The ultimate irony, I’m afraid, is that the “debt reduction” plan being put forth in Congress is actually a recipe for an even larger debt. Huh? No, it’s true, taking money out of the economy will lead to a spiral of less demand, higher unemployment, and a smaller economy for the U.S. government to draw tax revenue from.
From Ronald Reagan all the way to George W. Bush, Republican presidents have known that Federal deficit spending can actually grow the economy. Yes, they were all Keynesians by consequence, if not by design.
Today’s Republicans are causing Reagan to turn over in his grave. They either don’t care about the well-being of the economy, or they are too dumb to realize what they are about to do to it. The debt reduction plan simply takes money that would otherwise be a part of the U.S. economy during a vital recovery period, and burns it up into thin air. That money will go back to all the nations that were lending it to the United States, and come right out of the pockets of consumers and the businesses that would have benefited from the spending.
We can safely assume that the removal of such large quantities from the U.S. economy will result in a decline in demand, an increase in unemployment and thus a decrease in Federal tax revenues. Oh, let’s not forget, as a result we’ll have an even larger national debt. Brilliant!
Meanwhile, we are less safe (fewer funds for police and military), we are less educated (fewer funds for education) and we are struggling through unnecessary pain (reduced benefits to Social Security, Medicare, Medicaid, Pell Grants, unemployment, etc.).
What a grand plan! It should be made clear that President Obama has his hands tied behind his back. He had to come to the table with this new Tea Party brand of Republicanism who had the economy held hostage. If not, we could have been looking at default and other much more dire consequences.
Unfortunately, despite history giving us valuable lessons to learn from, Americans know less about economics than they have in almost 100 years. The extreme right has done everything it can to push creationism and suppress economics and political/philosophical thought. America declines.
The world is surely laughing it up good watching us destroy ourselves. Austerity? God bless America! The land of the free, and the home of the brains!?
Justin is the publisher The Nevada View, which has earned the recognition in the Washington Post’s “Best State-Based Political Blogs,” as well as being awarded the “Most Valuable Blogger Award” by the local CBS affiliate in 2011. Follow him on Twitter @McAffee