This extract comes from The Confiscation of Economic Prosperity. It serves as a reminder that this crazy demand for austerity should not come as a surprise.
Besides, the problem is not the size of the deficit but the policy changes that the right wing can engineer by stoking fears about the disaster that deficits can create. The idea is that with the government facing seemingly unmanageable deficits, the public will be stampeded into a wholesale slashing of government spending.
As a result, regulatory policies that inconvenience the corporate sector as well as social programs that might benefit ordinary people will disappear. The right wing gleefully refers to this situation as the starve-the-beast strategy -- by depriving the government of adequate revenue, its regulatory powers will necessarily shrink.
Traditionally, Republicans represented themselves as the party of fiscal sobriety, insisting that balanced budgets were essential to solid economic performance. In the 1980s, a new strategy began to emerge. Conservatives began to welcome huge deficits.
For example, in 2001, President George W. Bush expressed his support for this tactic, reporting that the government's fast-dwindling surplus (created by his own tax cuts) was "incredibly positive news" because it will create "a fiscal straitjacket for Congress" (Sanger 2001). Similarly, California Governor Arnold Schwarzenegger said that he wanted to use his budget plan to "starve the public sector" without raising taxes, "because we don't want to feed the monster" (Delsohn 2005).
Nobody has been more adamant about pursuing this strategy than our old friend, Grover Norquist, who told an interviewer: "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub" (Norquist 2001). Conservative economists, such as Milton Friedman, agree, although in less colorful terms. They applaud growing federal budget deficits created by tax cuts, which will eventually create pressure to cut social programs and regulation (Friedman 1988; 2003).
In reality, all except a handful of principled libertarians have no interest whatsoever in thoroughly starving the beast. To the extent that government subsidizes and protects business, conservative class warriors welcome the governments' engagement with open arms. Only when the government lends support to the poor and disadvantaged does the right wing regard state spending as an abomination.