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It's Simple: Cutting the Deficit Will Kill Jobs and Hurt Growth; Taxing the Rich Won't
We've got to stop obsessing about the deficit.
With respect to Dr Reich, This is about the Republican Power Trip and Weakening Government Power to Regulate THEM at any cost.

The economic truth with respect to the deficit is simple but not intuitive.
  It is different from the reality that reporters experience in their everyday lives where an individual can not spend the same dollar twice, so marketing deficit hysteria to reporters and thus to the rest of the county is relativity easy.
BUT The government gets a percentage of each dollar back as one person pays it to another. The government CAN spend get back and spend the same dollar twice. It is called the multiplier effect, and it is strongest when the money is spent on education, Research and development, and in direct aid to the lowest income levels. Money spent on the rich, one the other hand, only seems to inflate commodity prices.

Add to that that deficit for a country that can control its own currency is pretty much optional. Lincoln monetized the debt and we could to.
We have the knowledge, the people, the factory capacity and the commodities. We are RICH is REAL terms. We are suffering only because the financial structure has been and is being manipulated. We are only as broke as we say we are, as we accept we are.

The financial rules are changed all the time. The last time was when we bailed out the Rich with DIRECT AID in the TRILLIONS the waning days of the Bush administration. The rules changed the rich were bailed out by the people. The deficit was not considered a problem when AIG, GE and Goldman Sachs CEOaristocrats were the ones looking at certain ruin.

Which is why there is so much high volume emphasis on marketing the "we're broke" meme now. They need to drown out memory. Need to keep people from asking "WHY" the bailout extended primarily to those who made millions a year when it would have cost less and been much more efficient to simply have the treasury directly aid homeowners and refinance those exploding ARM home loans at 4%.  (The TARP money was injected at the top and what we have seen is of typical trickle down gross inefficiency. ) They need to bring up the specter of Greece, a country that has a different fiscal system,  that does not control its currency but is like the US in one way, the rich do not pay their taxes.) Greece might default by necessity. The US which controls its currency never need default.  

The Republicans manipulate with the specter of default.
We would only default if they force it.
That is the power we have given them over us.

The US can only default as a result of deliberate actions by the Republicans in the House of Representatives. The deficit does not have to be any particular number or percentage. It could be a .001% of GDP increase. As long as the deficit is going up and the debt ceiling has to be raised, the Republicans have leverage and  can still force default by refusing to raise the DEBT CEILING.


the federal budget deficit isn’t the nation’s major economic problem and deficit reduction shouldn’t be our major goal. Our problem is lack of good jobs and sufficient growth, and our goal must be to revive both.

Deficit reduction leads us in the opposite direction — away from jobs and growth. The reason the “fiscal cliff” is dangerous (and, yes, I know – it’s not really a “cliff” but more like a hill) is because it’s too much deficit reduction, too quickly. It would suck too much demand out of the economy.

But more jobs and growth will help reduce the deficit. With more jobs and faster growth, the deficit will shrink as a proportion of the overall economy. Recall the 1990s when the Clinton administration balanced the budget ahead of the schedule it had set with Congress because of faster job growth than anyone expected — bringing in more tax revenues than anyone had forecast. Europe offers the same lesson in reverse: Their deficits are ballooning because their austerity policies have caused their economies to sink.

Dr Reich is giving them too much credit.

The real objective of the deficit ploy is to prevent DEMOCRATIC government from investing in research, education, infrastructure, and REGULATION. The Republicans want most of all to starve to government so that it is too weak help the people  and too unpopular to regulate environment destruction, financial fraud in the markets, monopoly power,  antitrust enforcement, pollution control (like actually testing cement used in oil wells will not fracture and will hold the pressure) , unfair labor practices, or anything else that might cut into their advantages and curb the excesses of CEO dictators.

