I have been arguing for some time now that the deficit and debt "crisis" are completely made up and phony. There is no crisis. But, at the very least, if you want to get rid of deficits, there is a simple path: spend MORE on jobs and raise incomes by promoting broad unionization. California just proved it.
For the moment, I want to put aside the other ways we can spend government money better and eliminate the deficit--stop funding trillion-dollar immoral wars, bring back a progressive tax system and implement a single-payer health care system to get rid of the blood-sucking private insurance industry (things we should do even thought there is no debt or deficit "crisis").
Over to California:
After months of doomsday scenarios and apocalyptic warnings about cuts to California schools, parks and police, the news from Governor Jerry Brown on Monday was nothing short of startling: California is now expected to see $6.6 billion more in revenue over the next two years than had been expected.
How did this happen?:
The unexpected improvement in the state’s fiscal picture was due to rising incomes – the average California worker will make an additional $4,000 over the next two years, the state now estimates, which will mean more income taxes going into state coffers.[emphasis added]
Wow. So, you mean, if people actually earn more--as opposed to cutting their wages, laying them off, making them pay more for their health care and cutting their pensions--they might pay more in taxes? Really. Wow. Such brilliant economics--economics that seem to have escaped Republicans, and too many deficit-obsessed Democrats.
History is quickly forgotten so let's remind ourselves: when the deal was cut for the stimulus in 2009, the president caved into Republican and Blue-Dog Democrat demands that the stimulus only come in at $787 billion--and a third of that was in the form of the most inefficient way to create jobs, meaning tax cuts.
There were people who called for a far bigger stimulus--and in April of last year, I wrote that we needed to put another trillion dollars into the economy for jobs, jobs, jobs.
Gov. Jerry Brown still is ringing his hands over the deficit--and I get that states have a much bigger challenge because they can't just print money.
But, that's what the conversation should be about today--if you want a deal for the debt ceiling, the deal should be: start the money printing presses going, cut off the money for Afghanistan and start pouring hundreds of billions of dollars into jobs, at the federal and state level.
Then, let's have a massive move to unionize every workplace--the counter Scott Walker argument. That's smart middle-class economics AND better long-term FISCAL policy. Unions lead to higher incomes=more tax revenue. DUH.
The deficits will go away. And the people will have a better life.