During the Obama era, Democrats frequently believed, but only rarely uttered aloud in official forums, that the Republican Party was engaged in economic sabotage. Not a coldly conscious plot, exactly. But it seemed just a little too convenient that the party had reversed its fiscal ideology at precisely the time when doing so would damage Democrats and thereby smooth the GOP’s return to power.
Now that Republicans have reversed their position once again, also in a way that happens to redound to their political benefit, the answer seems a little more clear. Republicans have used their control of government to virtually double the budget deficit, which had been hovering around half a trillion dollars per year, and will now likely run well over $1 trillion — during the peak of an economic expansion. There is no economic rationale for this behavior. Their policy is simply to support fiscal contraction under Democratic presidents and fiscal expansion under Republican ones. Cynicism is the only basis to explain their behavior.
During the Bush administration, the party followed Dick Cheney’s famous dictum, “Reagan proved deficits don’t matter,” as a basic guide. Republicans financed two large tax cuts, a Medicare prescription-drug benefit, two wars, and a large domestic-security hike entirely through higher borrowing.
Importantly, in addition to supporting permanent deficit increases, they also supported temporary deficit increases in order to ward off recessions. When the economy slowed in 2001, Republicans supported a Democratic plan to mail out short-term tax credits. Here, they were following the perfectly sound logic of Keynesian economics, which held that during a recession, the government should boost demand by temporarily increasing the deficit. Even committed right-wing ideologues like Grover Norquist and Paul Ryan supported fiscal stimulus explicitly on these grounds. (“I like my porridge hot,” said Ryan at one hearing, explaining why he agreed with the Keynesian arguments made by Republican economist Kevin Hassett that it was vital to inject demand into the economy as quickly as possible.)
When the economy entered another recession at the end of Bush’s second term, Republicans again overwhelmingly supported another temporary stimulus bill. In February of 2008, Congress voted, by margins of 380 to 24 and 81 to 16, to mail out flat checks to every American household in order to stimulate more spending. “This is the Senate at its finest, recognizing this was an opportunity to demonstrate to the public that we could come together, do something important for the country and do it quickly,” said a satisfied Mitch McConnell.
As it turned out, what looked like a mild recession at the beginning of 2008 developed into a global economic crisis of staggering size. By 2009, the economy was plunging into the deepest crisis since the Great Depression. But at that point, which also coincided with partisan control of the presidency changing hands, Republicans decided they no longer agreed with Keynesian economics. Or they believed the scale of the crisis somehow failed to justify the cost to the Treasury. So thoroughly and so rapidly did this conversion permeate the Republican Party that, by the time Obama took office, it was almost impossible to find a conservative of any sort who had a kind word for the stimulus. Even the most openminded conservatives seemed more concerned about deficits than the calamity of unemployment that could top double digits. “The issue is the risk the Democrats are taking, period, by spending enormous sums that aren’t obviously justified by the current crisis,” wrote Ross Douthat in February 2009.
Republicans whipped themselves into a frenzy over the debt, which threatened a “debt crisis,” even a Greece-style social upheaval. In 2011, Republicans cited this urgent fiscal threat to justify their extraordinary tactic of threatening to refuse to lift the debt ceiling, possibly triggering global economic calamity, in order to coerce Obama to adopt their policies. Obama mistakenly took the threat as an opportunity to enter into long-term fiscal policy negotiations. The end result of the fiasco was “sequestration”: caps on the discretionary portion of the federal budget. Obama assumed that, since the caps were designed to be painful rather than to identify tolerable savings, and since they squeezed defense spending in particular, Republicans would be willing to negotiate to lift them.
They weren’t, though. Republicans instead decided sequestration was wonderful, the crown jewel of their achievements since taking control of Congress. Sequestration made for bad government, and dragged down the economy, but since Obama didn’t like it, Republicans decided they wanted to keep it. Eventually, when defense cuts bothered them too much, they negotiated deals to slightly alleviate the caps year by year. But their insistence that lifting the caps be paid for by finding offsetting savings made it hard to negotiate much relief.