The Deficits Republicans Don't Want to Talk About
By Thom Hartmann A...
I agree with Republicans - America has a deficit problem. It’s just not the same deficit problem Republicans are freaking out about.
Shortly after sweeping the November midterms, Speaker of the House Boehner and Senate Majority Leader Mitch McConnell wrote an op-ed in The Wall Street Journal, outlining their plans for the upcoming Congress. In that op-ed, they wrote that Republicans would work to address, “a national debt that has Americans stealing from their children and grandchildren, robbing them of benefits that they will never see and leaving them with burdens that will be nearly impossible to repay.”
As usual, Boehner and McConnell were sounding the alarms over our nation’s federal deficit, something Republicans like to do a near-daily basis. But, what they didn’t say in that op-ed is that our federal deficit has actually improved A LOT in recent years.
Our federal deficit has been slashed by over two-thirds since President Obama took office, and deficits over the next decade are going to be around $4.7 trillion dollars lower than what the Congress Budget Office estimated just four years ago. Instead of focusing on a federal deficit that’s at its lowest point in years, Republicans should instead be focusing on America’s real deficit problem.
In a new report titled, “We Must Rebuild the Disappearing Middle Class,” Senator Bernie Sanders talks about the other deficits we are facing as a nation, and how we can go about addressing them. Those deficits are in jobs, infrastructure, income, equality, retirement security, education, and trade.
Right now, millions of Americans are unemployed or underemployed. As Senator Sanders points out in his report, the real unemployment rate, which counts those underemployed and those who have given up looking for work, sits at a staggering 11.2%. This is not a problem that we can just ignore.
Instead, Senator Sanders is arguing that we take a page out of FDR’s playbook, and create a new federal jobs program, which would put millions of unemployed and underemployed Americans to work in good-paying jobs.
One of the fastest ways to create those jobs is by addressing our nation’s infrastructure deficit. As we speak, our bridges are falling down, our roads are buckling, and our transportation systems are a joke compared to the rest of the developed world. As a result, the American Society of Civil Engineers gives America a dismal D+ rating on overall infrastructure.
Ever since Reagan came to Washington and blew up federal funding for infrastructure projects, our country hasn’t been the same. It’s literally been crumbling to the ground. Lawmakers on Capitol Hill have neglected our nation’s physical infrastructure for too long, and it’s time for a change. By investing $1 trillion in infrastructure spending over the next five years, as Senator Sanders suggests in his report, we could help create over 13 million good-paying jobs AND bring America out of the 19th century and into the 21st century.
Meanwhile, while we’re addressing America’s infrastructure deficit, we must do something about the income and equality deficits plaguing our country. It’s absolutely insane that in the richest country in the world millions and millions of people are struggling to survive and put food on the table.
As the Sanders report points out, “We must raise the minimum wage to a livable wage. In the year 2015, no one in America who works full time should be living in poverty.” But raising the minimum wage alone isn’t enough to level the playing field and combat our nation’s wealth inequality epidemic.
Right now, the top 1% of Americans control nearly as much wealth as the bottom 90%, while 400 Americans own more wealth than the bottom 150 million Americans combined. That’s inexcusable. Heck, even Ronald Reagan thought it was crazy. Speaking about America’s tax loopholes during a speech in 1985, Reagan said that, “in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary, and that’s crazy. Do you think the millionaire ought to pay more in taxes than the bus driver or less?” And, of course, the audience answered, "More!"
It’s time to make the wealthy elite and giant transnational corporations pay their fair share to support our economy.
While it’s important to make sure that all Americans have an equal shot at success, it’s also important to ensure that all Americans can retire comfortably. As Senators Sanders points out, “Today, only one out of five workers in America has a traditional defined benefit that guarantees income in retirement. Nearly half of all Americans have less than $10,000 in savings.”
Fortunately, there’s a pretty easy fix for America’s retirement deficit: expand Social Security. Instead of focusing on cuts to it, our lawmakers need to be talking about how to expand this vital lifeline for millions of Americans.
