Imagine you live in the suburbs and the residence next door is sold. The new owners raze the old cottage, build a McMansion and party 24/7. The neighbors complain about the noise but nothing is done until the house is trashed. Then your city council declares the dwelling a hazard and demands that you and your neighbors clean it up. Unfair? Of course, but that's what has happened in the US, where the rich and powerful had a decades-long party and trashed the economy. Now Republicans want average citizens to pay for the repairs.
Recently New York Times columnist David Brooks wrote an emotional column, "National Greatness Agenda" imploring Americans to come together and fight for our country. Why? The deficit: because the US is "careening toward bankruptcy." Not surprisingly, conservative Brooks has swallowed the conservative orthodoxy hook, line, and sinker. He thinks our big problem is the US deficit. But it's not.
The real problem is that our economy was broken by thirty years of failed Republican economics. During the Reagan presidency conservative ideology began to dominate American political discourse: helping the rich get richer would inevitably help everyone else, "a rising tide lifts all boats;" markets were inherently self correcting and therefore there was no need for government regulation; and the US did not need an economic strategy because that was a natural consequence of the free market. As a consequence, America's working families were abandoned in favor of the rich. Good jobs were shipped overseas. Inequality rose as middle class income and wealth declined. Corporate power increased while unions were undermined. CEO salaries soared but fewer families earned living wages. Then the Bush administration cut taxes while initiating an unnecessary war in Iraq. It was thirty years of economic ineptitude.
Republicans fractured the US economy because they forgot an elemental truth: our economic heartbeat requires steady consumption by working Americans not the random largess of the rich. Now, confronted with the consequences of their bad judgment, the GOP wants us to focus on the massive deficit and not consider what caused the crisis.
What David Brooks and other conservative columnists are afraid to admit is that the Reagan administration initiated a thirty-year-long war on democracy. During the Bush administration, plutocrats won and built McMansions. But the victory of corporate CEOs and Wall Street money grabbers left the American economy in shambles. Now Republicans want average Americans to pay to fix it.
Many Americans don't understand this outrage because conservatives have seized the economic message initiative and wrapped it in the sacred mantle of bipartisanship. Well-meaning folks like NoLabels.org want Americans to come together and shovel money into the deficit pit. Most of the political air space is dominated by faux deficit hysteria.
David Brooks and other deficit hawks ignore a commonsense rule: in order to solve a problem, you have to first understand what it is. The deficit isn't the problem; it's a symptom. The problem is that America doesn't have enough decent jobs. If more Americans had good-paying jobs then our economy would be healthy and we'd be generating enough tax revenue to erase the deficit. (The same conclusion was reached by members of the Citizens' Commission on Jobs, Deficits and America's Economic Future.)
So what should we do? Conduct radical surgery on the economy.
First, there has to be a massive redistribution of income by increasing taxes on both the wealthy and corporations -- particularly financial institutions that profited from 2008's financial meltdown. The guys who built the McMansions should pay for the repairs. That's why it's ludicrous to continue Bush-era tax cuts for the rich.
Second, there has to be another stimulus package that not only supports America's teachers and public safety workers but also strengthens the US infrastructure, in general. For a period, Government needs to become the employer of last resort in order to retrain workers and pump money into the economy, motivate working Americans to consume again. This is why Congress has to extend unemployment benefits for those whose eligibility has lapsed.
Third, the Federal government has to be involved in economic policy. The last thirty years has demonstrated that the free market follows the path of least resistance and dictates economic policy solely based on greed. Creating wealth for a handful of CEOs isn't consistent with the national interest. What are needed now are economic policies that produce decent jobs for average Americans.
Finally, and most important, Liberals must seize the message initiative. Conservative columnists like David Brooks have negatively impacted millions of Americans. Liberals have to take back the political narrative and tell the truth about what's wrong with the economy and what political action is needed.
It's time to talk common sense to Americans. The conservative politicians and rich folks who broke the US economy should pay to fix it.
The Democrats controlled the House and Senate for 4 years and sat on their thumbs while they watched the biggest economic collapse in generations unfold.
The federal budget deficit was 1.14% of GDP in 2007 when the Democrats took control of Congress. Four short years later it is now 10.64% of GDP
And you come here and cry about the Republicans breaking the economy !!
Last of all your comment regarding the level of the deficit to GDP in 2007 to the present is really quite irrelevant because the crisis and the federal government's attempts to deal with it during both the latter stages of the Bush Administration and the current one caused the deficit, and its like comparing dogs and cats. You might criticize the author for being partisan, but you can't criticize him for being clueless. You however, we can criticize for being both.
Apparently there is plenty of 'cluelessness' to go around....not just the Author, but certain posters that are sad in Ann Arbor...
If that were true, then we wouldn't have had deficits for almost all of the last thirty years. There were plenty of "good-paying" jobs for most all of that time, yet the deficits continued to mount, until today the public debt (not counting future obligations of the federal government) is thirteen million million dollars.
People should stop saying who SHOULD pay but get it thru their thick skulls that they're going to
pay with their jobs,retirement funds and childrens future.
The Irish have finally woken up to the fact that every Irish citizen must come up with a combined
total of 17.5Bn euros out of their retirement pensions to pay the bankers who made bad bets.
Spain ,Portugal,Italy,France and Germany are next.And somewhere in there in between the FED
using US taxpayer funds in an attempt to bailout foreign nations America gets it's Weimar Republic.
The fleecing of America by a corrupt and captured government who only legislative purpose is to
enrich their associates at the TBTF banks has only begun.
The TBTF banks currently hold over 171 TRILLION in swaps many of which are unpayable.
It is a slow day in a damp little Irish town.
Times are tough, everybody is in debt and everybody lives on credit.
A rich German tourist stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one for the night.
The owner gives him keys, grabs the €100 note and runs next door to pay his debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The farmer takes the money and heads off to pay his bill at the supermarket.
The supermarket owner takes the money and runs to pay his bill at the pub.
The publican pays a lady of flexible virtues. She rushes to the hotel to pay off her hotel room bill.
The hotel owner puts the €100 note back on the counter.
The traveler comes down, picks up the €100 note, saying the rooms are not good enough.
The whole town is now out of debt.
OR: If the publican had no savings, then he still owes the lady E100.
Firstly, the author suggest a massive redistribution of wealth in this country to correct the imbalance which is enabling these economic crises. He's totally right--but I think it's important that this be advanced politically as a practical solution to economic problems, not a punitive measure which he seems to imply. Of course, the ones who 'broke' this economy should pay for it--this should be done by slowly and thoroughly eliminating the 'too big to fail' doctrine which allowed this to happen in the first place, and putting laws in place which provide for proper punishments for these crimes in the future.
The suggestion for another stimulus package is an obvious decision for many economists, but it's a tough sell politically. Obama needs to make it though, and he should concentrate on the message about unemployment subsidies and infrastructure improvement.
The 3rd point talks about the government being involved in econ. policy. It should do this not only by promoting policies, but by ensuring that regulations and laws exist which enact the proper safeguards to our financial markets and banking industry to prevent this from happening again.
The article's 4th point is actually the prerequisite for achieving any of the previous three--until the liberals manage to educate the people on what's really wrong, nothing will be fixed.
I'm similarly disappointed in our President's action so far concerning what I regard as essential policies for this country. As far as that goes, I'm sure we'd have a lot of company--but yeah, good comments.