What to say to a Republican who complains about the federal debt - by ROBERT REICH

Found here. Our comments in bold.

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One can be sure that if a leftist is going to explain something, it will not be accurate, it will not clarify, and it will not be intended to impart information.

That's because leftists like Dr. Reich are only interested in The Narrative, that is, the talking points and bumper sticker slogans promulgated by Central Command. The Narrative is circulated throughout the media landscape every day, and writers, commentators, and news operations dutifully regurgitate it.

So Dr. Reich pretends to be a truth teller, but he's simply doing his duty to repeat The Narrative, spouting agitprop in service to The Agenda. The Agenda is the dismantling of the system. The system, being racist, unfair, and hurtful to the worker and minorities, must be replaced. 

But in actual fact, none of these issues are important to the Left. They are simply excuses for advancing the leftist dream. So, nothing you will read below will be true, accurate, logical, or helpful. 

This article is The Narrative, which facilitates The Agenda. The reader should keep this in mind at all times.

The left is obsessed with other people's money. They want it. They spend it. The problem has always been spending: 

Last year, the federal government took in a record $4.9 trillion in revenue, more than triple the $1.58 trillion the government collected just 25 years earlier (1997)....

That’s an average increase of more than eight percent a year, far more than the rate of inflation (which has averaged 2.4% annually over the past 25 years) plus the increase in the U.S. population (roughly 0.7% annually). The total of all economic activity in the United States per year (GDP) is currently $26.1 trillion, which means the federal government now claims nearly one-fifth (19.6%) of all dollars for itself, a much higher rate than the long-term average of 16.5 percent.

But Dr. Reich thinks the government simply needs more money. And it's the rich who unjustly possess that money. It's a familiar Marxist theme.

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Friends,

Republicans are attacking Biden for expanding the federal debt, and the House “Freedom Caucus” is livid that Speaker Mike Johnson has agreed to more funds for Ukraine, claiming it will expand the debt even further.

Can we just have some sanity here?

The federal debt is a problem. (But... Dr. Reich defends the debt as necessary.)

This year, the United States will spend about $870 billion, or 3.1 percent of gross domestic product, on interest payments on the debt. That’s more than the entire defense budget.

But take a closer look.

The major reason for the huge federal debt is Trump’s and George W. Bush’s tax cuts, which together added $10 trillion to the debt since their enactment. They’re responsible for 57 percent of the increase in the ratio of the national debt to the economy since 2001. (Um, no. Let's take a look at the numbers:

Take a close look at the receipts. The reader will notice that revenues have almost always increased. Is there any indication of a revenue problem anywhere, excepting the 2008 crash? Revenues went up during Reagan, after he fixed the Carter "malaise." Revenues went up during Bush. Trump's revenues went up as well, even through COVID.

Now take a look at outlays. Notice that spending has rarely decreased. In actual fact, spending has always increased faster than receipts. Always. 

Dr. Reich thinks there's a problem with the national debt and it is caused by tax cuts. However, if tax cuts actually reduced receipts, we would see it in the charts. But we don't. 

The problem has been, is, and always will be, spending.)

Excluding the one-time costs of responding to Covid-19 and the Great Recession, the Bush and Trump tax cuts account for more than 90 percent of the increase in the debt ratio. (No, Dr. Reich does not get to arbitrarily exclude spending. Tax cuts do not increase debt, spending does. Spending. Period.)

Most of the benefits of those tax cuts, not incidentally, have gone to the rich: 65 percent of the benefits of the Trump tax cuts have gone to the richest fifth of Americans, 22 percent to the top 1 percent. (Tax cuts always benefit those who actually pay taxes.)

And as the federal debt has risen, most of the interest payments on it have gone to the rich, too. Wealthy investors park their savings in treasury bonds directly or indirectly held by mutual funds, hedge funds, pension funds, banks, insurance companies, personal trusts, and estates. (??? This is an odd claim. The government finances its debt by selling bonds. Bonds pay interest to the purchaser, which means the purchaser receives a return on his investment. Otherwise he wouldn't buy the bond.

Anyone can buy government bonds. The interest gets paid to people who own the bonds. Whomever owns the bonds gets paid interest. That's the way bonds work. And people with lots of money might buy lots of government bonds, while people with no money don't buy bonds at all. 

Dr. Reich turns this into a class warfare issue by insinuating that the rich are unjustly benefitting from government debt. This is astoundingly vapid.)

Decades ago, wealthy Americans financed the federal government mainly by paying taxes. (Decades ago the government wasn't burning through cash like a drunken sailor on shore leave.

This was because deficit spending was regarded as irresponsible. But as government increased in power it its hunger increased for revenue. This is an inevitable result of government's incremental slide into Marxism.)

In the 1950s, the top marginal tax rate on the wealthy was above 90 percent. Even including all tax credits and deductions, it was higher than 50 percent. (Dr. Reich falsely attempts to connect tax rates to government spending philosophy.)

Since the Reagan, Bush, and Trump tax cuts, though, wealthy Americans have financed the federal government mainly by lending it money and collecting interest payments on those loans — profiting when the rest of us pay them back. (Take another look at the above chart. Again, does the reader see any indication that there's a revenue problem? Nope, it's a spending problem.)

Which means a growing portion of everyone else’s taxes are now paying the rich interest on those loans instead of paying for government services everyone needs. (He repeats his specious point.)

So the next time you hear Republicans complain about the federal debt and our swelling interest payments on it, remember that: (1) the debt has grown mainly because of Republican tax cuts, (2) those cuts have mostly benefited the rich, (3) the rich are now the major recipients of interest payments on that debt, (4) and those interest payments are crowding out spending on child care, elder care, affordable housing, better schools, paid family leave, and everything Americans need. (Dr. Reich punts on the real cause of the debt: Profligate spending.)