For your Tea Party friends, who believe that the United State’s credit downgrade, from AAA to AA+ is a good thing, let the smartest guy in the room do the arguing for you (in a way that even they can understand).
Robert Reich, take it away:
Could we make it selective? To fund the excessive public spending the administration claims is our way out of recession, could only those that think he is right fund that venture? I and most Americans know that it is an artificial extremely temporary high, that is followed by the inevitable further deteriation of our economy due to the weight of additional debt. So, if you really believe this guy’s sales pitch for more government debt and spending (aka public spending), then send them the amount they say they need. Also, the premise for raising our credit rating it the opposite of what he suggests!! Had we not done QE2, or even if we had passed a reasonable spending bill, our rating would not have been cut in the first place. So what makes you think more spending will fix it? QE1 and 2 didn’t make a dent in the problem of growth and jobs, but made it worse. AND the rest of the world knows it, but the current administration continues to preach it’s deceptive mantra of ‘we need more government spending to fix the jobs and growth in America’. No one else in the world believes that, so why would you? Do not ignore any longer the wisdom in math.
Raising the debt limit is paying for the debt of the past several decades. Obama put $4.2 trillion on the table with 75% cuts and 25% revenue and the GOP turned in down.
But to go with your premise, can some of us then opt out of the spending on wars and tax cuts for the wealthy since they contribute more to our debt than anything else?
Actually, spending our way out of the debt does make sense. If you spend money on our infrastructure, you create jobs. If you create jobs, you decrease unemployment. If you decrease unemployment, you reduce the amount paid out in unemployment insurance, as well as generate more revenue when those now employed people are again paying taxes. So you may increase the debt in the short term, but in the long run you end up reducing the debt by that much and more because of the increase in tax revenues and the decrease in unemployment payouts. Also, as S&P stated, the reason they downgraded the US rating was because of Republican willingness to hold our PAST debt hostage and send our country into default, NOT because of QE2. Raising the debt ceiling had nothing to do with giving Obama more money to spend (which, BTW, is Congress’ job, not the President’s) and everything to do with paying off our existing debt caused by two unfunded wars and an unfunded Medicare Rx drug plan, all passed by Republicans during the Bush administration. The debt ceiling allows the government to BORROW more money to pay EXISTING debt, not spend more money now.
Why is this a post and not just a link on Facebook?
Oh, it was.
Peace, Tex Shelters
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October 19th, 2014