General Discussion
In reply to the discussion: Mayor abruptly slashes wages to minimum for Scranton City Workers [View all]PETRUS
(3,678 posts)You suggested that the problem is public spending that we can't afford. So you are at least positing that we are poor in a relative if not an absolute sense. That was my point
So has Scranton made budgeting errors? In an earlier post, you suggested someone ought to look into it, now suddenly you are describing it as mismanged. Do you know something? I don't. In either case, it is indisputable that the collapse of the housing bubble and a subsequent drop in aggregate demand is hurting them. Production from the overall economy can, in fact, help Scranton. We could choose to allocate funds via the Federal goverment, and we should.
You are right to suggest that there are individual stories to be told city by city (and even business by business, or worker by worker) but it's important to identify the biggest problems and prioritize them. Right now, joblessness is a bigger problem than debt. Eventually we need to make other changes to our crisis-prone, inequality-producing system but bringing public spending down to a level that might please people like you and Paul Ryan is not the solution. There is one item to worry about in the Federal budget and that is Medicare/Medicaid. And here the problem is not that benefits are too generous, the problem is that we are overpaying providers. The story behind this is the political influence of medical equipment manufacturers, pharmaceutical companies, private insurers, and high-end specialists. Other wealthy countries spend half as much per person as we do and get better results. If we plug in the medical costs of a country like France or Germany and change nothing else, we would be projecting budget surpluses.
A few words about public debt: This is mostly money we owe to ourselves, much of it in the Social Security trust fund. A not insignificant portion is held by Chinese and others outside of our borders, but this is a function of the trade deficit. And now would be a good time to point out that our trade policy (and immigration and dollar policy, because those things factor in as well) is a policy designed of by and for the 1%, and they are doing just fine. The rest of the debt is held by Americans. The 1% owns about 60% of all financial securities and the top 10% own 98%. So most debt, public and private, is money the rest of us owe to the very wealthy. Instead of taxing Bill Gates and Pete Peterson to pay for education ($1 trillion in student loans!) and other public services, we've been borrowing it from them which means your grandchildren are going to owe their grandchildren. So debt, too, is a problem of distribution.
(PS. I am way to the left of Krugman.)