Monday, January 14, 2013

Fiscal Shmiscal!

Utne Magazine reviewed The People’s Guide To The Federal Budget by Mattea Kramer,  in the latest edition. Reviewer Sam Ross-Brown said: “The crash [of 2008] seemed to vindicate what conservative commentators had been warning about for years: the US debt was unsustainable, and sooner or later, the economy would be punished for it. But then a weird thing happened. Just as the market was crashing, high demand saw prices on US Treasuries jump. If US debt was unsustainable, why were investors buying up more” of it?


The 2011 debt ceiling debate, most of the so-called ‘fiscal cliff’ discussions and most of the fiscal rhetoric in general, especially on the Republican side, is “rife with misinformation about government spending, economic policy and exactly what it means for Washington to be in debt.” When Uncle Sam is in debt, it’s not like when you and I are in debt. Analogies and metaphors comparing Federal debt to personal debt are incorrect, misleading and dangerous.


The facts are that “as a share of the total economy, our debt levels have historically been much higher [and] corporate tax rates in the US are among the lowest in the world [and] many prominent economists have been calling for an increase in US debt to stimulate recovery.” More popular understanding and involvement is needed to dispel the misinformation and get these facts and others into the public discourse. “Ideally,” Barbara Ehrenreich wrote in her forward, “the federal budget should be an expression of our collective values; something owned and shaped by all of us.”

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