4 Ways the Austerity Obsession in Washington Could Cost You Your Job
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4. The deficit hawks are delusional
Serial hostage taking is a truly inane way to run a government. What is striking, however, are the purblind delusions about deficits. We're forced to these measures, Republican Rep. Paul Ryan says, because deficits are out of control and will soon, eventually, sometime lead to America becoming Greece, with the dollar losing all value. It is a testament to the depths of his delusion that Ryan has been saying this for years, despite all evidence to the contrary.
The reality is the reverse. Ryan prides himself on his Ayn Rand devotion to free markets, but he's ignoring what the markets are saying. Out of control inflation hasn't broken out. Investors are not panicked. They are still willing to park their money in U.S. bonds for essentially no real return. Investors are saying that America isn't Greece; it's the rock of Gibraltar.
One reason is that the deficit isn't out of control. As the Congressional Budget Office reports, the annual deficit is down by 25 percent since 2009.
It is coming down faster than any time since the demobilization at the end of World War II. Our median term debt is essentially stabilized as a percent of GDP. Our long-term debt projections are completely a question of fixing our broken health care system.
The pace of the decline of annual deficits already exceeds prudent speed limits, contributing to faltering and inadequate jobs growth, leaving Americans struggling with mass unemployment, increased insecurity and declining wages. The major threat to declining deficits is an economy that stalls and goes back into recession. And that is exactly the warning that is flashing from the last quarter's decline.
Calm the austerity hysteria
The unexpected bad news from last quarter is a stark warning. Americans cannot afford the deficit delusions afflicting Washington. Republicans can only do damage if they continue to hold the economy hostage to force cuts in vital security programs like Social Security and Medicare. Democrats should reassess their austerity agenda.
We need a return to sensible governance. Repeal the sequester -- sudden and deep across the board cuts are idiotic. Promise to pay the debts already incurred and stop threatening a default that would shake global finances. Fund the government while working on a budget reflecting new priorities.
Commit to growing our way out of the hole we are in. Invest in areas vital to our economy and to our people. Pay for those commitments in ways that makes sense. Put people back to work and watch the deficits and debt burden come down.
That means launching a major five-year initiative to Rebuild America -- modernizing our decrepit infrastructure to make it a competitive advantage while creating jobs. Make the investments needed to provide every child with a world-class education -- from universal pre-school to skilled teachers to affordable college. Invest in research and development and sustain America as the global hotbed of innovation.
Pay for these and other vital priorities by ending the war in Afghanistan and reducing our empire of bases. Crack down on overseas tax dodges. Raise taxes on millionaires and tax the income of investors at the same rate as that of workers. End the obscene subsidies to big oil, big Pharma and big Agra.
This isn't rocket science. It is common sense. Yet, at this point, it can't be heard in the bedlam of a Washington afflicted with deficit delusions and austerity hysteria.