Sunday, January 6, 2013

Ignore the "US government is spending too much" hype

Involved voters have reason to ignore Senator Mich McConnell, Alan Simpson and Ersine Bowles when they say the real problem is spending.

Check out these recent blog posts in which Kevin Drum at Mother Jones and Samuel Knight at the Washington Monthly's Political Animal expose them for the ideologues they are.

Drum provides the data and states:
The facts are pretty clear. Spending isn't our big problem. The recession spike of 2008 aside, it's about the same as it was 30 years ago. But instead of paying for that spending, we've repeatedly cut taxes, which are now at their lowest level in half a century. Tax revenue will go up as the economy improves, but even five years from now it will still be lower than it was when Reagan took office. 
So what's our real problem? That's simple: America is getting older and healthcare costs are rising. That means we'll need to spend more money in the future on Social Security and Medicare. There's simply no way around that unless we're willing to immiserate our elderly, and that's not going to happen.
http://www.motherjones.com/kevin-drum/2013/01/we-dont-have-spending-problem-we-have-aging-problem

According to Knight:
Alan Simpson and Erskine Bowles - co-founders of the corporate lobby Campaign to Fix the Debt ... argue that the national debt is a reason to gut the welfare state. ... 
But they and their disciples couldn’t be more wrong. The U.S. government has no “spending problem” from a macroeconomist’s point of view. Of course, the country can’t indefinitely continue to borrow more than it earns, but the idea that we must somehow tackle debt by cutting spending — and do it right now — is voodoo economics of the highest order.
For spending to be an immediate problem, it would have to be problematic.
...
Yet interest rates are rock bottom and aren’t expected to rise anytime soon, and demand for U.S. Treasury bonds remains high.
Thus, government spending appears to be having no averse effect on financial markets, which, according to Treasury yields, actually seem to think that lending the U.S. government money is a wise idea. The debt “crisis” is only caused by a “spending problem” when one considers government spending to be an issue from an ideological standpoint.
http://www.washingtonmonthly.com/political-animal-a/2013_01/simpson_and_bowles_spending_pr042221.php

Tell your friends and family how bogus the "spending problem/debt crisis" talk is.  Contact your US Senator and Representative.   Tell them that increasing revenue (especially through taxes on the super-rich) needs to continue to be on the table.  And back up the President when he goes to bat for the middle class and those who are in danger of falling out of it.