The mainstream media refuses to point out the obvious- the Republicans don’t really care about lowering the deficit. They are ideologically committed to two things, lowering taxes on the wealthy and eliminating government programs, particularly those that help those who need help the most. If they were really interested in lowering the deficit, they would tackle the most important problem facing the economy, unemployment. Because, as the chart below shows (red line=budget deficit as % of GDP; blue line=unemployment), since WWII there is a strong positive correlation between the deficit and unemployment. As unemployment goes up, so does the deficit. As employment goes up, the deficit goes down. The reasons are pretty obvious. To a large extent, the deficit is a function of government’s inability to collect tax revenue from people without jobs. If you put people back to work, the government gets more revenue and the deficit lowers. Government spending that helps people survive while unemployed, helps them train for new jobs, and provides jobs through stimulus spending, shrinks the deficit. As the chart makes clear, since Obama became President in 2008, unemployment has fallen and the deficit has shrunk.
So, although Obama’s policies have led to a slow lowering of unemployment and of the deficit, Republicans continue to argue that simply cutting government spending is guaranteed to lower the deficit and improve the economy. Again, there is plenty of empirical evidence that they are wrong. Consider the chart below. Subsequent to the 2008 crisis, David Cameron and the Conservatives have implemented an austerity program in the UK similar to what the Republicans advocate. As a result, they are in the midst of a double-dip recession while the Obama economy has been growing steadily.
We are going to hear a good deal of evidence-free ideology from Republicans over the next few months. It would be nice if the media would counter with some fact-based reporting.