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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.
Friends,
Last Thursday, The New York Times’ lead story was the Congressional Budget Office’s report that the U.S. is on track to add nearly $19 trillion to the national debt over the next decade — $3 trillion more than previously forecast.
“Yikes!” you might say. But calm down. The Times’s national debt story was alarmist nonsense.
“To put those numbers in context,” intoned the Times, (??? The NY Times is a newspaper. It doesn't "intone," because intoning is making a sound.)
“the total amount of debt held by the public will equal the total annual output of the U.S. economy in 2024, rising to 118 percent of the economy in 2033.”
If the Times believes this gives its readers context, I have a bridge in Brooklyn I’d love to sell the Gray Lady.
You want context? Here’s context: (Dr. Reich, oddly, will not refute the supposedly errant claims of the NY Times. Instead, he will go on to provide three reasons it's going to happen.)
The national debt is expected to rise as a percent of the total U.S. economy largely for three reasons:
(1) The Federal Reserve is busily slowing the economy and causing interest rates to rise. As a result, the debt will become larger as a share of the total economy. And a larger portion of the total debt will be paid out in interest. Most of these interest payments will go to wealthy Americans who have lent the U.S. government money (both directly in the form of Treasury bills they’ve purchased and indirectly in all the Treasury bills bought by the funds in which they’ve invested). (In other words, it will happen as a matter of government policy.)
(2) The giant baby-boom generation will soon collect Social Security and Medicare (or has already started to). But boomers (and post-boomers) rely on Social Security and Medicare. They’ve paid into it through their working lives. (There’s a good argument for raising the cap on income subject to Social Security taxes, requiring that people earning more than $400,000 a year contribute more, as President Biden has suggested, but that’s a different issue.) (In other words, it will happen because of huge government programs that are being mismanaged.)
(3) Republicans have slashed taxes on the wealthy, resulting in less federal revenue. Ronald Reagan, George W. Bush, and Donald Trump all reduced taxes on the wealthy (and the corporations on whose stock they collect capital gains). Note that these are many of the same people now collecting interest payments on their loans to the U.S. government. (The dissembling intensifies. Here is a chart of government revenues and expenditures:
If the Times believes this gives its readers context, I have a bridge in Brooklyn I’d love to sell the Gray Lady.
You want context? Here’s context: (Dr. Reich, oddly, will not refute the supposedly errant claims of the NY Times. Instead, he will go on to provide three reasons it's going to happen.)
The national debt is expected to rise as a percent of the total U.S. economy largely for three reasons:
(1) The Federal Reserve is busily slowing the economy and causing interest rates to rise. As a result, the debt will become larger as a share of the total economy. And a larger portion of the total debt will be paid out in interest. Most of these interest payments will go to wealthy Americans who have lent the U.S. government money (both directly in the form of Treasury bills they’ve purchased and indirectly in all the Treasury bills bought by the funds in which they’ve invested). (In other words, it will happen as a matter of government policy.)
(2) The giant baby-boom generation will soon collect Social Security and Medicare (or has already started to). But boomers (and post-boomers) rely on Social Security and Medicare. They’ve paid into it through their working lives. (There’s a good argument for raising the cap on income subject to Social Security taxes, requiring that people earning more than $400,000 a year contribute more, as President Biden has suggested, but that’s a different issue.) (In other words, it will happen because of huge government programs that are being mismanaged.)
(3) Republicans have slashed taxes on the wealthy, resulting in less federal revenue. Ronald Reagan, George W. Bush, and Donald Trump all reduced taxes on the wealthy (and the corporations on whose stock they collect capital gains). Note that these are many of the same people now collecting interest payments on their loans to the U.S. government. (The dissembling intensifies. Here is a chart of government revenues and expenditures:
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 never decreased. Never. In fact, spending has increased faster than receipts. Always.
Oddly, Dr. Reich doesn't think there's a problem with the national debt, but then asserts there is a problem with the national debt, and it was caused by the rich getting 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.)
