Subscribe to Common Dreams News Updates
Most Popular This Week
Popular content
Today's Top News
'Living Within Its Means'? Claims About Budget Balancing Are Baloney
“Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.” —President Barack Obama, weekly radio address, July 2, 2011
“If the US was a business, it would be a failing business. That’s the problem. You have to spend less than you make. Business 101." —Boston-area car dealer Ernie Boch, Jr., quoted in “From some of the richest, two cheers for higher taxes,” Boston Globe, August 21, 2011
Turn on any of the television or radio gab shows and it won’t be long before you hear someone proclaim that government must live within its means just as families do and businesses must.
Barack Obama gave this analogy the presidential seal of approval in a radio address in early July. In August, Ernie Boch, Jr., the Boston-based auto dealership magnate, added his two cents to Warren Buffett’s call to hike taxes on the rich: he would pay more taxes only if the government balanced its budget just as his and every other business must do.
But the truth is neither families nor businesses balance their books in the sense of forgoing borrowing. And even if they did, to insist that government do the same would extinguish whatever remains of economic growth and job creation, not ignite them.
Family and Business Red Ink
Few families balance their budgets the way the guardians of financial rectitude are now demanding of government. Nearly all families spend more than they earn and borrow to do so. When a family takes out a car loan, a student loan, or a mortgage on a house, it’s spending money it doesn’t have.
Is borrowing the road to ruin? Not if the debt is affordable. That depends not just on the size of the debt relative to the income available to service that debt, but also on how the family spends the borrowed money. For instance, assuming the size of the debt is manageable, borrowing to pay for education is justified if the education improves the family’s earning potential and so helps provide the income necessary to service the debt.
The same holds true of businesses. They borrow to invest and operate, especially in the United States where corporations finance the bulk of their investments by borrowing rather than by issuing stock. While exact numbers are not available about the privately held Boch auto dealerships, rest assured that Boch’s company borrows to put the cars on his lot that he sells to the public or to build yet another dealership. That borrowing allows Boch’s and other businesses to spend more than they are taking in—Business 101.
Families and businesses in the United States do quite a bit of borrowing and quite a bit more borrowing than they had in the past. Today families rely on credit to meet their needs—for everything from food to fuel, from education to entertainment, and especially housing. Total household debt stood at 92.5% of GDP in 2010, more than thirty percentage points higher than its level two decades earlier, 60.2% in 1990. And as their debt rose, families shelled out more and more of their income to make payments on that debt. In the first quarter of 2011, household payments on consumer and mortgage debt consumed 11.5% of disposable personal income.
Businesses, too, have increased their reliance on debt to finance their operations. Total debt of non-financial businesses was 53% as great as GDP in 1980, but reached 74.3% in 2010.
Those figures surely put the lie to the claim that families and businesses balance their budgets year in and year out without relying on borrowing to spend beyond their income.
Government’s Red Ink
Still it’s true that federal government debt has increased steadily and rapidly over the last decade as the government has consistently run budget deficits. The ratio of the outstanding debt of the federal government to the country’s GDP rose from 32.5% in 2001 to 62.1% in 2010.
However, payments on that rising debt are less of a burden on the federal government budget than debt payments are on family budgets. The U.S. government can perpetually refinance its debt in ways that are not open to the richest family or the largest business. Its debt burden, then, consists of the net interest payments on its debt, which will amount to 9.5% of federal revenues in 2011. That’s two percentage points less than the proportion of their income that families devoted to making their debt payments—interest payments and payment on the principal—in the beginning of 2011.
Moreover, a good share of federal spending has gone to investments that are aimed at increasing its (and U.S. families’) future income—similar to a household taking out an education loan or a business borrowing to expand its operation. A recent study conducted by the Brookings Institution, the Washington-based think tank, found that in 2008 the federal government spent $253.8 billion on non-defense investments in infrastructure, mostly transportation, research and development, and education and training, all expenditures that will boost the productivity of the economy and help to provide the tax revenue to service the debt. That investment spending equaled a little more than half of the $453.6 billion budget deficit in 2008.
Political Will
The aversion to the federal government deficits and borrowing fostered by pundits and politicians who pronounce that governments must balance their budgets like families and businesses do, even as the economy falters, is not only at odds with the facts. It has made us worse off by blocking government spending just when it is most needed. When family budgets are tight, and spending constrained with so many out of work and with the overhang of mortgage debt, it falls to government to provide the spending necessary to get the economy going. Government spending can put people to work and provide the income that will loosen tight family budgets, so they too can buy what businesses produce.
