In his recent column and in his book (with James Kwak), White House Burning, Johnson tries to make the case that our current budget/debt crisis is the fault of Newt Gingrich, Grover Norquist, the Tea Party, and other "extreme Republicans," whose tactics of "fiscal confrontation" (that is, their stubborn refusal to raise taxes) are undermining the dollar and destabilizing the American economy and global markets.
Johnson conveniently ignores the fact that much of our current financial distress is the result of actions taken by well-meaning, but economically naive Democratic Presidents and Congresses decades ago. Medicare and Social Security, the two entitlement programs that threaten to blow up government finances in the near future, are essentially creations of the Democratic Party. Social Security was given to us in 1935 by FDR and the 77th Congress, in which Democrats outnumbered Republicans in the Senate 69 to 25 and in the House 322 to 103. Medicare was given to us by LBJ and the 89th Congress, in which Democrats outnumbered Republicans 68 to 32 in the Senate and 295 to 140 in the House. And now there is Obamacare, once again passed by a Democratic President and Congress, and destined to become yet another expansive entitlement program that -- pace the scores from the OMB -- will end up imposing enormous new costs on American tax payers and businesses. To blame our current economic problems on one former Speaker, a lobbyist, and the-catchall-for-all-left-wing-accusations, the Tea Party, while ignoring the massive state entitlement programs created by Democratic Presidents and Democratic majorities in Congress is simply dishonest.
The finances of the Federal Government are in a shambles today not because taxes are too low, but because programs introduced by Democrats are causing Federal spending to rocket out of control. It is this spending and the borrowing required to finance it, and not a bunch of stubborn Republicans refusing to raise the debt ceiling, that threatens to plunge America into extreme financial volatility in the not too distant future. In fact, just about our only hope is that Republicans will take a page out of Ms Merkel's playbook, continue their intransigence, and use the leverage they have to get real reductions in spending and to restore order to our fiscal house.
In the meantime, people like Mr Johnson will continue to try to persuade you that, oh, you had better watch out; all this stubborn, nutso, Tea Party resistance is going ruin America; much better to raise taxes to avoid all these nasty consquences; yes, if we don't raise taxes, the White House will burn again!
The wonderful thing about Grover Norquist is that he is completely unpersuaded by such dishonest pleading. He will listen to all the arguments of the MIT professor and still refuse to raise taxes. He recognizes that America is already on the road to financial perdition as a result of decades of Democratic tax/spend/borrow policies and that our only salvation is to reject these policies and dismantle the entitlement state. The sooner we get down to the business of doing that, the better off we will all be.
Yes, our only hope is if Angela and Grover hold their ground and the American electorate starts to see through the masks of people like Professor Johnson.
