Saturday, December 01, 2012

The Cure

Before you ignore this opinion below please give it some thought. It is not very long and it truly means saving our country's economic life. After you read it contact as many legislators as you can especially if they are Republicans. You must let them know you understand their game.

A preface from Wiki: Robert Reich, former Secretary of Labor in the Clinton administration. He is on the faculty of UC Berkeley's Goldman School of Policy. Since then, he has taught a popular course called Wealth and Poverty. In addition to his professorship, Reich is also a Member of the Board of Trustees for the Blum Center for Developing Economies at the University of California, Berkeley. The Center is focused on finding solutions to address the crisis of extreme poverty and disease in the developing world.

I believe he speaks truth. WHY cannot this country with all its talent get it and why was there not someone screaming this especially in 2010 when the Tea Party cancer struck? We needed the president selling his policies, in that time on Obamacare, as he is now explaining his program for economic growth, fiscal so called "cliff" avoidance and why the Republican austerity plan is NOT a cure for our nation's economic woes but a death knell.

If I can understand Mr. Reich anyone can because I am afflicted with some kind of genetic malady for math or its associates. Languages yes, math no but what Mr. Reich says makes perfect sense even to me and, I believe, he is spot on correct.

The remedy for our economic woes since the Bush induced Great Recession is staring us right in the face but some of the electorate duped by all things Republican continues to vote for these charlatans as it did in 2010 handing the Republican Party of fiscal death power in the Congressional House and individual state legislatures as well. Republicans sell themselves as the cure for a sound economy but they are the crank poison. It is like having the cure for cancer before you and instead of the cure you choose a diet Coke which will kill you. I paste Mr. Reich's article from Reader Supported News below. Please consider reading it and, like Paul Revere, pass it on to every village and farm! The link for it with reader commentary is here or below.

Why We Should Stop Obsessing About The Federal Budget Deficit
By Robert Reich, Robert Reich's Blog
19 November 12

wish President Obama and the Democrats would explain to the nation that the federal budget deficit isn't the nation's major economic problem and deficit reduction shouldn't be our major goal. Our problem is lack of good jobs and sufficient growth, and our goal must be to revive both.

Deficit reduction leads us in the opposite direction - away from jobs and growth. The reason the "fiscal cliff" is dangerous (and, yes, I know - it's not really a "cliff" but more like a hill) is because it's too much deficit reduction, too quickly. It would suck too much demand out of the economy.

But more jobs and growth will help reduce the deficit. With more jobs and faster growth, the deficit will shrink as a proportion of the overall economy. Recall the 1990s when the Clinton administration balanced the budget ahead of the schedule it had set with Congress because of faster job growth than anyone expected - bringing in more tax revenues than anyone had forecast. Europe offers the same lesson in reverse: Their deficits are ballooning because their austerity policies have caused their economies to sink.

The best way to generate jobs and growth is for the government to spend more, not less. And for taxes to stay low - or become even lower - on the middle class.

(Higher taxes on the rich won't slow the economy because the rich will keep spending anyway. After all, being rich means spending whatever you want to spend. By the same token, higher taxes won't reduce their incentive to save and invest because they're already doing as much saving and investing as they want. Remember: they're taking home a near record share of the nation's total income and have a record share of total wealth.)

Why don't our politicians and media get this? Because an entire deficit-cutting political industry has grown up in recent years - starting with Ross Perot's third party in the 1992 election, extending through Peter Petersen's Institute and other think-tanks funded by Wall Street and big business, embracing the eat-your-spinach deficit hawk crowd in the Democratic Party, and culminating in the Simpson-Bowles Commission that President Obama created in order to appease the hawks but which only legitimized them further.

Most of the media have bought into the narrative that our economic problems stem from an out-of-control budget deficit. They're repeating this hokum even now, when we're staring at a fiscal cliff that illustrates just how dangerous deficit reduction can be.
Deficit hawks routinely warn unless the deficit is trimmed we'll fall prey to inflation and rising interest rates. But there's no sign of inflation anywhere. The world is awash in underutilized capacity As for interest rates, the yield on the ten-year Treasury bill is now around 1.26 percent - lower than it's been in living memory.
In fact, if there was ever a time for America to borrow more in order to put our people back to work repairing our crumbling infrastructure and rebuilding our schools, it's now.

Public investments that spur future job-growth and productivity shouldn't even be included in measures of government spending to begin with. They're justifiable as long as the return on those investments - a more educated and productive workforce, and a more efficient infrastructure, both generating more and better goods and services with fewer scarce resources - is higher than the cost of those investments.

In fact, we'd be nuts not to make these investments under these circumstances. No sane family equates spending on vacations with investing in their kids' education. Yet that's what we do in our federal budget.

Finally, the biggest driver of future deficits is overstated - rising health-care costs that underlie projections for Medicare and Medicaid spending. The rate of growth of health-care costs is slowing because of the Affordable Care Act and increasing pressures on health providers to hold down costs. Yet projections of future budget deficits haven't yet factored in this slowdown.
So can we please stop obsessing about future budget deficits? They're distracting our attention from what we should be obsessing about - jobs and growth.

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