The fact that Paul Krugman writes columns for the New York Times means that the paper’s readers are occasionally treated to a good media criticism—like today (2/5/10). He writes:
These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.
And the reality:
Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met—appropriately—with temporary measures to stimulate growth and support employment.
This is important—especially when compared to news stories that tell you things like this:
—”Independent voters in particular are uneasy about a tide of red ink in the wake of the billion-dollar packages for Wall Street, automakers and stimulus spending.” (USA Today, 2/3/10)
—”Deficit spending, in turn, has caused the nation’s accumulated debt to swell to dangerous levels.” (Washington Post, 1/20/10)
Or the ABC World News report (2/1/10) that attempted to explain the deficit by focusing on the meaning of a billion: “And when we start tossing around a billion, it’s a huge number. Just think, a billion hours ago, we were in the Stone Age.” Well, that clarifies things.
For more media criticism on the deficit, see Extra!: “The Deficit Distraction: Media Push Spending Cuts Over Stimulus” (9/09) by Veronica Cassidy.
A sixth-grader can understand that when the government buys things it provides jobs, jobs provide income, the income gets taxed, the tax money lowers the deficit. Duh!
Most of the deficit hawks are above the sixth grade level, but they get paid to oppose anything the government does, even measures that would obviously avert vast human suffering. Ancient Chinese proverb: Whenever an economist seems to oppose common sense, his logic can be found in his deposit slips.
The more significant issue is debt (not annual deficits).
We’re approaching levels of debt ($15 trillion)that will require immense resources just to pay the interest on the debt. Within about 10 years we’ll be paying about $1 trillion to pay the interest on our debt!!!Most of it is a result of tax cuts inacted by Republican presidents. It stems from the fundamental American drive for having our cake but asking future generations to pay for it. More than any other factor, it will ultimately result in the U.S. becoming a 2nd tier nation. Our funding mechanisms can’t keep up with our crumbling infrastructure, environmental obligations, health care costs that will likely continue to outpace inflation, and military costs that continue to rise. And what happens the next time we get hit with a recession (more tax cuts and spending increases). We are the least taxed industrialized nation on the planet; yet refuse to pay for the services we receive. The irony is that the American reluctance to pay taxes is what will ultimately lead to a decline in our standards of living, environment, and quality of life.
The underlying problem is a private “Federal” Reserve’s debt-money and the ever rising amount of interest
taken out of our budget as a result of this scam of the ages. Until we have a public central bank and take back our ability to generate money and credit from the big banks owners of the Fed {as the founders intended), we will slowly strangle in this trap.
Duh…..1 billion dollars is also around $2.64 from every person in the US. not a lot….maybe ABC should focus on all the good that can be done if everyone chips in just a little…….
Even a trillion is $2600. each and that doesn’t count those who are making that much an hour and paying virtually “0”!
$2600 per year……..a trillion? and the HC bill is said to cost less that that over 10 YEARS…..DUH-MASS GOP!
$2600 per year……..a trillion? and the HC bill is said to cost less that that over 10 YEARS….GOP!
You do the “hawks” a favor by maintaining their fake wall between discussion of deficits and the hideous “defense” budget. Until we face up to our country’s addiction to war and our economy’s total dependence on defense spending, nothing will change. Which means we have to say it loud, over and over, the way they say their crap: THE WARS ARE BANKRUPTING US.
The two biggest problems the USA faces in finance are the cost of it’s obsession with colonial wars; and the Federal Reserve interest scam. They are connected.
Most Americans have no idea about the real cost of the military/industrial complex – which rivals the bank financial scam in gov’t subsidy and executive bonuses. (check out the benefits and perks to Chenney, Rumsford, Wolfowitz, and — not to mention the Clintons) They falsely through politician’s deception see it as jobs, rather than pic pocketing.
Re: Deficit Hawks, just one word will suffice. HOOVER!