It’s no accident that our nation’s debt as a percent of Gross Domestic Product (GDP) started to climb precipitously in the 1980s.
April 5, 2011 –– As President Obama meets with House and Senate leaders today to try to find some way to avoid a government shutdown at week’s end, current polls are showing that the same percentage of Americans blame Democrats for gridlock on the budget process as blame Republicans. So, neither party has an obvious political advantage for this budgetary brinkmanship. Notwithstanding, the Tea Partiers must be absolutely ecstatic seeing how much influence their party favorites are having on this process. If the facts were known, however, if sensible voters in both parties understood just why we have a deficit in the first place and who it is that will benefit from all the proposed cuts in government spending, maybe it would be different.
So, before we start cutting essential programs to balance the budget for next year, let’s see why it is that we have a deficit and a debt problem. It actually has little to do with fiscal measures taken to respond to the recent recession. Despite what Speaker Boehner says, it’s not a spending problem as much as it is a revenue problem, and the problem has been with us for decades.
Pay particular attention to the last couple of seconds of animation on the last graph in this video showing the accelerated growth of gross national debt and when this accelerated growth began. It moves pretty quick.
It’s no accident that our nation’s debt as a percent of Gross Domestic Product (GDP) started to climb precipitously in the 1980s. Government started receiving diminished revenues owing to Reagan Era tax cuts while, at the same time, started borrowing more and more to sustain increased defense spending and growing demands on entitlement programs by maturing baby boomers. Promised increases in revenues from an expanding economy never truly materialized. What little increase was realized from this tax cut stimulus (trickle-down economics) evaporated with new government subsidies and tax loopholes for corporations. Deficits then continued owing to the Bush-Cheney individual income tax cuts that overwhelmingly favored the wealthiest of Americans and borrowing to fund the wars in Afghanistan and Iraq.
Today, our tax code is full of loopholes created and exploited by big corporations. They, in turn, spend millions that they don’t pay in taxes to control our government with their army of lobbyists found on K Street in Washington.
Yes, do tell Congress to balance the federal budget and pay down our national debt. But tell them not to do it on the backs of our most vulnerable citizens. Tell them not to do it at the expense of our nation’s health and safety. Tell them not to do it and forego infrastructure and technology investments needed for a brighter, more competitive America. The right way to balance the budget and reduce our nation’s debt is to get corporations out of our nation’s business, reform election campaign financing, and restore the middle class subsidizing real people, not corporations.
Feel free to comment whether you agree or not.