What’s needed is to reverse the austerity budgets favored by conservative politicians in the United States and Europe today. More government spending and tax cuts targeted at working people, beyond what President Obama has proposed in his recent jobs bill, will surely make the budget deficit yet larger and drive up government debt. But that ratio of government debt to GDP, currently 62.1%, is still far below the 1946 record peak of 109% at the end of World War II, which was followed by the two of the strongest decades of economic growth in U.S. history.
It has happened before, and during even worse economic conditions than today’s stagnation. In a Pittsburgh campaign speech in October 1932, some three years into the Great Depression, presidential candidate Franklin Delano Roosevelt promised that he would slash federal expenditures by 25% and balance the federal budget. But once in office, FDR reneged on his promise to balance the budget and initiated the New Deal. When he returned to Pittsburgh during his 1936 campaign for reelection, FDR declared, “to balance the budget in 1933, or 1934, or 1935 would be a crime against the American people.”
Without massive government spending and without the political will to brand balancing the government budget as a “crime against the American people,” today’s crisis will likely drag on for a decade as economic hardship mounts for more and more of us.
35 Comments so far
Show AllThere are several beliefs underlying the balanced budget emphasis which are deliberately obscured by the corporation of the United States of Global Corporate Domination.
The emphasis on shrinking the "government" is an emphasis on shrinking the number of people who have a voice in government. If what was wanted was a "government of the people, by the people, for the people", then it can only follow that the government would become larger as the population grew.
This is clearly NOT what is wanted by the corporate control center we call Washington.
The other aspect which is deliberately obscured is that when the controllers are using the economy and the budget of the U.S. as their basis for measuring profits and losses, they are lying. They are lying because they actually depend more and more upon resources which are found outside of the U.S. They take the money and lives of the citizens of the U.S. to acquire resources globally. The U.S. is just one part of their global scheme and plans for monetary profits from the Domination of their Empire.
A balanced budget would require limiting the greed of the corporate elites and THAT is the last thing their lackeys in Washington are meant to accomplish, and THAT is why they put so much emphasis upon the need to balance the budget of the U.S.
It is a deceit that they use to distract us from our self-bondage through economic sleight of hand, just as they use the totally false image that there are two parties in government.
There is one party, with two faces, with the purpose of reducing our humanity for global monetary profits for the few.
The rejection of both faces of the corporate empire is the only way we can begin to stop the growing global assault on humanity and nature.
NOW.
The proper use of debt is to use it to fund projects which generate the revenues to repay the debt. Using debt for exploding devices don't fit this criterion.A good example is the Eisenhower inspired national highway system which was funded with the Defense budget. Balancing the USG budget is just a red herring meant to appeal to the lower rungs of society whom let others do their thinking for them. The Eisenhower national highway system facilitated commerce with which the debt could be managed. The politicians today use the debt as their cash cow, to solicit bribes from the corporate welfare kings which it is doled out to.The Wall St., Wash., DC Axis of Evil criminal conspiracy do not even take managing the debt into account.
If we just re-enacted the tax policies we had under Kennedy we could reduce the debt quickly, restore many social programs most of us cherish and stop all this talk of austerity for the working class.
Is not it time to ask the Ultra Wealthy,
"Ask not what your country can do for you, ask what you can do for your country?"
Come on People, do you really want to be a Central American Nation?
"But that ratio of government debt to GDP, currently 62.1%, is still far below the 1946 record peak of 109% at the end of World War II, which was followed by the two of the strongest decades of economic growth in U.S. history."
Not bad considering we have just fought 2 wars.
But this is a fudged number. The US Governmnet does not measure money it "owes to itself" in that calculation. So as example it borrowed and spent all of the Social Security monies so does not count this as part of the debt.
As per the CIAs own factbook , if they measured the debt per gdp the same way other nations do and include this in the calcuations , debt to GDP would be around 100 percent.
Now there was no "social security" in 1944 to borrow from so one is comparing apples and oranges.
Total US debt is some 5 trillion owned by the Public, some 4 trillion owned outside the country and some 5 trillon of Intergovernmental debt (Ie That Social security which was spent as "general revenues") for a total of a little over 14.5 trillion.
