Deficits and Politics

For those of you who are as irritated as I am by the smoke screens about deficits that are used to hinder economic reforms, Dean Baker named the problem again this week. Are "tax and spend" liberals in Congress causing deficits? Of course, Congress is causing deficits, but not in the ways that their critics claim.

Take the wars in Afghanistan and Iraq. The completely unnecessary war in Iraq has helped to build a trillion dollars into the deficit. Congress gave in and colluded with the Bush administration and the Project for the New American Century agenda to waste this money in the name of empire.

How about the housing bubble? Laissez-faire economic philosophies said that the banks, the mortgage industry, the credit default swap system, and all the "new economy" would be self-correcting and self-policing, leading to continued prosperity. I guess maybe they were deluded by their own self-serving greed. There goes another trillion dollars to the deficit thanks to the "talent" running the finance industry.

Baker gets it right, but thanks to bad reporting most people can only see the smoke screen.