At some point someone will announce, in dire tones, that we have a ONE TRILLION DOLLAR deficit.
No, I don’t think the people making this pronouncement realize that they sound just like Dr. Evil in the Austin Powers movies. ...Paul Krugman, NYT
"At some point someone..."? Someone? We're talking about the irresponsible group in our media. We don't have a trillion problem. What we do have is the Evil League: the potent fighting force made up of irresponsible media and irresponsible politicians on the right -- so far to the right they've left off being right. They don't give a damn about trillion dollar deficits if those deficits arise after they've spent the money on their favorite causes: lower taxes for the corporations and people with private wealth who fund the radical right and the Republican party. What they're trying to stop is spending money on the other 90% of Americans who pay into the Treasury.
Here's the hard argument -- the facts about the deficit and what caused it:
First of all, the weakness of the economy has led directly to lower revenues; when G.D.P. falls, the federal tax take falls too, and in fact always falls substantially more in percentage terms. On top of that, revenue is temporarily depressed by tax breaks, notably the payroll tax cut, that have been put in place to support the economy but will be withdrawn as soon as the economy is stronger (or, unfortunately, even before then). If you do the math, it seems likely that full economic recovery would raise revenue by at least $450 billion.
Meanwhile, the depressed economy has also temporarily raised spending, because more people qualify for unemployment insurance and means-tested programs like food stamps and Medicaid. A reasonable estimate is that economic recovery would reduce federal spending on such programs by at least $150 billion.
Putting all this together, it turns out that the trillion-dollar deficit isn’t a sign of unsustainable finances at all. Some of the deficit is in fact sustainable; just about all of the rest would go away if we had an economic recovery.
And the prospects for economic recovery are looking pretty good right now — or would be looking good if it weren’t for the political risks posed by Republican hostage-taking. ...Krugman, NYT
If you fall for the "trillion dollar deficit" scare, you're doing one of two things -- neither of which is a sign of intelligence. Either you're a member of the far right club -- in which case you've already decided to indulge in fantasy. Or you're easy to fool.
We do indeed have a big budget deficit, and other things equal it would be better if the deficit were a lot smaller. But other things aren’t equal; the deficit is a side-effect of an economic depression, and the first order of business should be to end that depression — which means, among other things, leaving the deficit alone for now.
And you should recognize all the hyped-up talk about the deficit for what it is: yet another disingenuous attempt to scare and bully the body politic into abandoning programs that shield both poor and middle-class Americans from harm. ...Krugman, NYT
Dr. Evil is alive and well and looking for more fools who, each time they fall for the hype, are acting against their own best interests and the interest of their country.