This does not count unfunded liabilities which INCLUDE the guarentees made to the banking system under TARP and other such bailouts. IE the YSA has guarentted the debt of many of the banks.
Social Security was around in '44.
Do you mean rather that the Feds wouldn't let themselves borrow from it back then?
Social Security IS now under general revenue spending - that's what these payroll tax holidays are all about, getting Social Security off its special tax to kill it with cuts to general spending.
So where's the debt there?
No payroll tax revenue => no $ for Social Security checks => pay Social Security checks from general revenue.
But even if we do imagine that the total debt could include stuff like that, and even if we say we are at total debt = 100% of annual GDP, even if we go way higher than that, say 150% or 200%, it still wouldn't change the correctness of the basic point:
The Federal Government can and should SPEND it's way out of this situation.
Done right, overall spending could well stay flat or even drop a bit because new target expenditures may not exceed the savings from dismantling the Empire.
But it will still be the basic "spend the way out of debt" scenario.
This is one key difference between the US today and the EU - the amount of waste in the system. Another is the potential for tax increases.
The American Empire cost the U.S. Treasury a truly staggering fortune every year both directly and indirectly.
And tax rates are absurdly low for the top individual earners, corporations, investors, and inheritors in this country.
Top this off with a real economy in overall stagnation for 40 years, and the Keynesian solution starts to look like a no-brainer. ;)
It was LBJ and virtually of of the Congress voted to give the USG the ability to use Social Security funds.The purpose was to fund the Vietnam war and since then the SS surplus is used to fund our permanent national security wars. Until the mid 60's Congress did not have the authority to raid SS, so the law was changed.Roosevelt had set SS up so that the USG could not raid it. Had JFK not been assassinated he probably would have not changed the law. Another reason for JFK to be eliminated. Oswald, we are lead to believe, wanted to have the USG the authority to raid SS. LBJ, Cliton, Obomanable/Borg[to resist is futile] are all complicit in creating the Wall St., Wash., DC Axis of Evil a criminal conspiracy.
The revenues from Social Security could not be touched under Roosevelt. They could not be spent on the war effort. Furthermore given it had only been launched a few years previously the total sums being spoken about made no real impact on overall spending.
One person claimed debt to GDP was only 64 percent. I pointed this a falsehood as the Social Security funds that have been borrowed and spent by subsequent administrations is not counted as debt which it should be. These funds still have to be paid to the people they are owed to and can this can obly be done through further borrowing or taxes. I was not speaking in favor of austerity. I was merely pointing out a reality when people debate the current existing system.
The whole point about debt to GDP is it a flawed system. It must always be bailed out. Keynesian economics will ultimately fail as well as that system is based upon Growth , markets and consumption. More spending is just a bandaid solution. The purpose is to increase consumption because Consumption keeps the economy going. It is still a bad system.
The entire system has to be gutted. Keynesian economics are not the solution . They are merely an attempt to try and mitigate all the flaws in Capitalism and consumerism.
An analogy is this. A country has overfishing on its coast. The fishstocks can only support a total catch of 2 million fish a year but there are 3 million being caught. The Government notes there are 1000 fishermen each catching 3000 fish and decide to cut this to 100 fishermen catching 30000 fish through the issuance of "licences".
People will then argue that the wealth is not being equitably distributed and where 1000 people used to make a living catching fish, only 100 do under the new rules and they get far more income.
The USG, uses the cash basis, a method that is illegal for corporations to use.A cash basis is fine for the mom and pop businesses.Corporations must use the deferral method of accounting, by law.. Deferral accounting. If the deferral accounting were used their would be no USG deficit. In all likelihood. The Congress does not know accrual accounting, which would be a solution to the "deficit" problem The purpose of the deficit is for propaganda to deflect attention of the USAn general public until Congress finds/creates Red Herring's to create the nonsense necessary to bamboozle the MeriKan. As I.F. Stone reported, governments lie, that's all they is lie.
Federal deficit spending since Korean war is almost exclusively on military, wars, so-called security and intelligence, military aid etc.. Before that, the US was the largest creditor nation. (roughly from 1917-1953).
