Why the Deficit Is Simply Not an Economic Problem Now, or in Future Decades

[unhappycamper]

Why the Deficit Is Simply Not an Economic Problem Now, or in Future Decades
AlterNet / By Joshua Holland

November 19, 2010 | Despite ubiquitous claims to the contrary, the United States does not have a “deficit problem,” over either the short or the long term. That’s because a large fiscal deficit is an economic issue, and what we face is a political problem -- a profound disconnect between what Americans expect to receive from the government in services, and what they expect to pay for it in taxes.

That’s fueled, in large part, by a well-funded conservative movement that has convinced a significant portion of the population that they can live in a modern, highly developed country with decent infrastructure and a modest safety net, get an endless series of tax breaks and not take on a mountain of debt as a result. That mathematical impossibility represents a different problem; namely, a public that’s poorly informed about taxes and spending. It’s a low information problem.

We would have a deficit problem -- an economic problem -- if the right’s narrative of “runaway government spending” had some basis in reality. But it doesn’t. Using data from the Organization for Economic Cooperation and Development -- the “rich countries’ club” whose members represent most of the world’s leading economies -- Sabina Dewan and Michael Ettlinger showed that between 2004 and 2007, the U.S. ranked 24th out of 26 countries in overall government spending as a share of our economic output. Only Ireland and South Korea, both relative newcomers to the club, had a more “limited government” than we did during that span.

That share will rise in the coming years as the baby boomers move into their golden years and we offer health insurance to millions of Americans who couldn’t previously afford it, but given that our spending was about 7 percentage points below the OECD average -- and almost 20 percentage points beneath that of big spenders like France -- we still won’t have a very “big” government relative to the rest of the developed world.

~snip~

The reason it’s important to understand that our budget gap is a not a structural economic problem is simple: presenting it as such -- and getting pretty much everyone to repeat the claim -- is giving America’s elites an opportunity to steal your Social Security, make seniors and vets pay a bigger chunk for their health care, and otherwise deepen their brutal assault on working America’s economic security.

[Hannah Bell]

1. K&R

[KharmaTrain]

2. The Bankster LOVE Defecits

Another big GOTB lie...that they hate defecits. BULLSHIT. All one has to look at how much they ran up when they were in charge. A sudden "come to Jesus" moment now? Hardly. Just words to win them elections...that's all. The only people they're fiscally responsible to are the rich...and they use the defecit to make money (like they seem to do with everything).

When the government borrows, they do it various ways, including taking loans from large American banks. That's money that never gets paid back...the government is lucky to cover the interest payments and the banksters are fine with that. Just like with those on revolving charges, they keep collecting only on the interest and the principal builds...so does the defecits. But little they care, they're skimming free money...and would love the government to spend even more.

The bullshit about "cutting the defecit" is yet another rushpublican ruse. They hide their spending...but be assured they will spend and then attempt to blame even bigger defecits on this Administration.