The Federal Budget
I don’t know if you follow the debate about the Federal budget, but to not know something about it requires one to watch the Disney channel or TV Land most of the time. I read a lot of “news” and “opinion” on the web so I get my updates on Congress and the Federal Gov though several media sources some of which are in Europe because I find it interesting what that part of the world thinks about our country. Paul Krugman writes for the New York Times and always has an interesting idea and argument about budget matters and because he is an economists, his thoughts are well organized and he weighs many, many variables in his writings about all things dollar related. When it comes to the federal budget and understanding the deficit vs. GDP vs. taxes vs. spending one of the best things I’ve heard and read recently was that thinking of the federal debt and solving the debt problem like one would their own personal indebtedness is the wrong way to think about and solve the debt of our nation. Contrary to some thinking we cannot debt snowball our way out of our situation nor can we “budget cut” our way out of this crisis. Now, there is a lot of talk about passing this debt on to our children and fear that our nation will end up like Greece without the recognition, or understanding, that our economy and their economy are based on a different system. Ours is a consumption economy that is not consuming in the same way to reward those that bet on high levels of consumption. One would think that in a consumption based economy business and government would make it easier for consumers to “consume” and one way to do that would be to, on the nation’s credit card, “give” the 98% money that would circulate into the economy again and drive the demand that consumption economies need. What would you do with $10-$25 thousand dollars that were tax free? We are, my companion and I, working to consume less which means we are not supporting the consumption economy at levels that would help it become healthy again. We buy the things we need rather than the things we want. As a side note, what is disappointing is the number of “Christians” that have forgotten God’s preference for the poor and that Jesus lived more as a socialists than a capitalists. His was an argument with how culture was organized and how religion supported that unjust system. It’s an argument that continues to be relevant today, but one would not know that by listening to the TV personalities of conservative, evangelical, and orthodox Christianity representing Protestants and Catholics today.
The debt this nation currently carries is rooted in former President George W. Bush waging war on the nations credit while lowering taxes more than President Obama’s stimulus package, which is improving the roads here in Oklahoma, or the Affordable Health Care Act. Bush’s tax plan extracts money upward while the Republican party argues that wealthy people and corporations are “job creators” and those dollars will “trickle” down to the 98%. That’s an over simplified explanation that I think rightly describes one point of view. I would like a serious news organization to study what “wealthy” means in 21st century America? I think it means an economic level where money is working for you more than you are doing physical work. I think it means being in an economic position where no matter what the stock market does you will live comfortably out of your bank account. Are you wealthy?
Paul Krugman is helpful in his latest article about the “fiscal cliff” and the impending battle of the debt ceiling and the federal budget. For my part, I’m going to read a few notes from an MIT economics class and get better educated about micro and macro economics, GDP, and some history to help my understanding of our context. That’s the only way I know to speak intelligently and be part of a solution that enables my mother-in-law and my parents to keep the social security and medicare benefits even it if means that it won’t be around when I become their age. Honestly, I thought it would have imploded by now. Here is a paragraph or two and a link.
Battles of the Budget
Paul Krugman | The New York Times | January 3, 2013For the reality is that our two major political parties are engaged in a fierce struggle over the future shape of American society. Democrats want to preserve the legacy of the New Deal and the Great Society — Social Security, Medicare and Medicaid — and add to them what every other advanced country has: a more or less universal guarantee of essential health care. Republicans want to roll all of that back, making room for drastically lower taxes on the wealthy. Yes, it’s essentially a class war.
According to the normal rules of politics, Republicans should have very little bargaining power at this point. With Democrats holding the White House and the Senate, the G.O.P. can’t pass legislation; and since the biggest progressive policy priority of recent years, health reform, is already law, Republicans wouldn’t seem to have many bargaining chips.
But the G.O.P. retains the power to destroy, in particular by refusing to raise the debt limit — which could cause a financial crisis. And Republicans have made it clear that they plan to use their destructive power to extract major policy concessions. Click here to read more.