Various political demagogues and Wall Street interests have mounted a campaign to convince Americans that despite persistent massive unemployment for the foreseeable future, more than 15 million people underwater on their home mortgages, and two unnecessary wars, what we really should be worried about is America’s national debt.
It doesn’t help that most of the media pretends not to understand the basic economics, accounting, or arithmetic of the issue. Let’s start with the economics: the Obama administration forecasts unemployment of 10.0, 9.2, and 8.2 percent, respectively, for 2010-2012. The rate does not fall to the 5.2 percent rate it considers full employment until 2018.
The difference between 10 percent unemployment and 5.2 percent is more than 7 million people without jobs. And that doesn’t count the increase in millions of people involuntarily working part time, or millions who leave the labor force because they can’t find work.
This is unacceptable in any civilized society; but even more outrageous in the world’s richest country. It means millions of ruined lives and permanent scars that will persist for years and possibly decades — in the form of increased poverty, lower educational levels, mental illness, suicide, crime, and other social ills.
This means that our government’s stimulus package was too small, which fits with the data: in 2009, taking into account the spending cuts and tax increases of state and local governments, it was less than one percent of GDP. That is why the stimulus is estimated as having saved about 1.6 to 2 million jobs, whereas we are down about 8.5 million jobs since the recession began.
Bottom line: we need more stimulus, not less; this is not the time to be worrying about deficits or national debt.
It is clear that there is no short-term problem with running large deficits in a weak economy: investors are buying up even long-term U.S. Treasury bonds at remarkably low real interest rates. Clearly the markets do not perceive that our government is heading into risky territory with its debt. Interest payments on the debt are currently just 1.4 percent of GDP.
For the long term, as the CBO has emphasized, the vast majority of the deficit and debt problem is just rapidly-rising health care costs. Of course, we could be like other developed countries and have universal health care, and pay about half of what we are now paying per person. That is the average for the other high-income countries. This would take care of our long-term federal debt problems.
Another significant contributor to our long-term debt is the military. On an annual basis, we spent 5.0 percent of GDP on just the Defense Department budget last year. Before 9/11, the CBO had projected just 2.4 percent for 2009. The difference is more than twice the long-term shortfall in our Social Security system, and it is based on an understatement of military spending. Maybe we need to focus on protecting our airports from already existing terrorists rather than recruiting more by occupying foreign countries. Maybe we don’t need hundreds of military bases all over the world.
But thanks to the power of what President Eisenhower famously named the “military industrial complex,” President Obama has exempted the military from any spending freeze. Thanks to the two most powerful lobbies in Congress — insurance and pharmaceutical — getting health care costs under control is still a distant dream. And then there’s the people who make the nation’s major economic decisions and actually brought us this mess – Goldman Sachs and their Wall Street friends: they want to put Social Security on the chopping block to pay for their crimes (and bonuses).
Anybody see a pattern here? It’s not the debt that threatens our future.
This op-ed was distributed by McClatchy Tribune Information Services on February 24, 2010 and published by the Sacramento Bee (CA) and other newspapers.
Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. He is also president of Just Foreign Policy.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.