Big Government, Budget Deficits, Entitlements and the “Centrist” Ploy

These are words that come into prominence whenever the right-wing and business community go on the offensive. Big Government was not featured by the right-wing or business during the recent (2001-09) Bush years because although the federal government and budget were growing it was via an enlargement of the military and police budgets and an attack on the privacy and civil rights of ordinary citizens in the alleged interest of “national security.” In the Reagan years also the size of government grew, but this was not objectionable to the elite establishment because the growth was in military expenditures, with social budgets, organized labor, and environmental protections under attack. During George W. Bush’s term, there were a number of encroachments by the federal government on “state’s rights”; e.g., allowing the feds to override state authority on matters such as environmental rules (the EPA disallowed California’s attempt to limit auto tailpipe emissions in 2007) and medical practice (the Department of Justice sought the overturn of an Oregon law legalizing physician-assisted suicide in 2002 and later).

There were no Tea Party-like campaigns to protest this growth in government and attack on constitutional (and state’s) rights in the Bush years because the growing and encroaching government was in the right hands. It is only when it gets into the wrong hands and there is the threat that government will serve the undeserving poor, or even the middle class, and neglect the corporate community and National Security that business, the military-industrial complex (MIC), and right-wing protest cadres get agitated about Big Government. I refer back to my old definition of Conservatism: “An ideology whose central tenet is that The Government Is Too Big, except for the police and military establishment.”

This differential treatment naturally also applies to concern over budget deficits. Bush inherited a $230 billion budget surplus from Clinton, which he quickly turned into large deficits. But he did this by cutting taxes in a highly regressive way and generously servicing the MIC, so the business-financial-MIC communities were happy, and this fed into the Free Press keeping expressions of concern over budget deficits at a low key. With Obama, there has been a new surge of worry over budget deficits. Admittedly these deficits are large, but their large size results mainly from the effects of the severe recession and the inheritance of tax cuts and wars from the Bush years (although the wars continue and even expand under Obama). And they don’t really worry the financial community much, as evidenced by the very low rates of interest on government securities.

Reagan’s deficits almost tripled the national debt, but the outcries from the establishment were muted in light of his service, and there were no Tea Parties. The Congressional Budget Office estimated in 2004 that a continuation of Bush’s policies would triple the national debt by the end of fiscal 2013, with a ten trillion dollar increment, matching the performance of  “conservative” Ronald Reagan. But like Reagan he was an effective class warrior, hence the muting of deficit fears.

In a classic illustration of the double standard based on fear of positive Democratic responses to the needs of ordinary citizens and faith in Republican commitment to the business-financial elite, back in 1978, in the Carter years, former Citibank CEO Walter Wriston said that federal deficits were “diverting available capital from productive private investments to finance public expenditures. Only a reduction in the federal deficit would reverse this trend.” But with Reagan in office in 1988, Wriston said that we must distinguish between capital and operating budgets, and that the normal household does not treat its home as a current expense, so that we need not worry as  there is “near balance in the operating budget.” There had been no distinction between operating and capital budgets with Carter. The business-trustworthy Reagan could run deficits, Carter should not, and the rationalizations followed accordingly..

Obama, like Carter, or Clinton, is not trustworthy, even though, like his predecessor Democrats he leans over backwards to prove his reliability to the election-funding community and rejection of “populism” and any substantial action that meets the needs of his popular base. But this never suffices, as a Clinton or Obama will have to do something for their base beyond feeling their pain and vowing real action, however skimpy that something and promised action may be. With a George W. Bush or a Reagan in office the service to what Bush, speaking to an elite fund-raising audience of “Haves and Have Mores” that he only half-jokingly called “my base,” is more assured. So is the neglect of, and systematic attack on, the underlying population. Hence, the renewed focus on the threat of government deficits.

