The Post’s able blogger Greg Sargent has been pushing the idea of a “Beltway Deficit Feedback Loop.” The idea is that the Washington conversation makes everybody in the nation’s capital believe more fiercely by the day that the deficit is the most important problem facing the country, when out in the real world, Americans are worried primarily about jobs and growth.
There’s a new poll out that lends further support to this view. The latest Pew Research Center poll released on Tuesday – the survey was carried out between July 20 and July 24 – asked respondents which economic issue worried them most. The results: 39 percent said the job situation, 29 percent said the deficit, 15 percent said rising prices and 11 percent said problems in the financial and housing markets. Pew’s report noted that even among Republicans, 34 percent cited jobs while 37 percent cited the deficit.
But the poll pointed to another aspect of the deficit obsession that is insidious from the point of view of those who favor Keynesian or progressive economics. The new survey repeated a question posed last March in which respondents were asked whether they thought cuts in federal spending would help the job situation, hurt it or not have much effect. In March, only 18 percent said cuts would help the job situation while 34 percent said they would hurt. But in the July survey, 26 percent said cuts would help the job situation, up eight points, while 27 said they would hurt, down seven points. (The proportion saying the cuts wouldn’t make much difference was virtually unchanged: 41 percent said this in March, 39 percent said it in July.)
Overall, President Obama and the Democrats are winning the debt-ceiling debate as such. As Pew reported, 68 percent of Americans “say that lawmakers who share their views on this issue should compromise, even it means striking a deal they disagree with. Just 23% say lawmakers who share their views should stand by their principles, even if that leads to default.” That’s a margin of nearly 3 to 1. Pew noted that compromise was favored by 81 percent of Democrats, 69 percent of independents – a key number for Obama’s political advisers — and 53 percent of Republicans. The only group that favored risking default consisted of Republicans and Republican-leaning independents who said they agree with the Tea Party: 53 percent of them preferred lawmakers to stand by their principles even if it meant pushing the government into default. Just 24 percent of the non-Tea-Party Republicans and Republican leaners took this view. But the Tea Party still seems to be running the show in the House of Representatives at the moment.
The bad news for progressives lies in those numbers about spending cuts and jobs. Because the president and many Democrats have been complicit in making the deficit the centerpiece of the Washington conversation, they have left unanswered the Republican claim that cutting spending would help create jobs. That’s a view rejected even by economists who favor long-term deficit reduction. Yet Republicans and conservatives have clearly moved opinion toward the idea that spending cuts equal more jobs. It’s a case of political malpractice by progressive politicians, and another cost of that Beltway Deficit Feedback Loop.
Republicans not in thrall to the Tea Party understand the dangers posed by those big pro-compromise numbers. I have a feeling that Senate Republican leader Mitch McConnell may try to force a resolution to this fight even if many on the right wing of the House object. But those who favor progressive economics have a lot of work to do. And the president still has a lot of work to do on jobs.