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In what is just the most recent example of The Big Lie at work (that the Govt's finances are just like your personal finances and that deficit spending is inherently inflationary), Senator Warren has provided a perfect example of the kind of terrible political choices that Dems must make when they accept the Right Wing framing on deficits. Both Cons and Dems agree on the ridiculous proposition that deficits are actually harmful to the economy and nation. The Cons want to cut spending to reduce the "harmful" deficit and Dems want to increase taxes to reduce the "harmful" deficit.
What is the deficit? The Federal deficit is simply the difference between the amount of money the Govt adds to the economy through spending and the amount of money that it withdraws through taxation. Thats it, not complicated.
So why would Warren and Obama support a policy that has absolutely no chance of passing Congress? Thats easy, they want to make the Cons look bad by choosing rich people over students. The problem with this position is that we don't need tax revenue from rich people in order to spend on socially beneficial programs. The US Dollar comes from the US Govt, not rich people and not from China.
Lets set up a very simple logic chain and analyze Warren's proposal:
1) The US Govt issues the US Dollar. The ability of the Dollar creator to issue (spend) dollars is obviously infinite.
2) The more educated the populace the better
3) High debt loads and tuition are bad for students and the nation
I feel pretty confident that these three assumptions are broad enough to be roughly agreed upon by rational participants.....
So why does the Govt want to make a profit off of students by lending them money instead of just giving them the education?
What do rich people have to do with higher education? Rich people dont add much to inflation from a demand-pull side so if you think spending $60-$100 billion more per year to give every person a chance at a higher education would be too inflationary, raising taxes on millionaires wont solve that problem.
Why is it more important for Dems to show that Con policy favors the rich than it is to actually help the country and our students?
Please, can some of my fellow progressives explain to me why they included the Buffet rule poison pill that guarantees the failure of what is just a marginally better policy than our current student loan policy?