America’s pantries are literally empty, but that’s not what the head of Joe Biden’s transition team, Ted Kaufman was referring to when he told the Wall Street Journal last week, “When we get in, the pantry is going to be bare.”
He went on to explain, “When you see what Trump’s done to the deficit…forget about Covid-19, all the deficits that he built with the incredible tax cuts. So we’re going to be limited.”
Kaufman is the latest example of someone who should know better, feeding the notion that household budgeting and government budgeting are the same. This is a zombie lie that must be put down once and for all.
Our spending is not limited by an artificial constraint on the supply of money. The limitation is instead the inflationary impacts of that spending. But we have seen in crisis after crisis the Federal Reserve use programs like quantitative easing to distribute trillions of dollars to corporations and Wall Street to keep their coffers full, with limited impact on inflation.
The problem with the pantry metaphor is not simply that it is factually inaccurate — it is designed to play on people’s lack of knowledge of how government financing works, causing them to fear public spending as inherently leading to some great calamity. The fact the deficit hawks have consistently resorted to using these cheap lies and fear speaks to the weakness of their arguments.
We are in a moment of economic crisis where Wall Street is doing incredibly well. The S&P 500, after a massive slide, is up over 6 percent in 2020. The wealthy are truly living in a different world from Americans who are struggling to put food on the table, with an unemployment rate still over 10 percent.
This week, former South Carolina governor Mark Sanford founded a new nonprofit, Americans for Debt and Deficit Reduction, using this apocalyptic rhetoric to describe the problem. The organization’s website states, “History says that debt and spending should matter because its pages show how consistently civilizations have extinguished themselves financially.”
Sanford reflected these same beliefs in a February op-ed in the New York Times writing, “What is accumulating is deadly: Bad finances kill countries. There is no bigger issue.”
At a moment when tens of millions of families will require help from the government to fill their pantries and medicine cabinets, Sanford is suggesting this is the moment to thrust our country into another age of austerity. This rhetoric is not only wrong, but if implemented, this policy would actually put people’s lives at risk.
Sanford’s pablum has been debunked multiple times, most notably in Stephanie Kelton’s The Deficit Myth, which should be required reading in every public policy class in America. If it was, perhaps we would not have to listen to those who hold the federal deficit as a problem we should put ahead of dealing with actual human needs.
But the truth is no politician believes the pantry is bare. When there are taxes to cut, foreign countries to bomb, or Wall Street banks to bailout, the federal coffers are full.
We need to fight for a future where instead of catering to warmongers and corporations, we make decisions based on the needs of the working-class majority. That means rejecting artificial constraints pushed by economists and policymakers when they can’t come up with a better argument against progressive action.
We cannot simply be satisfied with making policy arguments against austerity and the serial exaggerations of fiscal warriors. We need to wipe from our lexicon their ignorant metaphors that equate government financing with household financing. When they are wielded as part of our policy debate it should be met with pure derision.