"Medicare, Social Security and Medicaid. . . .the real driver of the debt by any objective standard."
Mitch McConnell, Senate Majority Leader
Buy now, pay later. It is the popular way to go. But eventually it catches up with you.
The GOP is in charge now. They saw the problem and made a choice. The economy had pulled itself out of the 2008 financial crisis over the past decade, but at a time of full employment and a robust economy, instead of bolstering those programs by paying down debt, they went the other direction. They cut taxes, and chose to borrow yet more money. This raises the annual deficit to $973 billion this year and over a trillion dollars for 2020.
Eventually debt catches up with people. Look at PERS.
For twenty five years Oregon legislators and officeholders negotiated contracts with employees who agreed to lower wages in exchange for higher retirement benefits. It was justified by presuming--hoping--that the "free money" of great investment returns would pay the future retirement benefit.
Reality intervened. Bear markets happen, too.
So now taxpayers in Oregon (and in nearly every other state) are paying for the public services we need, plus those un-funded past costs of employees who worked ten and twenty years ago. The debts came due.
The underlying premise of Keynesian economics is that the government would even out business cycles by creating government demand (spending) during recessions and then withdraw money from the economy during booms and full employment to pay down the debt and re-create capacity to borrow during the next recession.
National political disfunction broke that model.
The GOP Congress refused to spend money on infrastructure during a time of slack demand and widespread idle capacity in 2009-11, but now, with historically low unemployment (but a Republican president) it is borrowing money. Once again, debt is justified by presumption and hope: with the extra money in taxpayers' pockets, the economy will create higher revenue.
Less means more. It is the current version of "free" money.
 |
| 60% prefer the programs to the tax cut. |
It hasn't worked. Reality intervenes. Lower taxes mean less. Oregon taxpayers are forced to confront this reality. The debt came due.
So far US taxpayers are allowed to continue to deny the reality of debt. We can still borrow money.
But time passes and eventually people will expect obligations to be paid in full. McConnell was dangerously frank when he said that there would need to be an adjustment in Medicare, Social Security, and Medicaid benefits. He voiced the reality that there is a cost to those tax cuts, and McConnell was pointing at who would pay them.
Voters will rebel. The 2017 tax cuts primarily benefited corporations (i.e. the investor class.) There are more people who count on Social Security, Medicare and Medicaid than who count on dividends.
1 comment:
If only more people understood that economics is the fundamental issue driving all the others.
By conflating economics with cultural, emotional issues, including many, many lies, Republicans have been able to convince those who live irrational lives ( about a third of us, apparently) that they are victims of a plot by godless parasites to steal their hard earned money. Meanwhile, every time they wriggle their way into power, the working classes lose ground.
Progressives see this clearly, and if this nation is to avoid further decline should make the economic argument more forcefully. Democratic politicians lose trust when they appear to waffle on this basic value, and if more had backed Sen. Sanders, who was seen by Democratic leadership as "too extreme" at a time of feckless complacency, we might have had a different result. This is not to say that the Sanders movement's unwillingness to collaborate with the Democratic Party, including him joining it, wasn't a big factor as well.
Post a Comment