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Okay, let's get the obvious out of the way.  $17 trillion is a huge number.  It's a number that scares people.  Now imagine you step on a scale, and you weigh 325 lbs.  That might be scary.  However, you happen to be 6'5 and you are a professional football player.  In that context, the weight is not scary at all.  Context is king.  In that light, 17 trillion dollars is not as big a number as it might seem.

Our debt, which should not be confused with the deficit, is currently about 83% of our Gross Domestic Product.  The high water mark after World War II was 125%.  We managed to draw that down, and we can draw this down as well.  Our annual budget deficit, which adds to the debt has dropped over the past 4 fiscal years from 1.3 trillion dollars to roughly 680 billion dollars- basically the 50% reduction that President Obama promised.

More reduction below the fold.

The Right talks a good game about how our debt harms the economy.  They never actually propose doing anything about it.  In the simplest of terms, there are exactly two ways to reduce debt: reduce spending or increase revenues.  There is one way to reduce spending, which is to make cuts.  There are two ways to increase revenues, raise taxes and grow the economy.

Republicans talk about growing the economy.  Specifically, they use the phrase "our pro-growth agenda."  However, their so-called pro-growth agenda is just more tax cuts.  Tax cuts can be a stimulus, but it is not a very efficient stimulus, and one thing that it does is increase short term debt.  The one thing that Republicans are consistent about is that our debt is and impediment to job growth.  Therefore, the key to their pro-growth agenda will increase the greatest impediment to growth according to them.

Just as there are only two ways to reduce debt, there is only one way to grow the economy.  Get more money in it.  There are three ways to do that. Cut taxes, cut interest rates, and increase government spending.  Taxes are at historic lows.  Interest rates are near zero.  Therefore increasing government spending is the only viable option to spur economic activity.

In the 1990's, President Clinton addressed the problem of a week economy by increasing spending, and he off-set the debt raising effects by increasing taxes on incomes over $100,000.  Not a single Republican voted for it.  It led to average job growth of 225,000 per month for 8 years!  It led to three years of government surplus.

We know that increasing government spending helps the economy grow because we've done it in every recession and it has worked.  We know that we can raise the top marginal tax rates without wrecking the economy because we did it.  This is what we call evidence.

If you are a true deficit hawk, you should promote policies that have demonstrably reduced the deficit; higher taxes on those who can afford it, and increased government spending.  When the left says the proof is in the pudding, they can back it up with actual pudding.  The right can't do the same.

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Comment Preferences

  •  They don't care about debt, nor our children (3+ / 0-)

    This is ideology - shrinking government to be drowned in a bathtub.  They don't care about saddling our children with debt - our young people today don't have jobs and need jobs, but they don't care.

    "We have always known that heedless self-interest was bad morals, now we know that it is bad economics." Franklin Delano Roosevelt, Jan. 20, 1937

    by Navy Vet Terp on Tue Nov 12, 2013 at 05:36:48 PM PST

  •  my middle-schooler came home today and told (1+ / 0-)
    Recommended by:
    Demi Moaned

    me that they had a debate about whether we should reduce the deficit by taxing wifi.
    I asked her why they assumed we should be reducing the deficit.
    It makes me so angry that in the very liberal county where we live, with teachers who probably vote the same way I do, they allowed a debate to go forward that was based on Republican assumptions and talking points.
    I told her next time to first question the basic assumption.
    My example -- if the discussion is about why God lets good people die, don't just go with that -- question the assumption that there is a god. (I used that because she has told me many times that she's an atheist).

    While Democrats work to get more people to vote, Republicans work to ensure those votes won't count.

    by Tamar on Tue Nov 12, 2013 at 05:50:47 PM PST

  •  IMO "back it up with actual pudding" means numbers (0+ / 0-)

    I'm kind of finished with opinions regarding the national debt, budgets, or the deficit without actual numbers. I'm not concerned with borrowing for obvious reasons but deficits could become a problem for this economy. Or not. One way or the other though, the US has big problems no Dems are addressing.

    After WWII there was a completely different demographic in place and trending. A much smaller senior class with savings and equity existed with a larger working class building savings and equity with a Booming generation to follow them into the labor market. There were taxpayers galore in the pipeline and pensions and all kinds of funding streams flowing.

    Today there is a very small diminishing senior class, those Boomers are now retiring so the senior class is growing by leaps and bounds every month. But, only around 40% have savings and equity. The millenial generation of workers are a bigger Boomer class with fewer, lower paying jobs, far less savings, virtually no equity, more debt, no pensions and delaying having children.

    So comparisons to post WWII are unenlightening. Also, the size, scale, globalized, financialized US economy today is totally different, in some ways more agile and resilient but trending toward more poverty and contraction.

    Good topic. Great topic, in fact. Couldn't be more important. But progressives and Dems need to be a lot further along by now. Not picking on you but the state of Democratic Party data, education, debate and policy on the economy is dismal to non existent.

  •  You grant too much to the Republicans (1+ / 0-)
    Recommended by:
    Tamar
    The Right talks a good game about how our debt harms the economy.  They never actually propose doing anything about it.
    Actually they don't talk a very good game at all, IMO. Most importantly, they never explain how our debt harms the economy. The closest they ever come to an actual argument is that we are burdening our children. But that's a stupid and inaccurate argument. I've never had to personally pay for the debts of World War II.

    In fact, it's our ability to run deficits financed in our own currency that gives us great economic strength and flexibility. Deficit hysteria basically amounts to relinquishing the effective tools that we have for increasing our prosperity.

    I could go on much longer.

    "The smartest man in the room is not always right." -Richard Holbrooke

    by Demi Moaned on Tue Nov 12, 2013 at 06:04:49 PM PST

  •  Evidence, right on Woody. Most recently (1+ / 0-)
    Recommended by:
    GeoffT

    We spent 175 billion on infrastructure (part of the ARA Stim) we know out of 8.3 million jobs created in Obamas first term about 4.2 million were on these infrastructure projects. The CBO said as many as 4.6 million buts thats an outlier.

    -do some math, and you get a 2.5 multiplier, the same number touted by Paul Krugman, Christine Romer and Dean Baker, and others.

    SO guess what, if we created 20 million infrastructure jobs @ 36k each, the additional FICA would ensure Social Security solvency thru 2090.

    Funny dat. The infrastructure deficit equals the SS deficit equals the jobs deficit....

    Yes it really is that fooking simple.

    .................expect us......................... 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 Tue Nov 12, 2013 at 06:24:58 PM PST

  •  They're Governophobes. (0+ / 0-)

    Debt is a motivator not an issue for them, which is why they can't say or do anything rational about the issue.

    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 Tue Nov 12, 2013 at 06:27:34 PM PST

  •  wow (0+ / 0-)

    well reasoned,

    clearly explained.


    thanks Woody25.

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