Many put forth by business, bankers, and political parties, some by individuals often with personal gain as motivation. It is most unfortunate when we see masses in belief of these myths, supporting political action which would not be supported if truth were known.
Paul Krugman hit on one this week in his discussion of the national deficit and debt. He points out as many have before the myth that the debt is growing because of massive growth in the U.S Government. It is just not so. He offers a comparison of deficits among past administrations IF we can consider the GDP as a constant vs the up/down that it really is, just like using 2013 dollars to compare prices.
“The fiscal debate in Washington is dominated by things everyone knows that happen not to be true. One of those things is the notion that we have a fiscal crisis, an assertion belied both by the low interest rates at which the Feds can borrow and by the fact that medium-term deficit projections really aren’t that alarming. Another is the notion that our current deficit is driven by a surge in government spending.”
We’ve taken a look here at government employment in the past and the numbers show unequivocally that government has not grown at all; in fact it has gotten smaller over the last four years. Yet we see calls to cut its size, reduce support for programs, and cut back on this “liberal” growth.
This week Mr. Krugman approaches the reasons why. We agree and believe credibility counts. We called out Paul Ryan the day his candidacy was announced. So here is Paul Krugman’s take.
“most of the deficit scolds don’t really care about the deficit; it’s all really about using deficit fears to bully us into downsizing government and tearing down the safety net. Remember, three of the leading deficit-scold organizations gave Paul Ryan an award for fiscal responsibility even though anyone who understood numbers could see that his plans would actually increase the deficit; and David Walker endorsed Mitt Romney despite his budget-busting proposals on taxes and military spending.”
So where are we? Back where we started this blog in that we, all of us, need to look for reality. Question those cute little soundbites to see if the facts come forth or most likely, they fall apart unsupported. Meanwhile, let’s not hack away at the government safety net until economic growth proves significant. We just might get right back to where the recession started.
Today we see another debt ceiling plan from legislators: “ Republican lawmakers are preparing to introduce legislation to direct the U.S. Treasury to make interest payments on U.S. bonds first and then prioritize other government outlays in case Congress does not raise the debt ceiling.” But let’s not mince words here; this is a plan to protect the wealthy while playing a game of chicken with the remainder of the country.
First and foremost they are fighting over paying the bills they, the legislators themselves, have already voted to pay. But the real message here is the priority. Stating the intent to pay the interest first and dole out the remainder as they are able simply insures the wealthy investors will get their share while retired vets, homeless, and other programs (investments) for the needy or uneducated get to stand in line. Meanwhile these clowns keep holding the government hostage while arguing over the fictional debt ceiling.
Could this work? Not a chance unless of course your only goal remains the same political power play we’ve seen for the past four years. Even GOP members argue against. “Prioritization is impossible,” said Tony Fratto, who was deputy press secretary for Bush and a spokesman on economic policy. “Is the government really going to be in the position of withholding benefits, salaries, rent, contract payments, etc., in order to pay off Treasury bondholders?” But Fratto even goes further and mentions the political fallout mentioning the word “catastrophe,”
And then there is Keith Hennessey, Bush’s National Economic Council director, who too mentions how bad an idea it is as well as the fact it being an unworkable concept. “Payment prioritization doesn’t stop payments, it just delays them. Then the aggrieved party sues the government, and probably wins, and it turns into a bloody mess,” Hennessey is now an economist at Stanford.
Another crazy plot to delay making a decision with the poorest of Americans absorbing the cost and the wealthy have their interest paid by their political hand puppets.
This weeks discussion following the Fiscal Cliff Deal are getting even stranger. Just when we may have thought we’d heard it all over this needless struggle, the quotes of the week prove we have not.
Remember first the debt ceiling is not an issue as it is described by the media and many in Washington. I mentioned last post and it’s worth mentioning again “the U.S. Constitution, 14th Amendment reads the U.S. “debt shall not be questioned”.” But his week we see quotes making the point even stronger. Senate Republicans’ budget chief: “I think it should be a firm principle that we should not raise the debt ceiling until we have a plan on how the new borrowed money will be spent,” Alabama Sen. Jeff Sessions told the Washington Examiner on Tuesday.
Here is the crux; while Senator Jeff Sessions wants a plan as to how the money is spent he apparently forgets about the Congressional Record. Yes it’s all there, the plan, complete, and detailed. Every government program, every government expenditure, past, present and projected well into the future are laid out in what Congress itself has already passed and funded i.e. already approved by both congressional bodies and signed into law by the President per the U.S. constitution. That is how it works, the plan.
There is always a bit more relating to the Senate and the wrangling within so I’ll also point out the Senate has largely ignored much of their responsibility for now almost four years. The last budget actually passed by this distinguished body was 1,352 days ago today, while the law requires them to pass a budget annually. Clearly they are quite used to ignoring the constitution.
Next we have: “It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country,” Texas Sen. John Cornyn, Republicans’ No. 2 in the Senate, wrote last week in the Houston Chronicle. “President Obama needs to take note of this reality and put forward a plan to avoid it immediately.” Laying the need for a “plan” on the Executive Branch, In fact he’s telling the President to “put forward a plan”.
What we’re really hearing is but one of two things: Either these ‘leaders” are forgetting their and their legislative bodies’ votes and responsibilities per the Constitution; Or they are telling the Executive Branch to ignore what is already passed, funded, approved, and signed into law, i.e. the plan. Either way, it’s a clear game of passing the buck.