C. Sawicky,
You wrote:
"The Dems have tried to use the issue of fiscal responsibility since 1982. The best it got them was Clinton."
In other words, their most politically effective president since FDR. You continue:
"Deficits help whomever the spending or tax cuts are received by. Whoever receives bond interest would have received returns to capital from some other asset if bonds were not available. So use of bonds cannot alter the distribution of wealth."
Not so. Spending helps whomever the money is spent on, not deficits. Spending based on borrowing instead of increased tax revenue helps the wealthy trade a tax bill for bond interest payments at the highest level of credit quality. How does that help working people? It would be one thing if the government was selling bonds to finance something profitable, thereby moving surplus value into the public sector, but they're not. They're simply subsidizing the capitalist system, publicizing the costs of capitalism, and paying bondholders for the privilege.
More than that, you haven't addressed the trust issue. If people see the government using Enron-grade accounting, it erodes public trust. In Washington state, for example, every citizen initiative put forward to cut taxes has passed (in a state that went strongly for Gore and has a strong Dem-party tradition) as well as every initiative to increase education expenditures. The citizens of the state of Washington simply don't believe it when Olympia says the state is out of money. I daresay the taxpayers here are not much different than the taxpayers in other states, they can just express themselves a little more clearly with the initiative process.
Finally, if the Dems aren't for responsible financing of government, the Republicans can keep going to the tax cut well and the Dems can't fight them. The 2000 election was the first one I know about where a proposed major tax cut gave the Republican candidate little traction. The Dems finally had an opening on the tax cut issue. However, instead of sticking to their guns, the Democrats just proposed a lesser "me too" tax cut, undercutting their credibility and winning zero anti-tax votes for their party. It was a stupid strategy that they're now repeating on the "stimulus" bill. They blast the republicans for slathering tax breaks on the wealthy corporations and shortchanging the unemployed, then vote for a bill that favors the wealthy 6 to 1 in benefits.
Nice work.
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