This is No Time for Thinking Small or Pulling Back

And Obama, to his credit, has not done so thus far.  The Beltway pundits clearly want to hear that he’ll give up on health care, infrastructure investment and spending on alternative energy because of the downturn and growing deficit.   Obama has yet to abandon any of his central campaign planks in order to suck up to the Beltway pundits, even as he has called for reducing wasteful spending.  But Obama hasn’t taken on the flawed premise behind such reasoning as aggressively as he could.  I’d like to see that change.

History can serve as a guide.  Previous economic crises have led to major social reforms.  Our Social Security and modern welfare systems were borne during the Depression.  Britain set up its National Health Service in 1946, while it was still nearly bankrupt after WW2.  In the past, social reforms have, if anything, gained more steam when times were tough. The lesson: we should not shy from pursuing further reforms when people are most in need of them and most willing to accept them.  The case for progressive reform is greater now than anytime in recent memory.

Think about it.  Universal health care makes more sense today as strapped employers pull benefits back.  The drive to energy independence and a green jobs program is necessary not only to start creating jobs now but to put us on a more sustainable path for the future. Investing in our fraying infrastructure will keep us competitive while putting people back to work.  And a middle class tax cut makes sense to help people in need through this difficult time.  Obama should not only NOT agree to scale back his agenda, he should use the current crisis as an excuse to expand it.

We Democrats haven’t done this in the past because we have been cowed over the years by all the right-wing attacks on us as tax-and-spenders.  Times have changed though.  Reagan blew out the budget with supply-side tax cuts and a defence build up.  Clinton then balanced budgets only for Bush and Co. to pass more regressive tax cuts, start unncessary wars and spend without limit. So now the expectation will be for us mature Democrats to act “responsibly” and bring some “sanity” back to fiscal policy – all at the expense of our progressive agenda of course.

This debate will no doubt play out in the early days of an Obama Administration (which I pray we get to see).  It happened under Clinton.  Ultimately Clinton heeded the calls of deficit hawks like Lloyd Bentsen (his first Treasury Secretary) and Alan Greenspan to reduce spending – with the goal of getting interest rates down as a means of driving economic growth (of course Clinton and Bush’s dad raised taxes, particularly for the wealthiest, to achieve this end).  Clinton’s choice may have been the right call then (and of course that is somewhat debatable) but times have changed.  

The economic downturn we now face is likely to be more pronounced and fundamental than that of the early 1990s.  Competition from emerging economies (China and India) presents us with greater challenges (and opportunities) today then in recent memory.  Climate change is an unprecedented threat.  And the American health care system has continued to decline since Clinton’s failed effort at comprehensive reform.  All in all, Obama should be less (not un)concerned about the deficit in the near-to-medium terms and more concerned about getting America back on track for the long-term.  

If Obama wins, the right will no doubt use the next few years to caution against major new programs and reforms as expensive or unwise – conveniently finding the fiscal rectitude that so abandoned them during the last eight years.  But we should not let them drag us back from doing what needs doing.  After we’ve got universal health care, invested significant funds in infrastructure, moved towards energy independence and got the economy growing for everyone again should we make the deficit a top priority.  For now, and in the next few years though, we should do the big things that will ensure that the 21st century is another American century – as Obama so eloquently argues these days on the stump.  The times demand no less.

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