So if you’re worried about the federal debt — and there are some good reasons not to be (see Modern Monetary Theory) — one of the first things you should do is repeal these tax cuts and restore taxes on the wealthy, who, not incidentally, are now taking home a record share of the economy’s gains.
Yet Republicans want to extend Trump’s tax cuts, at the cost of another $3 trillion. (Tax cuts do not "cost." The money doesn't belong to government. Allowing the person who earned the money keep it does not "cost" the government, since the government never had it.)
And they want to repeal funding of the Internal Revenue Service, whose extra funding is expressly for the purpose of auditing wealthy taxpayers. ("Expressly." I.e, that's what we've been told. But of course, what the government tells us is a quite another matter from what it actually will do.)
This will cost billions more, because wealthy taxpayers won’t pay all the taxes they owe.
Another critical point: A big chunk of the projected debt will finance investments in future growth: (Oh. So, debt is good. Any amount of debt. We need to spend more money than we take in because the targets of the money are desirable and necessary things. Spending now for "future growth."
Another critical point: A big chunk of the projected debt will finance investments in future growth: (Oh. So, debt is good. Any amount of debt. We need to spend more money than we take in because the targets of the money are desirable and necessary things. Spending now for "future growth."
Ten years ago and 20 years ago the Left was saying the same thing, that deficit spending funds future growth. Well, we're in that future now. Did yesterday's deficit spending have any discernable effect on today's economic situation? Can Dr. Reich point to any aspect of today's economy and tell us it's better because we deficit spent a decade ago? Indeed, how would we measure that, since we don't have a control group? For all we know, today's economic situation would have been better without deficit spending.
This "modern economic theory" in action.)
infrastructure such as roads, bridges, pipes, and the energy grid. Critical industries such as semiconductors. And the necessary shift from fossil to renewable energies. Without these investments, the U.S. economy would grow far more slowly and the debt would be even larger in proportion to it. (Total fiction. There has never been a circumstance where this has been put to the test. There has never been a budget submitted that was lower than the previous year.
In fact, deficit spending is a drain on the economy. The government ties up the credit market, it transfers money from people who then can't spend it themselves, and it wastes trillions on hare-brained schemes.
But of course, all that Dr. Reich is able to identify is infrastructure and critical industries, as if these constitute the major reasons for government spending.)
These investments will reduce the debt as a share of the total economy. (Take another look at the chart, this time the right column. This is the debt percentage "as a share of the total economy." Does the reader see how the ratio has exploded? There has been zero positive effect from the huge amount of deficit spending.
Again Dr. Reich lies to us.)
How the hell can we expect Americans to make any sense of the debt numbers without this context? (Americans are not stupid. They don't need you to explain anything to them. An exploding debt, with no restraint shown from any part of government, is a self-evident bad thing. It's simply not sustainable, and we may even be past the point of no return.)
For the Times to make the debt numbers its lead story without explaining this stuff is sheer scaremongering. Worse, it plays into the hands of Republicans determined to hold the credit of the United States hostage to the debt ceiling. (And, of course, raising the debt ceiling has nothing to do with taming future indebtedness but only with paying the nation’s past bills.)
Economic illiteracy is dangerous for a democracy, especially when exacerbated by mainstream media that should know better.
What do you think? (We think you're either trying to play us, or your are dangerously ignorant.)
How the hell can we expect Americans to make any sense of the debt numbers without this context? (Americans are not stupid. They don't need you to explain anything to them. An exploding debt, with no restraint shown from any part of government, is a self-evident bad thing. It's simply not sustainable, and we may even be past the point of no return.)
For the Times to make the debt numbers its lead story without explaining this stuff is sheer scaremongering. Worse, it plays into the hands of Republicans determined to hold the credit of the United States hostage to the debt ceiling. (And, of course, raising the debt ceiling has nothing to do with taming future indebtedness but only with paying the nation’s past bills.)
Economic illiteracy is dangerous for a democracy, especially when exacerbated by mainstream media that should know better.
What do you think? (We think you're either trying to play us, or your are dangerously ignorant.)
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