Next, we need to address our nation’s education deficit, which is keeping us so far behind much of the developed world. Right now, there’s over $1.2 trillion in outstanding student loan debt in America. That’s because college has become so expensive that getting a degree also means taking on mountains of student loan debt. And those mountains of student loan debt are also hurting our nation’s economic recovery. It’s a lose-lose situation. We need to make to be making it easier to get a college degree in America, not harder.
Finally, we need to tackle America’s ballooning trade deficit and out-of-whack trade policies.
Last year, our trade deficit stood at $493 billion. Meanwhile, years of so-called “free trade” deals have exported millions of good-paying American jobs overseas. We need to rework our trade policy, and stop signing on to so-called “free trade” deals that export jobs and screw over working-class Americans.
So, when Republicans whine about America having a deficit problem, they’re right. We do have a deficit problem. BUT, it’s not our federal deficit that’s the problem. Instead, it’s the deficit in our spending on infrastructure, on education, and on job creation that’s really keeping our country down.
As Senator Sanders writes, “While we must continue to focus on the federal deficit, we must also be aware that there are other deficits in our society that have been causing horrendous pain for the vast majority of the American people.” It’s time to stop that pain, and start making America great again.
Comments
#2
We have to start saying like it is, the Reublicans WANT TO REMOVE THE MIDDLE CLASS! I wish somebody would make the public charge out loud and ask them to prove they are not intentionally sabotaging the American economy because the middle class has been on AUSTERITY since REAGAN by Tax cuts for the rich, loss of Federal Education supports to State Colleges, cutting funding for infrastructure construction and MAINTENANCE and sending jobs overseas and pretending they didn't know what was happening.
HOWEVER!
THEY KNEW what they were doing and if what THEY'VE DONE is any indication of INTENTION, IT'S CLEAR THAT 30 years of conservative economics THAT have gutted the middle class and we should thank the Repugnicans for pointing out the failure of CAPITALISM being "good" for the middle class as THEY TRY TO DO IT AGAIN!!! because it can't be denied!
How can they live with themselves with so much misery and want in this country with half our kids qualifying for free lunches and one quarter of our families not being able to afford a CHECKING ACCOUNT!
HOMELESS SCHOOLKIDS ?? Did they make a lifestyle choice?
HOMELESS VETERANS ?? They made the wrong lifestyle choice when they served this corporate abomination masquerading as a Democracy where tax cuts have to be paid for with the lives of Veterans.
#3
ONEWORLDATPEACE-
Well said.
Thom--- We need your investigative hounds again. Find out who's again pushing for a constitutional convention to get rid of our bill of rights. 34 states needed, 31 signed. Have a website to go to and list states, reps., backers, co. supporting such actions. Just follow the money.
#4
Would it be a violation of our trade agreements to put tollbooths on the roads around major seaports, and only charge 18-wheelers to go through those tolls? Something like $2,000 per axle, until companies got the idea that it would be in their best financial interest to move the factory back onto this side of the tollbooth.
It wouldn't be a tariff, because we're not taxing the product itself. Just the means by which it is delivered to the American comsumers.
Or, the individual states with the ports, like California, could put a $1,000 per gallon tax on diesel. The trucks and trains have to fill up sooner or later.
#5
We already have a federally funded job program-its called the pentagon. There is a reason why we have perpetual wars in the middle east. It keeps the tax dollars flowing to the war industries. When you look at the way we killed people in the middle east and pakistan, it makes perfect sense. Killed them indiscriminately with the actual targets so as to fostered hatred for the US, so there will always be a fresh supply of new taliban warriors, so there will always be a fresh supply of new ISIS fighters. This is how you keep the money flowing to the war industries. War is good for business!!!!
#6
Obama is abusing the office of the Presidency. He will be impeached. You heard it here first.
