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View Diary: Paul Krugman asks if the election will be honored (266 comments)

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  •  Check out his chart Anne ElK (7+ / 0-)

    The national debt argument is a chimera.  It is simply a hammer used by the Right to dupe the middle class into accepting cuts to our small safety net.  Check out this chart,

    Go to the next to last column.  It is percentage of debt to GDP.  Go to 1946 and check out the percentage.  When the U.S. demobilized from WWII the percentage was 121.7 which meant that the U.S. owed more than the economy could produce in that single year.  Check out how the debt was reduced throughout the years to only 32.5 % in fiscal year 1982 when the Reagan Budgets took hold.  During the period of "tax and spend" New Deal and Great Society liberals were expanding social programs, the debt was steadily reduced.  this was done with out austerity, and until JFK the median taxpayer paid ZERO federal income taxes.  This was done mostly by a policy of having the federal government ensuring full employment.

    The debt begins exploding when the Reagan Republicans adopted "voodoo economics" and put everything on the nation's credit card while they enacted neoliberal reforms designed to redistribute wealth upward.

    Clinton come in and appeases the bond market but with the full employment of the American workforce leaves office with a $236 billion surplus and the national debt is scheduled for extinction by 2010.  Yes you read that right.

    Bush II and Cheney states that "deficits don't matter," and they go about aggressively proving that.  The economy implodes, but "due to debt constraints," Obama pivots away from stimulus and jobs to the deficit and the Tea Party sweeps to power in the off year elections.

    I suggest a return to the pinnacle of New Deal Political economy which was policies designed for full employment, progressive taxation, and moderate deficits or balanced budgets which grow the economy and reduce the relative size of the debt.

    "The working class mind is strange and unpredictable" -- Ty Lookwell

    by Illinibeatle on Mon Oct 01, 2012 at 06:01:50 AM PDT

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    •  Thank you. I do understand that. (0+ / 0-)

      But I would argue that there are some structural changes that make a simple return to the New Deal very difficult, perhaps impossible, although obviously we need to go some in that direction. The first problem is us baby-boomers. We are all retiring and Social Security over the next 30 years is going to be paying out a lot more than ever. Add in Medicare and you have quite a prolonged burst of budget-draining expenditures. Second, at a time when we need a really educated workforce, we don't really have one. Only 4% of college graduates have science or engineering degrees, compared to 30% in China. Add to that, the fact that a new wave of super-automation is on its way into our economy that will dispense with many manual jobs. Essentially, any repetitive job in this economy has a robot's name on it. One of the worst habits of economists is their tendency to assume that tomorrow is just a shinier version of yesterday. That may have been true yesterday but today's economy is quite a different beast and tomorrow's will be utterly transformed for most people.

      For if there is a sin against life, it consists perhaps not so much in despairing of life as in hoping for another life and in eluding the implacable grandeur of this life. - Albert Camus

      by Anne Elk on Mon Oct 01, 2012 at 09:02:03 AM PDT

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      •  Return? We haven't left the new deal yet! (0+ / 0-)

        Have some respect.  You are rather sanguine about those persons dependent on government social insurances.  The entire working class baby boomers and several successive generations beyond has already paid into the system all their working lives.

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