Avoiding American default on the nation’s debts just in the nick of time (with less than forty-eight hours to go before the United States would be officially in default), neither legislators in Washington nor citizens across the country are happy with the deal reached by leaders of the House of Representatives and the Senate and the President. Economists generally agree that the deal gets the nation past the critical August 2 Debt Ceiling crisis but doesn’t begin to solve the basic problem. Republicans say Democrats spend too much. Democrats say Republicans are unwilling to raise taxes on citizens who can easily afford to pay more so spending can continue on social programs that make us the civil society that we value. Republicans say cutting taxes saves the economy by giving people more money to spend. Democrats say that cutting programs like social security takes money away from people who must spend it just to live, just to get by. Democrats say people who already have money take money from tax cuts and stash it away in savings or investments and that money saved by not having to pay taxes doesn’t go into the economy as increased spending. Republicans say people who already have a lot of money will consistently put money they can keep from not having to pay it in taxes into the economy in the form of wages the wealthy pay to hire more people who in turn spend the money they earn and therefore support economic stability.
Of course, I don’t know how to solve our problems. What I know how to do is to vote for intelligent, reasonable people to serve the nation in it’s good government. I like the American government. Up until now it has been the most widely respected and trusted government in the world. I will vote for candidates who express a basic respect for American government. I will not respect nor vote for candidates whose goal is to subvert and eventually amend the Constitution of my nation’s government.
1 comment:
Jerral,
Actually, economists (as opposed to rich people, politicians, and some business leaders) do not see the deal as any form of saving grace. The economy is still sagging desperately, and the weak-pulsed, so-called recovery that has been struggling along by fits and starts has largely depended on government spending, in purchasing goods, in payrolling (creating jobs either in or outside of the public sector), and through transfer payments to the poorest Americans, for whom each dollar received immediately becomes a dollar of aggregate demand in the economy.
During the worst economic slump in our nation’s history in the 1930s, it was increased government spending (both tax-borne and deficit-borne) that kept the economy afloat, and even greater government spending on the ensuing war, that saved the American economy. Cutting off spending to save an economy in crisis is like shutting off the water to fire fighters battling a three-alarm blaze.
As someone who has taught the political economy of inequality at the graduate and undergraduate level since the very early 1970s, I find the decision before us quite scary, and I am not alone. Of all the opinions I’ve seen since last night, and e-mails sent and received, it is primarily economists and political economists who are seeing this decision as a catastrophic error (see, e.g., Robert Reich or Nobel Laureate Paul Krugman, whose comments can be found at www.nytimes.com). It’s a pity that a tiny group of politicos holed up in a room and talked to one another exclusively about what was politically possible given the various power groups in their parties and made such an important decision with no input from someone with some expertise in the field, or with a broader horizon than just the debt crisis of the next 48 hours. A political economist or two would have been nice, although even some major financiers said that a default would have been better then the deal that our leaders eventually forged on their own.
It is also interesting that several leading political experts, in looking at the current debacle, have bemoaned the loss of leaders of the quality of George H. W. Bush (as opposed to his son), Richard Lugar, Lindsey Graham, Colin Powell, and Henry Paulson, among others, great Republicans all, whom they feel would not, could not have let this happen.
Robert Enoch Buck,
Professor Emeritus,
San Diego State University
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