“Entitlement” is another word that has taken on negative connotations, suggesting claims that may be excessive and at the expense of hard-working tax-paying real Americans. Money for the varied components of the MIC is never referred to as an entitlement even though a very large part of it is wasteful, fraud-ridden, and pointless or even perverse in relation to any supposed “defense” function. It represents capture by a segment of the powerful — the real and important “special interests” — in the same fashion as does the TARP money that flowed so quickly and massively to the banksters who engineered the current economic crisis. But the phrase “national security” is a marvelous protective cover that rules out the use of a word with negative connotations like “entitlements.” Welfare mothers got entitlements, but not military contractors, fat-cat military officials, or bailed-out bankers.

The current prize entitlements demanding attention are Social Security, Medicare and Medicaid. Of course, the Social Security “entitlements” were paid for by those who are currently, or will be later, getting payments, but those surpluses were used by the political elites to fund ordinary expenses, including vast outlays for MIC weapons purchases and wars, not to build an infrastructure that would enhance future productivity and help provide the resources for entitlement payouts. But the main reason these social programs are entitlements is that they service the general citizenry, not just the elite, and in the evolving system of class war the elite targets such programs for cost savings to themselves (and profits to Wall Street with the hoped-for privatization of Social Security).

Another choice word linked to these politically loaded word usages is “centrist.” A centrist may be defined as one who recognizes and presses establishment perspectives on Big Government, Government Deficits and Entitlements. A centrist regularly supports de facto MIC entitlements, and any wars in hand or contemplated, but worries about the solvency of Social Security and the need to get it and the Medicare-Medicaid programs under sound fiscal management. Of course, the centrist will not support a single-payer health care financial program, or even a public option, because government is not a good manager and such proposals are not politically feasible. We must curb Big Government, but not at the expense of National Security. We must work hard on eliminating the Budget Deficit, but not by raising taxes — and the centrists uniformly supported the great Bush (regressive) tax cuts of 2001-3.

The mainstream media love centrists and constantly call on the Democrats to move toward the center in order to win elections (notoriously, after they have lost them) or to get legislation passed in a bipartisan fashion. The media did not press Bush to move to the center; presumably he had a “mandate” (from the Republican majority of the Supreme Court). Could it be that what Bush’s “base” wants is the “center” that the media also want? And that the “centrists” they love struggle to achieve those same Bush-base ends, fending off or just ignoring whatever the underlying population wants?

Obama recognizes this call and has behaved accordingly. One of his responses to the threat of Big Government, Deficits and Entitlements has been to support the establishment of a commission to study entitlements. Not the massive and nationally debilitating and unaffordable entitlements of the MIC, but those benefiting the underlying population. The class war goes on.

  • Originally published in the April issue of Z Magazine.
  • Edward S. Herman is an economist and media analyst with a specialty in corporate and regulatory issues as well as political economy and the media. Read other articles by Edward.

    8 comments on this article so far ...

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    1. Don Hawkins said on March 30th, 2010 at 10:18am #

      Edward to the point and I think I’ll have a cup of coffee now and watch the Weather Channel.

    2. Deadbeat said on March 30th, 2010 at 5:39pm #

      Another great article bu Edward S. Herman. However I would argue that Clinton didn’t balance the budget. He added the Social Security fund to the number to make it look like it was in balance. The social cost of Clinton cuts were tremendous.

      Clearly we are getting our asses kicked in the class war.

    3. bozh said on March 30th, 2010 at 6:14pm #

      Big govts, small govts makes little sense when we espy the fact that 2% of people own 98% of the country of which judiciary, WH, congress, media, army [private and regular being both private] cia, fbi, schooling, holliwood are integral parts of the country;thus the 2% own all the parts of it and the whole; probably to 100%.
      And people who own america, rule america. If u have hotels, u run hotels and how u run them is approved by people who own mines, railroads, shipping, industry, military industry, advertising, holliwood, media, agriculture, forestry, etc.
      The 2% run america. So, calling it big or small is not an issue; issue is they govern it. They get their way 100% of the time. The 98% of americans cld say that the govt is way too tiny or not governing for them more than 2%.

