Tuesday, April 24, 2018

Meagan Day — The Democrats and the Deficit Con

Dick Cheney was right: deficits don’t matter. If only Democrats would learn.…
Attempting to balance a commitment to deficit reduction alongside a theoretical responsibility to protect and expand public programs, Democrats end up imposing false limitations on themselves and neutering their own supposed political agenda. One wonders if the party, increasingly reliant on an elite capitalist donor class, is actually using deficit reduction to weasel out of the responsibility to make life better for the working-class majority of their constituency. The GOP inevitably spends every penny the Democrats save; the difference is that they spend it advancing right-wing policies, not left-wing ones, and lining the pockets of the rich, not the rest of us. The Republicans may be hypocrites, but the Democrats are either suckers or they’re throwing the game. 
Not MMT, but useful.


Noah Way said...

A Democrat is just a pro-choice Republican. There is no other substantive difference.

Konrad said...

FROM THE ARTICLE: “In fact, these economists point out, it’s far from clear that deficits have any macroeconomic effect at all.”

Wrong. If deficits have no macroeconomic effect, then let’s have a federal budget surplus, so we can plunge the U.S. economy into a severe recession.

Federal deficits have a huge effect. They boost the real economy. Deficits help Main Street; not just Wall Street.

On a different note, Republicans love federal spending as much as anyone else does. Republicans just want all federal dollars to go to the rich and the weapons makers. Republicans only whine about the (non-existent) “national debt crisis” when Republicans want to cut social programs that help average Americans.

Republicans whine about the PUBLIC debt (which is trivial) in order to distract public attention from PRIVATE debt (which is catastrophic, e.g. student loans).

FROM THE ARTICLE: “Much of the 2000 presidential election debate focused on what should be done with the Clinton surpluses, with Al Gore tying the surplus to Social Security and promising to put it in a ‘lockbox’.”


According to the OMB, under the Bill Clinton regime, the US government had a $69.3 budget surplus for FY 1998, a $126 billion surplus for FY 1999, a $236 billion surplus for FY 2000, and a $128 billion surplus for FY 2001 (which began in Oct 2000).

During those four years, the Bill Clinton regime sucked a total of $559.3 billion out of the US economy, causing a severe recession, which only eased when W. Bush began his spending for endless war.

That $559.3 billion sucked out of the economy did not go into some account somewhere, or sit in a “lockbox." It vanished into thin air. The U.S. government creates its spending money out of thin air, and the federal government sends money back into thin air when the federal government levees taxes. (This is not the case with state, county, or municipal governments, since they do not create or destroy money.)

Federal spending creates money. Federal taxing destroys money. It’s exactly like creating and destroying points on a sports scoreboard by changing the numbers. The federal government has no need for tax revenue, just as a scoreboard has no need for “points revenue.”

FROM THE ARTICLE: “The GOP inevitably spends every penny the Democrats save.”

Wrong again. The U.S. government does not “save” money. Nor does a sports scoreboard “save” points when we change the numbers. Federal dollars and scoreboard points are created or destroyed, but not “saved.” If you could create infinite money on your home computer, you would have no need to “save” money.

FROM THE ARTICLE: “The Republicans may be hypocrites, but the Democrats are either suckers or they’re throwing the game.”

Both Democrats and Republic lie about federal finances, since both sides work for the rich, who want to widen the gap between themselves and the lower classes.

In addition, Republicans lie about federal finances in order to direct federal dollars away from the lower classes, and toward the rich.

Democrats lie about federal finances so Democrats can pretend to be our “only protection” from the rich, who own the Democrats.

Imagine a village whose only water supply is a single well. The well is bottomless and inexhaustible, but everyone who guards the well (Republican and Democrat) rules the village by falsely claiming that the well is almost dry.

If you want any water from the well, then you must grovel to the Republican and Democrat well-keepers.

After all, the (inexhaustible) water is “scarce.”

Noah Way said...

+++ Konrad