Day By Day

Tuesday, August 02, 2011

The Broader Significance of the Debt-Limit Debate

Toby Young, writing in the Telegraph places the debt-limit deal in an Atlantic perspective:
Most pundits are crediting this U-turn to the political muscle of the Tea Party and it’s true that President Obama would never have agreed to this deal if the Tea Party Republicans in the House of Representatives hadn’t engaged in the brinkmanship of the past few weeks. But to focus on the Tea Party is to ignore the tectonic political shift that’s taken place, not just in America but across Europe. The majority of citizens in nearly all the world’s most developed countries simply aren’t prepared to tolerate the degree of borrowing required to sustain generous welfare programmes any longer.


For believers in redistributive taxation and egalitarian social programmes..., Obama was the last great hope. Here was a centre left politician capable of building the kind of electoral coalition that underpinned the massive expansions of state power in Britain and America, from Attlee’s post-war Labour Government to Lyndon Johnson’s Great Society. That is, a coalition of the white working class, minorities and middle class liberals. Yet in spite of sweeping to power in 2008 and ensuring the Democrats won in both the House and the Senate, Obama has proved unable to sustain that coalition. Last night’s debt deal represents the moment when he acknowledged that trying to maintain the levels of public spending required to fund ambitious welfare programmes is political suicide.


In both Britain and America, the Left has been reduced to hoping that cutting public spending on this scale will snuff out economic growth and plunge our respective economies back into recession. Not only will the Coalition be turfed out as a consequence, but if Obama can somehow blame the Tea Party for the “double dip” he might be able to persuade the people to grant him four more years. What the Left hasn’t grasped – and what Obama has – is that for the foreseeable future no political candidate or party will be able to increase public spending and win re-election. Socialist welfare programmes have become politically toxic. A sea change has taken place within the West’s most developed countries and last night’s debt deal is a reflection of that.
Read it here.

The death of socialism? I don't think so -- it is what underpins the emergence of modern elites on both sides of the Atlantic. They are immensely powerful and they will not relinquish their status and power easily. The fight for freedom has just begun. The debt-deal is a promising start, but it is not more than that.

Baby steps, baby steps.


Stephen Hayward is more optimistic than I am. He writes:
Perhaps this deal is in fact the political equivalent of President George H.W. Bush reversing his “read my lips: No. New. Taxes.” pledge in 1990, which contributed mightily to his subsequent loss on 1992.  And so we have the best of both worlds politically: a deal that leaves the Tea Party unsatisfied and therefore fired up for the next battles and election cycle, and a demoralized liberal base that can’t come to grips with the fact that socialism is over because we’ve run out of other people’s money...
Read it here.

The point about keeping the Tea Party energized is a good one, and the blatant mendacity of Democrat leaders like Senator Reid and President Obama, both of whom have in the wake of passage of the debt deal gone on record as interpreting it to require massive new spending, borrowing and taxation, makes it clear to anyone that the deal has been a sham.We've been played.

The rhetoric may have changed, but the underlying assumptions made by the political class have not. The public may have rejected tax and spend and borrow as a basis for government, but the elites have not and have armed themselves with non-democratic mechanisms like commissions, executive regulations, and judicial procedures that will enable them and their policies to evade the worst effects of popular scorn. Things may be changing, but at a glacial pace.

Baby steps are just baby steps. The great fight has just begun.

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