President-elect Obama declared his intention today to balance the Federal budget by reducing Medicare and Social Security payments. This is the fulfillment of a cherished Right-wing goal that has been in preparation since Reagan.
One alternative, of course, is to balance the budget by ending the war(s), slashing defense spending, restoring tax rates for the super-wealthy, and cutting subsidies to large corporations.
Another alternative is to say that we are in desperate danger of a depression, and any Keynesian will tell you this is no time to go balancing budgets.
Cutting entitlement and social service programs instead plays perfectly into the hands of the Right.
During Reagan’s administration, the Republicans promulgated huge budget deficits for the first time. This was completely out of character, since Conservatives since Barry Goldwater have always held balanced budgets and fiscal restraint as a central plank in the platform. Reagan wasn’t so dumb. His long-term strategy was to ‘starve the beast’. He would create deficits so huge that his Democratic successors would have no choice but to cut social services in the name of fiscal responsibility. It was Grover Norquist, appointed by Reagan to found his own astroturf organization ‘Americans for Tax Reform’, who talked about shrinking government until you could ‘drown it in the bathtub.’
Right on cue, Bill Clinton followed through the process that Reagan had initiated, slashing social spending by ‘ending welfare as we know it.’
And so we find ourselves in a cycle: Republican presidents create huge deficits with irresponsible tax breaks for the rich and bloody foreign wars. Then Democrats come into power facing huge deficits, and do the ‘responsible’ thing and balance the budget on the backs of the people who can least afford it.