The end of the New Deal as we know it?
So it seems that Obama is willing to play ball with Republicans on the debt-ceiling issue. Meaning cut Medicare and Social Security in exchange of an increase in the debt limit, increasing planned cuts for the next ten years from somewhere around two to closer to four trillion dollars. This was reported by the Washington Post, and seems to be in accordance with, not just Obama’s politics, but of the mainstream democrats since Carter and including Clinton, who notoriously ended welfare as we knew it.
It’s incredible that Obama would cave without putting a fight (he says that the WaPo story is overhyped apparently, but suggests that Social Security should be a means tested program!). This basically implies that the long fight that started with Reagan’s presidency to dismantle the basic achievements of the New Deal will finally succeed under a democratic presidency. But, on the other hand, it is part of the democratic move to the right, at least on economic issues, since Carter.
The graph shows the rate of growth of median income since 1948. The average rate of growth until 1979, before the Volcker shock, was 2.4 per cent. Since the Reagan administration it has been 0.5 per cent. That is the miracle of trickle down economics. And it is because the economic performance is so poor that fiscal problems have taken place. It is ironic that conservatives managed to sell the failure of their policies as the reason why those very same policies should be pursued.