Total aggregate (financial/corporate/consumer/govt.) debt/GDP is still nowhere near that of UK, or Japan. Those two countries have the highest aggregate debt/GDP in the world. Not to say that debt ponzi schemes are good, but just to put it in perspective. Besides the US just "prints" more money as USD is, for the moment, still the world reserve currency. The rest of the world absorbs the dollar glut and (at least until recently) buys US treasuries to recycle debt.
What is missing from the article is the advantage the US has had in the "Bretton Woods" system where USD is numeraire reserve currency. Once the US has to sell dollars for another currency to buy oil, the USD system will collapse and so will the Empire. The possibility and necessity of building a new financial system will arise, but it will be very painful.
By imposing financial and economic sanctions on Iran, ironically it seems the US is hastening the demise of the USD and the Empire Inc. This just out today:
"Iran, Russia Replace Dollar with National Currencies in Trade Exchanges"
http://english.farsnews.com/newstext.php?nn=9007275648
You are totally wrong about a "collapse" of our economic system if our reserve currency status were to end. The reserve currency status merely gives us some free interest in the circulating money. It is NOT a major factor.
He's talking about hyperinflation due to the foreign trade in $ drying up and the Fed's pumping of $ into the systemfinally coming back to bite all of us.
By this I DO NOT mean currency speculators, I mean buying and spending in $.
The amount of $ in the system IS a major factor and right now foreign purchases are keeping that up the way USAns are propping up the Chinese market for cheap crap.
Though a truly killer bout of hyperinflation would not really be a "collapse" of the economic system so much as that systems greatest triumph.
Everyone seems to forget that it is the POLITICAL systems of "Capitalist Countries" like the U.S. that make their economic systems work for the benefit of the nation as a whole (or at least until recently).
The Guilded Age was the system working perfectly. ;)
Thanks matti, folks on the left need to learn how the global neo-lib financial system works. The level of ignorance (sorry Greg R) is astounding.
The fact that Japan's GDP/debt ratio appears to be a problem, the unemployment rate in Japan is about 6% and the Japanese have health care for everyone, a combination of government and private systems. In the USA debt is attributed to worthwhile programs, SS, Medicare but they are self funding by law and do not contribute to the USG debt.These are programs that benefit the taxpayers whom are taxed for their purposes. Instead, the Wall St., Wash., DC Axis of Evil criminal conspiracy steals these fund and bamboozles a largely ignorant USAn public[about 50%] through the use of propaganda.
As long as Wall Street Casino bribes to politicians determine government policy, we will live and die within parameters established by the multinational corporate oligarchy to maximize their profits regardless of human lives and environmental costs.
Direct democracy
It's amazing that when Republicans are not in office they scream about Deficits. When Republicans are in office and spend spend spend you get remarks - "The Liberals are just making a fuss because they dont like there current President." I heard that alot during GWB's Presidency. Our former V.P. said Deficits dont matter. Go figure?
A proverb by Shakespeare, "me thinks thou hast protest too much" which is used to deflect attention and responsibility to others. Repubicans have run up the deficit more than Democraps,then protest. It's the same with the evangelical preachers who preach incessantly, protesting homosexuality. The are closet queers themselves and the protest loudly to obscure their own guilt and/or behavior. Ask Ted Haggard, the founder of Jesus camp. He was Bush's spiritual guru. WE wonder why this country is so screwed up spiritual, morally and emotionally.
The reason that phrases like "government must live within its mean, just like families" have so much resonance with average citizens is that average citizens are themselves way over their heads in debt. As often happens, the private concerns of individuals are expressed in demands for political action similar to the actions the citizens would take themselves if they could.
Thus, "family values" are most widely preached at a time when the economy is forcing, or allowing, family members to join the work force and leave behind the "ideal" of close family life.
The T-Party's demands to "take back the country" are in large part a reaction to the fear provoked by the election of the first non-white president, which seems to confirm wider fears that "illegals" and other non-whites might become more numerous than the "original" Americans, the whites.
In the same way, demands that the national debt be "paid off'" are in large part symbolic calls for individuals to find some way of paying off their own crushing debts.
The growth of personal debt came about as a result of two "innovations":. The first is the stagnation of real wages in the US since the 1970's, due to the capitalist offensive against working people and their organizations. The second is the development of easy credit, through credit cards, etc., that working people were forced to accept as a substitute for rising wages.