#7
Thom, without democratic popular consent, how do you and Sen. Sanders plan to achieve this lofty goal of a new "New Deal”? The political will is absolute zero in both legislative house to help the middle class, or any class with the obvious exception of the rich and influential classes of American society.
Thom, I love what you're selling, but the rhetoric falls empty without established well organized support. The divisive nature of the well- constructed distractions like identity politics that burns up tons of misdirected activist energy on both sides of an issue. This waste of energy should be focused on the very things you're talking about, but the emotional issues dividing us - Keeping both, Democrats and Republican, bottom 80%, distracted from issues both sides agree upon like jobs, unjustifiable international trade deals, military spending and other common concerns. Ralph Nader has been trying to establish these connection, and I should add being ridiculed, mostly from the left, for his efforts to find common ground between Democrats and Republican.
I would think the first step in an ambitious plan like Sen. Bernie is proposing to the American public. Should start with an education campaign aimed at both rank-n-file Democrats and Republicans. With the goals of trying tear down these well-designed constructs of manipulation, designed to distract, divide and frustrate American society into allowing essential commonly supported issues like jobs, infrastructure and the out of control economy to go unchallenged by a united Democrat and Republican citizenry.
Without a well-considered strategies to develop organized support, the rhetoric devolves into an empty grand notion with its only goal being to inspire partisan base cheerleading and meaningless idealistic speculation of how good it could be if only….
#8
When the wolves are guarding the hen house, don't expect dinner. When the thieves make the rules, don't expect a paycheck. When the people stay asleep, don't expect a change.
#9
Penelak -- Thom has been saying for a long time that Obama will be impeached if repugs take control of the house and senate. He said it was the number one thing on the repugs to do list.
It has nothing to do with Obama abusing the presidency less than any other President.
#10
Richardofjefferson -- Do you have any samples of the left ridiculing Nader?
#11
pfnelkak -- a 30% unemployment rate could serve as an alarm clock. However, the corporate media likes to act as a snooze alarm.
#12
Two things.. I can't find a lot of direct news articles from the left criticizing on issue I address, but I've posted in the forum about Nader, and I got a lot flak about it from what I consider left leaning posters.
Secondly - I'm really glad that's what you took away from what I posted. My rhetoric must be powerfully weak because that's not the intrigue my post was supposed to inspire.
I did manage to find one example:
http://socialistworker.org/2004-2/507/507_07_NaderDebate.shtml
#13
chuckle8--
Sorry. Just been here a month.
#14
PFNe... I subscribe to Thom's podcasts. I essentially listen to every word that comes out of his mouth.
#15
Rich of Jeff ... I went to the link you provided. During the little bit of time I spent looking at the articles, I noticed all the dates seemed to be before Nader's book "Unstoppable". That book seems to address the main issues of your concerns.
Since it is all of us against the "billionaires", as I have mentioned before, we should end each of our blogs by saying "movetoamend.org". We should say this in the same way that in many churches the parishioners say "Amen" whenever they agree strongly with the preacher.
#16
Quote ChicagoMatt:Would it be a violation of our trade agreements to put tollbooths on the roads around major seaports, and only charge 18-wheelers to go through those tolls? Something like $2,000 per axle, until companies got the idea that it would be in their best financial interest to move the factory back onto this side of the tollbooth.
It wouldn't be a tariff, because we're not taxing the product itself. Just the means by which it is delivered to the American comsumers.
Or, the individual states with the ports, like California, could put a $1,000 per gallon tax on diesel. The trucks and trains have to fill up sooner or later.
Matt, that sounds like a wild idea. I don't see how it'd work. I think it would further encourage capital flight and cause the multinationals to write off America even more - if that were possible - writing off the American consumer in favor of the Indian and Chinese consumer whose middle class is growing.
#17
The multinationals and manufacturers have no loyalty - and no reason for loyalty - to the United States. Now they can manage production from the other side of the world they'll trash one society and move on to the next.
