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Everybody Listen Up! The Deficit Is Actually Shrinking, Despite Beltway Propaganda

94 percent of Americans don't know the deficit is falling.

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Here is Steve again,  “A conversation-ending chart”:

Now, I think it’s probably safe to say deficit hawks are no longer capable of embarrassment, so the chart’s impact is likely limited. That said, there’s a policy point to keep in mind: “Here’s a pretty important fact that virtually everyone in Washington seems oblivious to: The federal deficit has never fallen as fast as it’s falling now without a coincident recession.”

Got that? Every time the nation has reduced the deficit this much, this quickly, economic growth suffers to the point that the economy actually shrinks.

Role Of Media In Democracy

Isn’t it the media’s job to inform the public, not misinform the public? Isn’t correct, accurate, objective information necessary for the proper functioning of a democracy?

What does it say about  our country’s information channels, when only 6 percent of the public knows that the deficit is shrinking? Shouldn’t that be a signal to the media to run headlines for a month informing the public, instead of continuing to scare people that the deficit is going to eat them up?

When only 6 percent of the public knows the facts (the deficit is falling fast, it is just math, not political opinion) about the most serious policy discussion that is occurring, with the most serious consequences for our jobs, standard of living, our future … a 94 percent misinformation rate is so far beyond just media incompetence that it has to be looked at as something else.

Propaganda And Its Policy Consequences

“Blowback” is a term that means propaganda you use against a target comes back and hurts you. Anti-government propaganda has convinced the public that “government takes money out of the economy” and “government is in the way of business.” Other propaganda has convinced people that we have a “deficit emergency.” This propaganda is paid for by billionaires and the corporations that mask them, with a vast apparatus that distributes the misinformation.

The billionaires and giant multinational corporations want to cut their taxes and get government rules out of their way. But now they’re killing the economy that laid their golden egg.

Austerity – budget cuts – hurt the economy. They reduce the pressure to make the wealthy pay their taxes, but they cut economic growth for the rest of us. Europe is engaged in a grand experiment with austerity, and we can see the results. They cut their budgets, their economies decline, less tax revenue comes in the door, and their deficits as a percent of GDP actually go up making the problem worse.

Unfortunately, their leaders think that means they should cut even more. The result has been that their economies decline even more, revenue falls even more, and their deficits as a percent of GDP actually go up, making the problem worse.

Unfortunately … you get the picture. Unfortunately they don’t.

No Deficit Emergency – Repeal The Sequester

So we don’t have a “deficit emergency” or a “fiscal crisis” or an “out-of-control” deficit after all.

But we still have the “sequester” budget cuts starting Friday, and the consequences to our economy are really bad.

Congress needs to just repeal the sequester. They do not need a “deal” to cut something else out of the budget.

President Obama does not need to make a deal involving cuts that will just make things worse. That’s just falling into the Republican framing of demanding cuts as a solution to everything, strangling our government’s ability to make our lives better. From last week’s post,  “Obama Says Cuts Bad, Proposes Cuts”: