President Obama will lay out a budget blueprint on Monday that amounts to an election-year bet that a plan for higher taxes on the rich and more spending on popular programs like infrastructure and manufacturing will trump concerns over the deficit.Of course, polls show that the public wants exactly that. It's about jobs and it's about economic fairness.
The new budget proposal contrasts with the deficit-cutting promises that attended the budget rollout last year and the debates that followed. Figures released on Friday indicate that the White House foresees a slightly higher deficit in the current fiscal year than the $1.3 trillion deficit of the 2011 fiscal year, even after the budget battles that dominated Washington last year.Nobody but grifters in the finance industry cares about the deficit. And basic Keynesian economics says that deficit spending during a deep recession jump starts the economy and puts people to work, and that leads to a multiplier effect as more people and businesses have more money to spend and create more taxable income, and fewer people need government help.
The deficit is projected to fall to $901 billion in the fiscal year that starts in October, the first time since 2008 that the red ink would be below the $1 trillion mark. But last year, the White House had projected the 2013 deficit dropping further, to $768 billion.
Europe is lurching backward as its conservative governments attempt to strangle the Greek people in order to pay off banks, but a year after austerity fever ran rampant in Washington, and more than two years after Paul Krugman warned of the consequences, the Obama administration appears on the verge of making a clean break back to the Democratic Party's economic traditions. Traditions that just happened to dig us out of the Great Depression.