    4. Mulga Mumblebrain said on March 31st, 2010 at 12:20am #

      In reality class war is spiritual and pathopsychological war. The reason that the human world is a cruel and evil place, careering towards ecological collapse, characterised by almost indescribable brutality, rampant racism and xenophobia, growing inequality and literally limitless elite greed, is that those in control are evil and morally insane. Consult any list of the features of the psychopath,and compare them with the character of the leaders of the West in politics, business and the media, and you see a chilling congruence. The only essential difference is between the charming psychopaths like Obama and Blair, who hide their features behind a mask of amiability,and the arrogant,in your face type, like the Israeli ruling elites or Bush,or Cheney. Our predicament has been brought about by the steady,incremental, seizure of all power by the type that regards other people as enemies, that imagines itself superior to all others and that has no scruples in pursuing ruthless self-interest to the detriment of all others. As there is no hope, whatsoever,of more than a handful of this type ever miraculously growing a conscience, the coming social collapse will be met by greater and greater repression,as the elites throw the women and children overboard first, in a desperate attempt to save their own putrid skins. If you wish to see the true genocidal mentality of the elite at work, just think of Gaza,slowly being throttled,or Madeleine Albright, clearly declaring that the deaths of 500,000 Iraqi children under the brutal sanctions regime was a price that was ‘Worth it’.

    5. Don Hawkins said on April 1st, 2010 at 3:36am #

      I don’t think we’re yet evolved to the point where we’re clever enough to handle a complex a situation as climate change. We’re very active animals. We like to think: “Ah yes, this will be a good policy,” but it’s almost never that simple. Wars show this to be true. People are very certain they are fighting a just cause, but it doesn’t always work out like that. Lovelock

      I don’t think we’re yet evolved to the point where we’re clever enough to handle a complex a situation as climate change. Ah now the question comes up have we evolved to the point where we’re clever enough to handle a complex a situation as climate change just on the off chance the things we don’t see with our own eye’s are real? Did anybody read any reviews on that new movie The book of Eli. Last night on TV this one man said what the President has done is only a half a drill we need maybe four drills is that like a half a blink of an eye. I wonder will what we don’t see with our own eye’s return to normal oh sure we have tea party’s now and heck just all kind’s of stuff as we human’s are very clever indeed. Complex is it well maybe everything should be made as simple as possible but not simpler and do we do that sort of but we still use something called illusion of knowledge when doing it. Read the reviews interesting story line.

    6. Don Hawkins said on April 1st, 2010 at 5:25am #

      We sure are clever talk about evolved car sales are up and one reason is mass transit in our cities a few cut back’s that’s clever. The bull’s are in control now are you sure the system is kind of in control such a clever system. It appears the system makes a few people unable to cope so the system being oh so clever makes a pill. The system was invented by human’s but remember there are other systems law’s so to speak that were already here when we got here. What is the answer from the system so far on that one? Drill Drill Drill Drill ok. Just maybe this system is not as clever as we think. I don’t take those pill’s the system is my friend. Is the system telling us to keep digging I think so. Does the system like the truth the knowledge simple terms? Heck give it a try and see how it work’s.

    7. bozh said on April 1st, 2010 at 8:33am #

      The way out might be starting to plead with or mollify the devil or the devils!
      As i have already said s’mwhen-s’mwhere-s’mway-for s’mreason, we have tried gods for millennia and got nowhere.
      I recently changed my god, god xy7. After praying to devil xy7 and getting nowhere with her, i am choosing another devil.
      And if u see s’mthing good happening in a few days, u’d know my prayers to a new devil, the devil xy8 or xy9.1, are working! tnx

    8. stillshady45 said on April 2nd, 2010 at 12:22am #

      All economic units, from Continents to towns must on average export as much value as they import. This value can be in any form, including services, such as call centers in India. India is exporting a service, bringing value into India. A game like World of WarCraft brings huge sums of money into America from overseas. Although Blizzard is owned by a French company so I’m not sure if that money stays in the states. That does, however, show how while it is vital for an area to export something it does not have to be something tangible like a car. I used to think the opposite but your this article and this article changed my views