As long as the Republicans have the House, they will use the deficit and Debt Ceiling as a weapon of mass destruction.
The problem is not the deficit it is the Republicans that prevent expenditures that could heal the economy.
We need to get them out of there.


Do you believe that the Republicans believe that the Deficit is a problem?

1%1 votes
1%1 votes
96%54 votes

| 56 votes | Vote | Results

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Comment Preferences

  •  Tip Jar (11+ / 0-)

    To Goldman Sachs in according to their desires, From us in accordance with the IRS.

    by Bluehawk on Wed Nov 21, 2012 at 04:26:54 PM PST

  •  Robert Reich has it spot on. (3+ / 0-)
    Recommended by:
    Bluehawk, jacey, sunbro

    We should be saying JOBS JOBS JOBS.

    Not deficit deficit deficit. The deficit can be dealt with after the jobs problem is fixed.

    "We must be the change we wish to see in the world" - Gandhi
    "The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little" – FDR

    by smokey545 on Wed Nov 21, 2012 at 04:40:38 PM PST

  •  The deficit is high BECAUSE people are out of work (1+ / 0-)
    Recommended by:

    and a rapidly growing deficit gives the Rethugs more opportunity to blackmail the country.

    So one has to ask oneself if the Republican have any real interest in creating jobs or lowering the rate of growth of the deficit.

    To Goldman Sachs in according to their desires, From us in accordance with the IRS.

    by Bluehawk on Wed Nov 21, 2012 at 04:43:09 PM PST

  •  My idea for a new frame... (1+ / 0-)
    Recommended by:
    Neon Mama

    I might diary this soon when I have some time.....but here it is:

    Democrats, like Republicans, want more people to pay income taxes.

    The difference is in how we'd get there.

    They want to cut taxes for the wealthiest and increase them on everyone else. Democrats want to broaden the tax base by creating the conditions to produce more jobs.

    The GOP wants to cut or cut out important deductions like mortgage interest and indispensable credits for the working poor like the Earned Income Tax Credit. Many in the GOP would even want to replace our progressive income tax system with a regressive flat tax, having everyone pay the same percentage tax rate regardless of whether they make $40,000 or $40 million.

    Democrats want to create more jobs and better-paying jobs through greater investment in our infrastructure and in supporting green technologies that will dominate the economy in coming years. If we can get more people into jobs, we grow the economy. Wages begin to rise and people who didn't make enough money to owe income tax will find they finally earn enough to owe income taxes. Who wouldn't mind paying a little income tax under those happy circumstances?

    Coming Soon -- to an Internet connection near you:

    by FischFry on Wed Nov 21, 2012 at 05:09:10 PM PST

  •  And other ridiculous $hit ... (4+ / 0-)
    Recommended by:
    Jim P, Bluehawk, desertcanyon, peachcreek

    like if the Fiscal Cliff tax-breaks for the rich expire, it'll hurt the GDP. Oh noooos!

    GDP is just a measure fiscal activity. It does not translate into jobs, expanding prosperity, or a healthy, fair economy.

    It should be required that every reporter that talks about the end of the Bush Tax cuts for the 1% must show the chart that shows where the deficit gets it's bulk from, i.e. the two wars and the Bush Tax cuts for the 1%

  •  Reich Was With Clinton, So Framing Economics Truly (4+ / 0-)
    Recommended by:
    jellyyork, Bluehawk, peachcreek, ciganka

    accurately wouldn't make them look all that good, and it violates their policy of pitching to conservative moderates to vote for us and take the hardest edges off their conservatism without moving the Overton picture window.

    Both parties now are so far past reality that it's over the horizon from us.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Wed Nov 21, 2012 at 05:19:50 PM PST

  •  Money quote (3+ / 0-)
    Recommended by:
    Bluehawk, peachcreek, ciganka

    The problem is not the deficit it is the Republicans that prevent expenditures that could heal the economy.
    We need to get them out of there.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Wed Nov 21, 2012 at 06:19:43 PM PST

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