Deficit Reduction That Helps the Economy, Not Hurts It

Concern about the deficit is, of course, bullshit.

First, in a crisis of high unemployment and low demand, deficits are exactly what you want - the more, the better, especially if you spend that money creating jobs. Good, secure, government jobs.

Second, interest rates on the money the federal government borrows are effectively negative - foreign countries are paying us to take their money. Let's borrow a few dozen trillion for free while we can!


Third, repugs only care about deficits when the the president is a Democrat; when repugs are in charge they add trillions to the deficit without blinking.

Fourth, Democratic politicians only care about deficits because they're afraid repugs will say mean things about them if they don't.

However, as long as repugs, obscenely rich parasites and cowardly dems are bleating about deficits and using them as an excuse to cut taxes for billionaires and snatch food out of the mouths of starving children, let's talk about how to cut deficits in a way that actually helps the economy.

Down with Tyranny:

Cavanagh reports that there are seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.

Our first three proposals could bring in $329 billion a year; this alone would solve the deficit problem while helping to close the yawning inequality gap.

• 1.  Tax Wall Street: $150 billion per year. A tiny tax on stock and derivatives transactions, which several European countries are on track to adopt, would discourage Wall Street speculation, fill the hole in the deficit left by the Bush tax cuts, and leave plenty left over to fund lots of programs. The National Nurses Union and many other allies are fighting hard for this.

• 2.  Tax Corporations and Stop Tax Haven Abuse: $100 billion per year. The Financial Accountability and Corporate Transparency coalition has pointed out that one of the main ways that corporations avoid paying taxes is by declaring their profits in overseas tax havens like the Cayman Islands.

• 3.  Tax the Wealthy Fairly: $79 billion per year. Our rigged tax code lets CEOs pay a lower tax rate than their secretaries do (as Warren Buffett keeps pointing out). The proposed Fairness in Taxation Act (HR 1124) would address this by adding five additional tax brackets for incomes over $1 million.

These three policy changes would go a long way toward making our society more equal, and that means better health, too. There is a terrific body of global evidence, a lot of it compiled by British researchers Richard Wilkinson and Kate Pickett, that more equal societies are much healthier. People at all income levels live longer; they are more fulfilled; and there is less violence. The United States, a relatively equal society as recently as the 1970s, is now off the charts in terms of wealth and income inequality. It doesn’t have to be that way. Just as we created a more just and vibrant economy and a strong middle class through fair taxes between 1940 and 1980, we can do it again through progressive taxation.

The second source of revenue would make the economy more green, a key imperative in a world where the environmental crisis is now as deep as the economic one. We found two simple ways to raise revenues and help save the environment.

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Finally, there are simple ways to cut the military while making the country and the world more secure. More than half of government discretionary spending now goes to the military. Congress has long avoided cuts, in part because they equate military spending with jobs, but IPS has pointed out that almost every other industry employs more workers per dollar than the military. Plus, there is now bipartisan support for two sets of significant cuts.

SNIP 

These seven simple steps would raise close to $550 billion a year. They would quickly erase the fiscal deficit  and return the country to a healthy budget surplus. There would be hundreds of billions left to invest in key sectors that could make the country more secure, more green, and more equitable: care jobs, green jobs, infrastructure jobs.

In other words, this plan could help erase the nation’s dangerous social and environmental deficits.

Many groups-- from Jobs with Justice to National People’s Action to the AFL-CIO-- are organizing to counter a push by the Right to use the deficit crisis to shred social programs and our nation’s safety net. Let’s up the ante and spread the message. America is not broke. We have plenty of resources to rebuild shared prosperity in the U.S.

Would you like to see the country move down this path rather than the path the GOP and Wall Street are insisting on? The Prosperity candidates will help give Obama the strength and resolve he needs to resist Austerity. Please do what you can to help them get elected in November.