The GOP may still be reeling from the election and what it means for the future of the party, but that does not mean they're going down without a fight. Faced with the approach of end of the fiscal year, Republicans in the House are drawing a line in the sand over tax cuts for the wealthy and spending, in what can only be described as the new debt ceiling debacle.
In 2011, Republicans halted the progress of the government and forced a downgrade of the United States Credit rating in an unprecedented move by the House. The debacle was a failed strategy by the GOP to associate President Obama with big government spending in order to pin him with fiscal irresponsibility. This however, economists agree, is not the case. Not only is Obama's rate of spending is lower than and of the previous four presidents, but spending is not the giant issue its been made out to be. Similar to stressing over planning the Thanksgiving Day Parade in the middle of a Hurricane, focusing on spending in a recession is inappropriate and misguided. Once again history can inform the present. Modern economists agree that FDR did not spend enough to end the Great Depression until World War II. In other words, when the economy is down, spend. On top of this most basic of flaws is the fact that interest rates and inflation are low, and investor confidence is high; so high in fact that many investors actually pay the government to hold their money. It costs the US less to borrow a dollar than the value of the return on that dollar.
The focus on spending cuts reveals just how desperate the GOP is, considering the only presidents in the last 40 years to have balanced budgets have been Democrats; most recently, Clinton. The last Republican to preside over a balanced budget was Eisenhower, so they have no candidate to actually point to. While they may not realize it now, this strategy will ultimately blow up in their faces. What's more, there have only been 4 years since George W. Bush, whose rate of spending is the second highest since Reagan. Such blatant hypocrisy combined with the defense by House Republicans of the Bush Tax Cuts for the rich, have pushed people away because it suggests that the GOP isn't actually serious about the deficit, wanting only to cut the safety net and score political points. Given the realignment, this is an issue Republicans cannot afford to lose.
The Democrats scored sweeping victories in the Senate and Presidential races, but they failed to capture the House due in large part to Republican gerrymandering. That aside, this election illustrated a clear change in American political thinking. However, it seems as though the Democrats are blind to this paradigm shift as they too are discussing ways to reduce the deficit. If they plan on winning, they have to completely change the narrative: shift the focus from balancing the budget to addressing poverty, inequality, and unemployment through spending on public works and regulations. The point they should make is: balanced budgets are a luxury for times economic prosperity, not the cause.