Easy credit has kept the US economy afloat by fueling consumer demand -- something that was, in previous years, fueled by rising wages (or not fueled at all, leading to recessions). Easy credit allowed millions of people to maintain their living standards and buy the goods produced by the corporate sector. On a national scale, the heavy use of credit allowed the US to maintain its military establishment and its global power position.
The policy of "low wages/easy credit" is not sustainable. Eventually the burden of debt on individuals becomes too heavy, and widespread defaults ensue, leading to contraction of the economy and increasing poverty.
The usual way out of this bind is to use the government's unlimited credit to inflate the currency and thereby reduce debt while at the same time fueling demand. This article, like many others, is essentially calling for such an approach, and reassuring readers that it is both feasible and effective.
The problem is that the creditors to whom the debts are owed have gained much greater political power than was the case before the 70's, and are working hard to prevent the government from lowering the value of their assets.. This accounts for much of the propaganda about cutting spending, "paying off" the national debt, "protecting our children" from having to "pay it off", etc.
The policy the creditors want is one that will protect the value of their assets -- the debts owed to them -- or, if possible, enhance that value. A dollar loaned must not become 50 cents paid back, or even 99 cents. It must be a full 100 cents (or a bit more), no matter how people suffer.
I believe it's time for people to stand up to the creditors who are, in the Biblical phrase "grinding the faces of the poor". It's time to question the legitimacy of a regime in which wages are kept low by force, while people are enticed and driven into debt just to keep their heads above water.
We need to delegitimize debt, and remind ourselves and others that the debt that burdens working people is nothing other than wages they were prevented from collecting.. The mountain of debt is really the mountain of unpaid wages withheld by the bosses since the 70s, and there is no good reason to pay it back, since that money was earned by hard work, not granted by generous creditors.
Student debt is an example of how the very act of learning and improving skills is turned into a terrific burden, not on those who will gain huge profits from an educated workforce, but on the workers themselves.
Credit card debt, made crushing by usurious interest rates, has been a poor substitute for decent wages. I wonder what a calculation of the amount of money denied to American workers by 40 years of frozen real wages would look compared to the amount of debt they have accumulated (minus usury) in order to maintain decent living standards. I don't know the answer, but I suspect those two mountains would look pretty similar.
The Left must not justify the collection of illegitmate debts forced on working people. It must not be content with simply trimming those debts with insipid policies that nibble at the edges of the problem. If banks who have loaned money to the Greek government are forced to "take a haircut" and forget about 50% of the Greek debt, then creditors in the US should do no less.
Argentina has shown the world the right way to deal with illegitimate debts: repudiate them, and move on. Argentina is doing quite well nowadays. Repudiation, either by inflation or by simple refusal to pay is the reality based way to "pay off" unpayable debts.
Why is the Left content with explaining, for the umpteenth time, that government debt is different from private debt? Rather, it should be developing ideas for dumping the debt, not just the public debt, but the private debt that underlies so much of the bizarre political discourse that plagues America.
I enjoyed your summary. Agreed; like many other things, private debt in a failed system is not really legitimate and needs to be dealt with logically and effectively such as through repudiation. The "bankruptcy reforms" were and are intended to try to prop up and prolong a failed system.
Basically every one of your givens is incorrect, but you're conclusion isn't half wrong.
It really kind of amazing. ;)
I'd say real property is so the biggest fish in the sea of debt repudiation, that it is actually the only fish in the sea- like JAWS.
Just an accelerated rate of personal bankruptcy would do it.
Leezazky -- If you haven't had the chance, you may want to pick up a copy of Debt--the First 5000 Years by anthropologist David Graeber.
http://seattletimes.nwsource.com/html/books/2015984428_br21debt.html
http://www.eurozine.com/articles/2009-08-20-graeber-en.html
Michael Hudson-- if you haven't read him -- would also be of interest, I think:
http://www.counterpunch.org/2011/12/02/debt-slavery-%E2%80%93-why-it-destroyed-rome-why-it-will-destroy-us-unless-it%E2%80%99s-stopped/
The interest paid for the COUNTERFEIT DEBT, created by the banksters, is paid for by the FORCED CONTRIBUTIONS, withholding taxes, by taxing USAn labor. Taxing labor to pay the interest on COUNTERFEIT DEBT of the CAPITALIST WELFARE KINGS. MeriKans don't complain, except for the occupiers.Just as Black Philosopher/Professor, Obomanable/Borg is "niggerizing" the USA, meaning that USAn'er don't protest against the abuse and the theft by the politicians as a result of bribery into the $100's of billions.
