Relief spending on the coronavirus crisis pushed the country into uncharted territory, Enzi warned. By next year, we will surpass even the debt burdens imposed by World War II, he added. Inflation will rise like a beast from the depths to devour household savings. The economy will collapse, and future generations will be ravaged.
“Our grandkids will find all their money has been spent, and all they can do is pay more taxes,” Enzi argued.
Rep. Ken Buck (R-Colo.) reiterated the message on C-SPAN Wednesday, calling the public debt “the greatest threat to our country right now.” Not COVID-19, not terrorism, not rising authoritarian political movements abroad. “It is our national debt that will take us down,” Buck said.
Both Buck and Enzi are following through on a rhetorical strategy Senate Majority Leader Mitch McConnell (R-Ky.) unveiled back in April when — after overseeing accelerating deficits throughout Donald Trump’s presidency — he suddenly cautioned that coronavirus relief must be limited out of “genuine concern” about the national debt. Conservative media are already attacking Joe Biden as a big-spending debt addict in thrall to the far left.
This is an old game, dishonest and unsophisticated. When Republicans have power, they cut taxes for wealthy people and spend like crazy on the military. (And banks and oil companies.) When Democrats are in power – or when proposals to help working people are on the legislative table – Republicans suddenly insist that adding to the national debt will bring a swift cataclysm.
In 2011, then-Rep. Paul Ryan (R-Wis.) insisted that America was on the cusp of a “debt crisis” that would “take down our economy” and “lower our living standards.” In 2012 he called the debt “the most predictable crisis in our country’s history.” In 2013, he said we were heading “straight into a debt crisis” that would “overwhelm our economy.” He was still talking about this in his 2018 farewell address to Congress.
Of course, the disaster never arrived – and not because debts or deficits diminished. The Trump tax cuts and right-wing spending priorities have indeed elevated the debts and deficits to record levels.
But Republicans don’t actually believe there is a debt crisis on the horizon. If they did, they wouldn’t govern the way they do. Presidents George W. Bush, Ronald Reagan, Richard Nixon and even Dwight D. Eisenhower ran up big debts, too. “Reagan proved deficits don’t matter,” Vice President Dick Cheney once said while trying to marshal support for the Bush tax cuts.
Deficits do matter in a sense, but not in the apocalyptic, over-the-cliff and straight-to-hell manner Republicans like to invoke when they’re feeling stingy. A high enough deficit under the right circumstances could theoretically bring about inflation. But inflation is not some mystical, unsolvable force. The government has all kinds of tools at its disposal to deal with inflation, from direct price controls to the interest rates set by the Federal Reserve to credit controls available to bank regulators.
And it’s important not to overstate the risk inflation poses. For the past 40 years, the debt has continued to rise, and inflation has continued to go nowhere. Since 2008, the official position of the Federal Reserve has been that a little more inflation would be good for the economy, but our central bank just can’t muster the power to make it happen.
So it would appear that Republicans don’t actually care about the debt. What they really seem to care about is ensuring that the people at the bottom of the economic ladder stay there.
This week, a key item in the government’s coronavirus rescue response expired. The vast majority of the $6 trillion-plus relief effort that Congress approved back in March was directed at the superrich, but lawmakers did authorize a $600-a-week bump in unemployment benefits. If you lost your job when the economy shut down, you weren’t totally screwed. The extra money helped you meet mortgage payments, pay utility bills and fund all the other expenses that you have, regardless of the country’s economic condition.
The trillions of dollars of relief Congress authorized for large corporations and their very rich investors were indefinite. But the benefit for everyone else was temporary. The short-term bump in unemployment ran out on Friday, and now Republicans are tying themselves in knots over how much they can get away with reducing the benefit should they extend it.
Republicans, of course, think the extra $600 a week is too generous. It’s more than what people need to pay the bills. But so what? The economy shrank by 33% last quarter, by far the largest plunge in recorded American economic history. Something has to fill that hole. A few household splurges would help the economy, not hurt it.
And the fact is that $600 a week in a pandemic is just not very generous, particularly given the severity of the situation. With infections increasing across the country, school reopenings in jeopardy and workers being re-furloughed, the economy is already backsliding. What happens when these payments stop? Well, people won’t pay their bills, and the people who rely on those bill payments will get into trouble and start laying people off. The economic condition of the country will deteriorate even further from its present abysmal condition.
Some Republicans are already making excuses. There’s just nothing the government can really do, they argue. Sen. Todd Young (R-Ind.) told The New York Times that there is no “Wizard of Oz” in Washington who can fix the economy. “Growth is created by innovators and entrepreneurs and rank-and-file workers, based on supply and demand,” he said.
An economist might ask where the “demand” in “supply and demand” is supposed to come from if people don’t have any money to spend. But, of course, that’s not really the point. What appears to matter is the preservation of a social order in which fancy people enjoy private luxuries and federal largesse while everyone else struggles to get by. Inequality is the point.
Zach Carter is the author of “The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes,” now available from Random House wherever books are sold.