The Verdict is In: Deficits Don’t Matter

Summary

The article criticizes the Republican tax bill for disproportionately benefiting the wealthy, increasing the deficit, and contradicting past Republican stances on fiscal responsibility, while advocating for using deficits to fund initiatives that benefit the broader population.

Abstract

The passage expresses deep concern over the recent tax reform bill passed by the Republican-led Senate, which is seen as a boon for the wealthy amidst record income and wealth inequality. Despite a relatively stable economy with low unemployment and potential for growth, the bill is projected to add $1.5 trillion to the deficit over a decade. The author notes the irony in the Republicans' sudden disregard for deficits, having previously used them as a political tool. Instead of tax cuts for the rich, the article suggests alternative uses for the funds, such as eliminating public student loan debt, increasing Social Security benefits, and providing free tuition to public schools. It argues that deficits are not inherently problematic if the resulting private surplus benefits the working and middle classes. The author calls for a shift in policy-making, emphasizing the need for bold ideas to invest in the true drivers of the economy—workers—and to move towards universal healthcare, infrastructure rebuilding, and a federal jobs program. The article concludes by urging progressives to learn from the Republicans' approach to deficits and to push for transformative policies that improve the lives of ordinary Americans.

Opinions

The Republican tax bill is seen as detrimental, exacerbating wealth and income inequality.
The tax cuts are unnecessary for economic stimulation as corporations already possess excess cash.
Trickle-down economics is theoretically flawed and has historically not delivered its promised benefits.
The Republican Party has hypocritically abandoned its previous concerns about deficits and the national debt.
The tax bill is criticized for being essentially a handout to the wealthy with minimal middle-class benefits.
The article advocates for using the $1.5 trillion that would be added to the deficit to eliminate student loan debt, secure Social Security, and fund free public higher education.
The author believes that the focus should be on the purpose of deficits rather than their size, with an emphasis on benefiting the working and middle classes.
The "debt crisis" is described as a political tool that has stifled progressive policy-making.
The author suggests that the government should not be constrained by deficits when it comes to creating money to fund essential programs and services.
The article calls for a rejection of austerity politics and for the adoption of bold policies that invest in the economy's true drivers, such as a federal jobs program and universal healthcare.
It encourages progressives to use deficits strategically for the public good when they regain control of the government.

The Republican tax bill is the nail in the coffin.

Last Friday, the Republican-led Senate passed a horrific tax reform bill that will disproportionately benefit the wealthy in this country. This comes at a time when the United States already faces the greatest income and wealth inequality in history. This bill, or the one the House of Representatives passed will only exacerbate the wealth and income gaps.

Outside of these inequalities, the economy is in fair shape. Unemployment is low and growth is starting to pick up some. Companies are sitting on record amounts of cash so there is no need for a stimulative tax cut for the richest Americans. Why would big corporations suddenly create even more jobs when they already have tons of excess cash laying around? Logically and theoretically, trickle down economics has never worked.

Multiple analyses have shown that this bill will add as much as $1.5 trillion dollars to the deficit over the next decade. That’s a lot of revenue the government is giving up. The sad part is that the money will just end up in the pockets of the wealthy.

What is most striking is how little the Republicans seem to care about deficits and the national debt now. The previous eight years, they sought to hold the government hostage over the debt. Unsurprisingly, they left their fiscally responsible principles behind. And I’m glad they did. Hopefully, the Democrats do not stoop to the same level as the Republicans and oppose the bill based on the addition to deficits. Attack the actual policy, which is essentially a handout to the very wealthy with very little benefit to the middle class, especially in higher taxed states. Democrats should offer alternative visions to this tax bill in response.

How about instead of cutting tax revenues by $1.5 trillion, we keep the money and we wipe out public student loan debt? It just so happens to be around the same amount of money. We could solidify Social Security for years to come by increasing benefits for retirees. We can invest in higher education for all by providing free tuition to public schools.

Imagine the jolt to the economy if we wiped out student loan debt, which holds back so many prime-aged Americans from buying a house or making other big purchases that drive the economy. It would open so many opportunities for millions of college graduates. And providing more assistance for current and future students would do the same.

It seems the political class and media elite are finally coming to the realization that deficits don’t matter all that much. We’ve seen yearly deficits over $1 trillion at times and here we are with low interest rates still and inflation well under control. What matters is not the size of the deficit but rather, what we use our deficits for. Remember, a public deficit is equal to private surplus. We need these surpluses to go to the working and middle classes.

A public deficit equals a private surplus.

A fake debt crisis has held back policy-making for a long time. We need big ideas more than ever in the United States before the wealthy truly have everything. Let’s not use our deficits to line the pockets of executives. Instead, we need to invest in people who truly drive the economy — workers. We can create a federal jobs program to ensure everyone who wants a job can get one. We can start a program to relieve millions from crushing student loan debt. We can finally move to universal health care through a single payer system. We can rebuild the nation’s infrastructure and upgrade to the latest technology. In the words of the 2008 Obama campaign: YES WE CAN.

Alan Greenspan let the cat out of the bag back in 2005 in response to a Paul Ryan question over the solvency of social security,

I wouldn’t say the pay-as-you-go benefits are insecure in the sense that there is nothing to prevent the Federal Government from creating as much money as it wants and paying it to somebody. The question is, how do you set up a system which assures that the real assets are created which those benefits are employed to purchase?

We must learn from the precedent the Republicans have now set that deficits don’t matter. No more compromising with the other side because of deficits, like the Democrats did while they were in power. The Democrats sabotaged their own efforts when they had control of all branches of government by insist everything was “paid for” or deficit neutral. This only held back the recovery of the economy and left us with a less than ideal health care system.

Moving forward, we aim for big ideas that can help ordinary Americans obtain a better life. Budgeting and deciding what we spend on is a set of ideals for each party and for the country. It’s been far too long since we attempted new policies and ideas. It’s easy to get down over the Republican-led government at the moment but be ready when progressives take back the country to use the deficits for good.