If you’re an average American, you probably have a lot of debt right now. A mortgage, a car, a few credit cards, perhaps some hospital bills; who knows? Debt is a part of life these days, or at least his has been in recent decades.
Now, imagine, if you will, that you make $50,000 a year, and you’re suddenly hit with a debt of about $30,000. Those without insurance, or whose insurance company screwed them, know exactly what I mean.
You have two choices; you can either go into bankruptcy, or you can pay the debt. Most people will opt to pay the debt. But how would you do that?
Of course, you’re going to cut back on food a little, and maybe lower the thermostat, buy fewer clothes; maybe cut off the cable altogether. But how long do you think it’ll take you to pay off $30,000 in debt at that rate? If you can manage t0 save $500 a month, which would be extremely difficult for most people, it’ll still take at least 5 years, even if there is no interest accumulating. At $200 savings per month, which is more realistic, it could take a decade or more.
So, what do you do?
Rational people would get a second job, right? I mean, if you have that much debt, and you need to pay it off, the ONLY solution is more income. I mean, I guess you could move your family into the inner city, into a rat-infested apartment, and walk to work so that you can save $1,000 per month. But a more rational choice would be to make extra money for a while, and pay it down that way. Of course, getting that extra job might cost a few bucks. You have to have a resume, you might have to buy some nice clothes, you’ll have to fill the car with gas to get interviews.
Now, you know why I say the Republican meme on the deficit and debt is completely insane. We’re never going to reduce the deficit by cutting government spending. In fact, it’s likely that cutting government spending by the $300-400 billion per year that some Republicans suggest would actually make the deficit worse.
What did he say?
Yes, that’s right, wingnuts; if you gut the federal government enough to make what you consider a major debt in a $1.5 trillion deficit, you will end up with a much larger deficit.
When it comes to our national debt, the right simply isn’t rational. Based on the Republican’s approach to the deficit and debt, they must all live in the inner city. There is a lot of talk of cutting our spending coming from Republicans, but absolutely no thought given to taking that second job.
Government spending is not the problem. Yet, based on their rhetoric, Republicans think that spending is the only reason why our deficit is so high. Again; they’re insane. Since Obama was elected, the only area of government spending that has been increased at all is in the area of support for the newly unemployed. You know, people who have paid tons of taxes into the system, but now can’t now, because they have no income, through no fault of their own.
I would also point out that, before Republicans cut taxes on rich people who neither needed or wanted it, and then proceeded to start two unfunded wars, the budget was projected to be in surplus for at least a decade. What the hell happened?
It is fascinating to hear Republicans drone on and on about the deficit all of a sudden. If I hear one more of them scream "14 Trillion Dollars!" as if it was the first time they realized it, I think I'll puke. Over the last 30 years, the debt has risen from $900 billion by FY 1981 to $14 trillion in FY 2011. Even if you give Obama credit for $2 trillion of that, which would be unfair, that means $11 trillion of that "14 Trillion Dollars!" was added by Republicans. In fact, without Democrats, it would be even higher. When Reagan was in office, six of the eight budgets he signed were smaller than the ones he submitted, because Democrats cut a lot of the fat out of them. Compare that to when Bush, Jr. was president, and every budget he handed to Republicans in Congress actually ended up LARGER by the time he signed it. If Republicans really cared about the deficit, they wouldn't have let it get so high in the first place. Clinton handed them a budget with a surplus for at least ten years; instead of the $3 trillion in surplus we should have had 2008, we saw the debt increase by $6 trillion by 2008.
The MAIN reason the deficit is so high is because there just isn’t enough income.
The recession happened, of course. That’s a given. It happened because the Republican-led government allowed criminals to gain control of the financial system, and because Congressional Republicans completely abrogated their constitutional responsibility to regulate interstate commerce, which would most definitely apply to mortgage securities, derivatives and credit default swaps (don’t know what I’m talking about? Well, neither did the people trading in them, apparently). It happened because the people who should know better were allowed to gamble with OUR money without absorbing any of the risk. Of course, as always, the people who lost our money didn’t pay, we did. Millions of people who did nothing but work their asses off lost their jobs, and their ability to pay taxes.
Put simply, folks, millions of people lost their jobs, and in the process lost their ability to pay taxes. THAT is the main reason for the spike in the deficit.
Well, that, and tax rates that are actually too low for some people and businesses and too high for others.
Republicans like to pretend they’re concerned about the deficit, but they couldn’t give a shit less, folks. That’s incredibly obvious. When the time came to end the Bush tax cuts for everyone making over $250,000 per year, Republicans worked hard to kill it, and proceeded to add a few hundred billion per year to the deficit they claim to care deeply about. Overnight, the $1.5 trillion deficit would have dropped to $1.4 trillion, without even hurting anyone.
