Mon Nov 19, 2012, 12:03 AM
cal04 (41,381 posts)
Robert Reich:Why We Should Stop Obsessing About The Federal Budget Deficit
I wish President Obama and the Democrats would explain to the nation that the federal budget deficit isn’t the nation’s major economic problem and deficit reduction shouldn’t be our major goal. Our problem is lack of good jobs and sufficient growth, and our goal must be to revive both.
Deficit reduction leads us in the opposite direction — away from jobs and growth. The reason the “fiscal cliff” is dangerous (and, yes, I know – it’s not really a “cliff” but more like a hill) is because it’s too much deficit reduction, too quickly. It would suck too much demand out of the economy.
But more jobs and growth will help reduce the deficit. With more jobs and faster growth, the deficit will shrink as a proportion of the overall economy. Recall the 1990s when the Clinton administration balanced the budget ahead of the schedule it had set with Congress because of faster job growth than anyone expected — bringing in more tax revenues than anyone had forecast. Europe offers the same lesson in reverse: Their deficits are ballooning because their austerity policies have caused their economies to sink.
The best way to generate jobs and growth is for the government to spend more, not less. And for taxes to stay low – or become even lower – on the middle class.
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Robert Reich:Why We Should Stop Obsessing About The Federal Budget Deficit (Original post)
Response to cal04 (Original post)
Mon Nov 19, 2012, 07:07 AM
durablend (3,457 posts)
5. If Republicans were in power again
We'd never hear another thing about the "deficit"...guarantee that.
Only when Democrats are in power does it matter.