#18
After I took my first job after getting married, I bought my first house. After down payment, my payment including insurance, Interest and other charges amounted to about35% of my gross monthly income on a 30 year mortgage.
Today the GNP, corresponding to the gross salary of an individula is aboiut $21T. The current debt is aproximately $4.7T which is about 5% of the GNP. We can certainly afford increasing debt in order to be the employer of last resort and get people back to work. I personally think the unemployment rate should be the total potential labor force of individualss between the ages of 18 and 65 minus the number of individuals working at least 40 hours per week. The proportion of unemployed should then be about 18%.
#19
Reply to #17: What happens when they run out of societies to trash?
#20
Boehner and McConnell and their ilk are the ones stealing from our children and grandchildren. Who the hell do they think they're kidding?! These guys are always blaming someone else for their own crimes. Classic psychopathic pabulum for a deliberately misinformed public. If this wasn't so tragic, I'd think it was hilarious in its absurdity. - AIW
#21
AIW -- RE running out of societies/countries. If the oligarchs looked that far ahead with their greed, many of the problems we have today would not exist.
#22
bobcox -- Where are you getting your numbers? Please check out the following link
http://www.treasurydirect.gov/NP/debt/current
Out debt is about 18T. I think we should raise it to 36T and reduce private debt.
Quoting 18T as the debt is just a bright, shiny object that make economists feel sorry for your lack of understanding (I am not an economist). Economists concern is the debt/GDP ratio. They do not like a ratio greater than 100%. However, I am still waiting for their explanation why Japan, which has a 200% ratio, became the wealthiest (per capita) country in the world in 2010. They beat up on Japan on their slow growth, but if you become the wealthiest country in the world, the economist better check what they are talking about.
#23
Until we exit these "free trade" agreements and again enforce the anti-trust laws, the only jobs that may be created are by global corporations who certainly do not respect peoples' rights. Wal-Mart is an excellent example. Without tariffs to protect American manufacturing, American industry cannot compete. Without anti-trust enforcement, neither can small business survive. Politicians, even Bernie Sanders, telling us what we need never change a thing. Most Americans know what is needed. We need a government for its constitutents, voters who look beyond the propaganda and PR, relief from taxation for the high risk gambles of Wall Street. We need to cut military spending and take a good hard look at our judicial and prison system.
We educate our children to be in debt and overqualified for most of the jobs America now has to offer . Maybe they should skip college and go work at WalMart or McDonald's out of high school. At least they would have a job after awhile and they wouldn't be in debt starting out. Does anyone know what the per capita debt is in the US?
I'm from the south....red states! Criticism gets you looked at like your crazy as h----. Is that way in other red states?
#24
The answer to my question on per capita debt in USA is (and this includes newborns), 54.62K per person in January, down from 54.65K in December 2014, up from 52.09K in Dec 2013. So...we're slowly sinking.
#25
Penny R -- Is that private or public debt? Why do you care about the debt? Please care about the median wage.
Andrew Jackson is the only administration to drive the debt to zero. It almost destroyed the US economy.
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Thom: The so called deficit is a made up number that simply respresents the difference between what the Federal Gov't collects in Taxes via the IRS (BTW, that money is accounted for and is then discarded. There isn't an account that the IRS sends it to to be used again) and the dollars it creates when it pays its bills. A monetarily sovereign nation like the USA doesn't need to borrow the sovereign curency it created. A non-monitarily sovereign entity like you, me, State, and Local Governments need dollars to pay our bills. We earn those dollars by working. State a Local Governments earn their dollars via taxes. When you and I, State and Local Governments "earn" less than we spend we then have a deficit. It is impossible for a monetarily sovereign entity like The Federal Government to have a defict. It creates dollars every time it pays its bills. It's interesting that I first heard about Monetary Sovereignty a few years back when you had someone on your radio show talk about Modern Monetary Theory. I'm wondering why you haven't done more shows about MMT and/or Monetary Sovereignty?