The Upside Down 2012 Politics of the Economy and the Deficit

Doing the right thing for the wrong reasons.

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The politics surrounding the “super committee” and the economy generally have taken on a curious upside down quality recently.

[Check out political cartoons about the "super committee."]

This struck me in reading this analysis by the Atlantic’s Marc Ambinder on why Obama kept clear of the super committee’s inevitable and predictable stalemate. Ambinder writes:

Democrats have always been afraid of making the case that tax increases are necessary, but the politics have changed; jobs and economic recovery are the top priority. Deficit reduction is seen as the primary means to that end (whether it is or isn’t is a separate question), and Americans prefer a mix of cuts and tax increases to achieve it. 

So while Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., both put out statements on Monday castigating Democrats for their insistence on raising taxes, the White House will turn it around: Republicans were afraid to ask the wealthy to pay their fair share.

Unpack that first paragraph. Democrats are willing to break a cardinal rule of politics, that taxes are politically toxic. They are willing to do this in the context of breaking an accepted—if debatable—rule of political economics, that taxes are bad for job growth. Why? Because, flying in the face of traditional economic theory, voters have decided that the short term way to spur the economy is by reining in deficits.

Ummm. It’s just so crazy it might work?

Update: TPM's Brien Beutler has a report on the same thematic lines. "For at least the next several weeks, politics will undergo a strange transposition, during which Republicans will warn of the economic dangers of cutting government spending, and President Obama will barnstorm the country warning voters that Republicans are inviting a tax increase on the majority of Americans," he writes, noting the Democrats are going to fight to extend the payroll tax holiday while the GOP works furiously to repeal the budget deal defense spending cuts.

  • Vote now: Who is to blame for the super committee failure?
  • Read Peter Fenn on the super committee's failure reflecting a muppet Congress
  • Read the U.S. News debate on who, the U.S. or Europe, is handling their debt crisis better.