Debt And Reality Check

[marmar]

from the Working Life blog:



Debt And Reality Check
by Jonathan Tasini

Thursday 27 of August, 2009


There has been a lot of handwringing about the long-term debt forecasted by the Administration (a quick observation, in case there is confusion: the fiscal deficit is the annual gap between what comes into the government and what is paid out; the country's debt is the accumulated gaps from the annual deficits). For example:

The nation’s fiscal outlook is even bleaker than the government forecast earlier this year because the recession turned out to be deeper than widely expected, the budget offices of the White House and Congress agreed in separate updates on Tuesday.

The Obama administration’s Office of Management and Budget raised its 10-year tally of deficits expected through 2019 to $9.05 trillion, nearly $2 trillion more than it projected in February. That would represent 5.1 percent of the economy’s estimated gross domestic product for the decade, a higher level than is generally considered healthy.

This is not a big deal, to be honest. The problem is not the debt but what we are spending the money on and how we can pay down the debt over time.

First point: The Administration has correctly said that health care costs are a big part of the long-term financial picture. But, failing to push for a single-payer system is, in my view, going to leave the country with health care bills that are totally a waste of resources.

Second point: we refuse to have a serious debate about the insanity of spending more than half-a-trillion dollars--19 percent of the budget--on the Defense Department. Speaking as one citizen, I did not vote for "change" that meant increasing defense expenditures AND expanding another foolish war (read: Afghanistan). If we want to deal with the debt, let's start by cutting back what is essentially a drag on the economy, not to mention a moral mistake.

Third point: you cannot have a serious discussion about the debt without having a serious discussion about the obliteration of a progressive taxation system and the refusal of both parties to fix the problem. I know the Republicans have no interest in returning some sense of fairness to the notion that people have to pay their fair share of dues to live in a decent society. But, the Democrats have no spine when it comes to the issue--if you want to be charitable, it's because there still remains this fear in the party to talk about taxing the wealthiest Americans...even though the actual evidence shows that much higher taxes on the top one percent (way beyond what the president had timidly suggested) represent no harm to the economy and, in fact, would help the economy overall if it meant that we could fund health care for all and rebuild the country's infrastructure, which would make the economy stronger, and pay lower interest on our debt burden because we had more money in the kitty...because the richest one percent paid a bit more.


http://www.workinglife.org/blogs/view_post.php?content_id=14468

[damntexdem]

1. Sorry, but my reality check bounced.

[boomerbust]

2. Tax hikes on the richest Americans

Will come during Obamas second term.