My eager readers know that South Dakota's moocher-state ethos will come home to roost under sequestration, which could hit our state services and economy harder than any other state. My friends at the South Dakota Peace and Justice Center suggest that South Dakota under federal budget sequestration might look a lot like our Indian reservations.
Economist Mark Thoma says we need to get a grip... not so much on deficit spending, which can be really good for a dragging economy where recalcitrant banks hoard our wealth, as on the fleshy necks of grandstanding Republicans:
The fears of a sovereign debt promoted by those with other agendas are very much overblown. We have the economic resources we need to pay our bills, we’ve managed just fine with even higher debt burdens in the past, and as a last resort we can always print the money we need to meet our obligations. The real question is whether our politicians and political institutions are up to the task they face, particularly today’s Republican Party. Unfortunately, the answer suggested by the negotiations over the debt ceiling, the fiscal cliff, and the sequester is not encouraging.
If we have a crisis, the ability to pay our bills will not be the problem. It will be caused by politicians on the right gambling with the economy, and an inability to pull back from the brink of a self-inflicted crisis created in pursuit of political and ideological goals [Mark Thoma, "Our Real Worry Isn't the Debt, It's Our Politicians," The Fiscal Times, 2013.02.26].
Robert Reich agrees and says the only thing we have to fear are Republicans' two big lies:
The first big lie is austerity economics – the claim that the budget deficit is the nation’s biggest economic problem now, responsible for the anemic recovery.
Wrong. The problem is too few jobs, lousy wages, and slow growth. Cutting the budget deficit anytime soon makes the problem worse because it reduces overall demand. As a result, the economy will slow or fall into recession – which enlarges the deficit in proportion. You want proof? Look at what austerity economics has done to Europe.
The second big lie is trickle-down economics – the claim that we get more jobs and growth if corporations and the rich have more money because they’re the job creators, and job growth would be hurt if their taxes were hiked.
Wrong. The real job creators are the broad middle class and everyone who aspires to join it. Their purchases keep economy going.
As inequality continues to widen, and income and wealth become ever more concentrated at the top, the rest don’t have the purchasing power they need to boost the economy. That’s the underlying reason why the recovery continues to be so anemic [Robert Reich, "Why Obama Must Meet the Republican Lies Directly," blog, 2013.02.25].
I suppose we can take some comfort that Congress isn't dilly-dallying around with debates over abortion and guns in schools. But Congressional Republicans are still giving us smoke and mirrors over the policies we really need to juice the economy and spread the wealth.