

amigator
amigator

LOL C'mon Mish! And you believe them?

When it comes to spending there is really no difference Republican or Demicat money is just wasted on different stuff.

Any wagers what the national debt will be in 4 years. 32 Trillion plus stated. The real debt is probably 2-3 times that..... but what the heck who really cares anyway.

WHY ARE WE PAYING TAXES? Because we are a bunch of _____.

Just print it up!

On a different note why are we counting people that are not citizens in a census that determines the number of representatives ? Do you think the founding fathers would have ever thought that there would be the number of non-citizens in the Country? And that our government should include them in figuring representation?
I guess we will never know but I kind of doubt it. Hey but I could be wrong wouldn't be the first time.

Realist
Realist

The last President to run a surplus and lower the national debt was Bill Clinton, who lowered the debt from 47.8% of GDP to 31.4%, a drop of 16.4%. Trump is raising the debt by 15.2% "this year" and 36% in his four years, after inheriting an economy that was growing steadily for 6 years.

Jackula
Jackula

Lol! Until the markets start to tank! Then the "bazookas" will come out


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