But without gutting the entire federal government – which would simply shift the tax and service burden to the states, so you will never actually save any money – it is simply not possible to make a serious dent in a $1.5 trillion deficit without raising more revenue. And there are only two ways to do that; raise taxes or create more taxpayers.
If you’re one of those (like me) who would rather not have to pay more taxes, or if you’re a Republican who can’t even think of raising taxes, even on those who can afford it, that means you have to create more taxpayers. That means creating more businesses and more jobs.
And for those of you who think the government doesn’t or can’t create private sector jobs, I point you to the post-war boom – you know, those people we call “The Greatest Generation.” We became the greatest economic power in the world after World War II, and the entire business and job creation engine was fueled using government seed money; and yes; a lot of it was borrowed. Those roads and schools and sewer systems and libraries and police stations and community centers and all of that didn’t build themselves. The boom in professional people that occurred at the time got to where they were because of government money to help them go to school and learn their profession or trade. Government guarantees on mortgages and bank deposits made it possible for banks to loan enough money to buy a home at a rate most working people could afford, which made it possible to build so many homes. The building of those homes created new communities, which led to retail districts building and thriving. It also allowed for more car loans, which meant greater sales of cars, and again; the highways aren’t built and later widened by little elves.
There was also a little thing called the Marshall Plan, in which we went in and assisted Europe and Japan in rebuilding their infrastructure. We helped them rebuild, and they paid us. Instead of dropping bombs on countries, we could very well go in and help them build an economic infrastructure, couldn’t we?
The problem with the right wing mindset seems to be this impression that the money the government spends just vaporizes, which is absurd. The government pays for things, and that money goes into the pockets of workers, who in turn spend it in the community. Tax money circulates the same way all money circulates, but even more so.
This is not the time to get all creepy about the deficit. That time was before 2008, when the economy wasn’t suffering. The way it’s supposed to work is, during the good times, you put money away for the bad times. We should never run a deficit during an economic boom; we are supposed to run one during an economic collapse. The national debt was 120% of GDP after World War II; by investing in infrastructure and supporting businesses that contributed to the overall well-being of the nation, that dropped to 33% of GDP by 1981. Then, guess what happened.
Borrow money and invest it in us for a while. Invest in 21st Century technology, especially those technologies that will wean us off of oil, which is becoming more scarce, expensive and dangerous every day. Invest in transportation infrastructure, including better ways of getting goods from factory to market faster. Invest in companies that create opportunities here, stop handing money to those who take opportunities away, and by all means, stop giving companies a pass when they move their address offshore.
What Republicans are proposing will actually increase the deficit. If you cut, say, $200 billion in government spending from the budget, that is $200 billion that isn’t going into the local economies, which will result in a large number of people losing their jobs and not paying taxes.
I’ll give you an example.
Rand Paul has made a proposal that would cut about a third of the budget for Food Stamps, eliminate the Consumer Product Safety Commission, the Corporation for Public Broadcasting, and the entire Department of Energy, as well as most of the Department of Education.
Well, in the case of Food Stamps, besides the cruelty factor, that’s $42 billion that is taken away from farmers who grow food, manufacturers to prepare it for market, and groceries who depend on that money when determining their bottom line. That’s in addition to the many people who work for the federal government in administering the Food Stamp program. Overall, it would probably cost tens of thousands of jobs in all sectors of the economy, which means the deficit would rise. Also, it would probably cause higher prices at the grocery store. It might also create more crime, as more people have to steal to be able to eat, which would result in more court expense, more bureaucrats to oversee parolees and probationary convicts, and more prisons.
The CPB and NEA would have to lay off people, and artists and others who depend on that meager amount of money would also lose their jobs, and the ability to pay taxes.
And really; the CPSC? In addition to the thousands of laid off people, who would then be unable to pay taxes, and add to the deficit, in the last several years, we’ve experienced hundreds of recalls of dangerous items, and my cat was among those who fell victim to the tainted cat food that we were exposed to. What if the government is sued for not regulating commerce, as it is commanded to do in that Constitution that Rand Paul is always citing to the rest of us?
By cutting the federal government’s spending by $500 billion, Rand Paul would effectively be removing $500 billion from circulation in the US economy, resulting in fewer taxpayers, when what we need is more.
Forget the deficit right now. Spend money on investments in our future. More education, more higher paying jobs, an opening of new markets for goods and services and investment in new technologies will create more taxpayers, and THAT is how you reduce the deficit.
