Still another Gregg beauty is: “This borrowed money is certainly not free. Our children and grandchildren will be hit with the bill. Sadly, in 10 years, we will spend more on interest payments on this debt than we spend on education, energy and transportation combined — almost four times as much.”
First, the children and grandchildren of Americans haven’t had to repay the national debt for many years now. The reason is that the expansion of the economy has very often outrun the expansion of the debt because we’ve often made good public investments when we’ve run deficits. Of course, the exceptions to this were in the Reagan and two Bush Administrations when debt increases outpaced GDP increases because public investments were in the form of ill-advised tax expenditures that had too small a multiplier effect. Second, paying interest on the debt has never been a major problem for the Government. But, if it becomes one, we can easily reduce the burden by “printing money,” or, in more polite language, “monetizing the debt, a move Sen. Gregg, seems never to have heard of, even though it was a favorite move of his favorite President, Ronald Reagan.
Gregg also says: “Imagine that as your family budget. Could you afford to spend so much on credit card finance charges that it dwarfed what you spent on food, utilities and other necessities? Neither can our country?” Again, the family analogy. Time to scream. The US Government is not a family. It has a printing press. It can, if it chooses, use the dollars it prints to either fund its deficits by not borrowing money, or to fund its interest payments, if it does borrow money. Whichever way to choose to go, the interest payments need not be a problem.
Next, Gregg says: “At the heart of this budget debate are differing philosophies on the role of government in our lives. Republicans do not believe that we can expand prosperity by expanding government, or by increasing the burden of spending, taxes and debt. We believe that it is the individual American who creates prosperity and good jobs, not the government.”
“Different philosophies . . . “ as if they were different religions or cultures that people can’t really choose between on a rational basis. What nonsense. Whether Republicans believe what they believe is beside the point. Whether the philosophies of the parties are different is also beside the point. The issue is whether their beliefs are more likely to “beggar us” rather than the Budget of the Obama Administration. The truth is that the historical record of the past 75 years shows that we do better when, in times of lowered demand and idle industrial capacity, we expand Government and spend money on public investments. This behavior has increased deficits in the short run, while in the medium and longer-run, it has decreased the debt burden as a percent of GDP. The only exceptions to this rule are Republican Administrations in which tax expenditures were used to benefit the wealthy. The record is unambiguous on the results of this. It is to increase the ratio of debt to GDP in the long run and to beggar the Nation. Let us hope that we see this clearly, and never practice “trickle-down” again.
As for the idea “. . . that it is the individual American who creates prosperity and good jobs, not the government.” This is among the Republicans favorite bits of cant. It is a religious belief for them, a line they use to assure the uncritical that one’s fate depends on oneself alone, and has nothing to do with whether conditions of equality of opportunity for individuals are embodied and maintained in social institutions supported, and sometimes created, by all of us acting together through our government. Individuals do not create prosperity. We create it together, in our organizations, communities, and societies, by trading, exchanging, and working with one another to solve our problems and act. The myth of the lone frontiersman is a fairy tale. Ayn Rand is, and has always been, gross nonsense.
And finally, according to Sen. Gregg: “Our nation has a history of each generation passing on to its children a stronger and more prosperous country, but that tradition is being jeopardized by this budget’s attempts to dramatically expand the size and cost of the government, to the point that our children’s opportunities will be crushed under the burden of debt.”
If we really want to pass on a stronger more prosperous nation to our children, than we have to begin by recognizing that for the past nearly 30 years we have been evolving our country into one where the children of the wealthy are prosperous, and the children of working people are less and less so. They are the ones in families crushed by credit card, medical, and housing debts. They are the ones who can’t afford a college education. They are the ones who must volunteer for the armed services in the hopes of finding a way out of poverty. If we really want to pass on a more prosperous and stronger country to these young people, and their children, we have to build an economy that gives them opportunity. The fact of the matter is that the relatively unregulated, increasingly, financial services-centered economy we’ve been creating since the end of the 1970s, has limited prosperity to an increasingly small group, while giving the rest of America bread-and-circuses and increasing insecurity and limited opportunity. In addition, that economy has hollowed out our industrial capacity to such an extent, that if we ever had to convert to a real war footing requiring the kind of industrial production we managed in WW II, we wouldn’t have a chance in hell of managing it in any reasonable time. So much for leaving increased prosperity and strength to our children using Republican ideas and programs.
Make no mistake, Republican notions of freezing Government expenditures and public investments to minimize the deficits during this period will neither minimize deficits nor leave either prosperity or a strong nation to our children. Instead, they will destroy any hope of a quick return to recovery, our national economy, and with it our remaining real wealth and industrial strength. If we follow them, we will not leave anything worthwhile to our children, but instead beggar ourselves and our nation following policies that protect those who have become wealthy over the past 30 years and who care only for themselves and their families and nothing for their fellow citizens.