Galbraith on the Irrationality of Regressive Budget Cuts

[eridani]

http://www.newdeal20.org/2011/05/19/galbraith-on-the-irrationality-of-regressive-budget-cuts-45622/


What worries me more is the prospect – which I think hangs over us all – that there will be a bi-partisan compromise on so-called “long-term deficit reduction,” the issue which even people who think themselves to be sensible and progressive concede must be dealt with, and that this compromise will do irreparable damage to the well-being of large parts of the American population, to what remains of the basic social infrastructure supporting what remains of the American middle class – Social Security, Medicare and Medicaid.

And for what?

The idea that there is an economic rationale for dismantling these most successful and effective social insurance programs, that have performed well and efficiently, with very low administrative costs, for many decades – close on to 70 years in the case of Social Security; since 1965 in the case of Medicare… the idea that the capital markets, for example, demand such an overthrow of these institutions is plainly absurd. The capital markets tell you every morning at what rate they are prepared to lend to the government of the United States for ten, twenty and thirty years into the future. And if people who have money, have their own money on the line, were seriously worried about the prospect that the United States government could not service its debts, or the prospect that the United States dollar will fall victim to a massive inflation, they would not be willing to lend to the United States government on the extremely favorable terms that everybody can see are now available. There is something wrong with this story.

[corpseratemedia]

1. it's clearly absurd and clearly in other countries unworkable

yet we are considering it here

they *know* it will have a devastating effect on the economy

there are no more voices of reason (except the progressives) in power