The trouble with articles like this is that they are written with the underlying assumption that the US far right, "free enterprise", rich get richer and poor get poorer all the time economic system is legitimate because it is generally reliable and successful. The facts, however, are that the US far right economic system is completely unreliable and unstable and is therefore not legitimate. Aside from numerous smaller failures, far right economics has spectacularly and completely failed twice in less than a hundred years, which historically speaking makes it very unreliable and illegitimate indeed.
To any perfectionist the Soviet system was a failure (as all systems are) but it never failed to the extent the US system failed in the 1930’s and then again in 2008 to the present.
Obviously the subject of why the US system is a failure requires one or more books to discuss thoroughly, but let me mention one extremely important reason why the US system has failed. Under right wing capitalist law, individuals are responsible for generating their own personal incomes. However, when there is a massive gap between the number of jobs available and the number of jobs needed and wanted by individuals, and when public social welfare income support programs are generally not available, that core legal and logical foundation of the system is completely lacking, which makes the system as a whole illegitimate and bogus.
Systems whose components collapse on a regular basis are not legitimate assuming there are alternative systems whose components collapse less frequently or not at all. Fortunately, there are economic systems running in other countries that have proven to be more stable, reliable, and legitimate than the US one. Very generally, those other economic systems take far right capitalism and modify it to make it less extreme and predatory.
After what happened in 2007-09, even many right wing economists have had to agree with the obvious, that the US system is neither stable nor reliable. Massive government intervention was required to prevent the US / World banking and financial system from collapsing.
These days, the right wing economists and politicians in charge are obsessed about public debt because they had to obsess about something when they realized that their whole system is not stable or reliable. So the right wingers in charge are grasping at straws as they try to dream up ways to make the system reliable and stable. They say to themselves (and to the public via propaganda organs such as FOX news): “If only we can get the public debt under control than the system will be reliable and stable”. Of course, public debt is just one element of dozens that comprise the system, and whether or not public debt is “under control” (whatever that means specifically) the far right economic system as a whole is not going to be reliable or stable.
In other words, you can not transform a failed system into a successful one merely by tinkering with a component or two or three (of dozens of components). Instead of that, you need a whole new set of components that work together well.
If the US system were not a failure and was legitimate, this article would be useful and more accurate than inaccurate. But again, given the failure of the US system, this article is more or less irrelevant.
Happy New Year Common Dreamers.
You TEACH economics ???? What a joke !
Yes, families borrow for many things - cars, houses, college, etc.
But they don't buy a new freaking house or car every year, while keeping the ones from last year and the years before that !!!!
Neither does government. At the government facility where I work, the drives and parking areas are full of potholes, The office buildings cheap sheet-metal Butler buildings 30 to 40 years old, the the PCs are 10 years old and many of the desks 50 years old.
The economic and social ignorance displayed in the comments on this thread exceed even the ridiculousness of the article itself.
I especially love the concept of 'there is no such thing as debt, because it's actually just money someone stole from you ten years ago' or whatever the commenter was trying to say.
IOW, I owe $ 100,000 on my house, but in reality some employer from before should have paid me that, so I'll just keep it as 'past due wages' and stop paying on the note ????
Bwahahahahaha !!!!!!!
PJM -- Free Republic web site down today?
At the danger of blowing your petulant little mind, you might want to read someone who does not normally appear on Fox business news:
http://www.counterpunch.org/2011/12/02/debt-slavery-%E2%80%93-why-it-destroyed-rome-why-it-will-destroy-us-unless-it%E2%80%99s-stopped/
Another example from the comments :
"To any perfectionist the Soviet system was a failure (as all systems are) but it never failed to the extent the US system failed in the 1930’s and then again in 2008 to the present."
Ummm... did you not notice that the USSR ceased to exist several decades ago ???? Or do you not count that as 'failure' ?
There goes Tremaine responding to a loose screw agan….
First, if you don’t like the uniquely high level and provocative nature of comments (and some of the articles) of Common Dreams than you need to go back to the little kiddies’ section of the Internet.
Second, take a look at your logical failure here. You are stating that if something ceases to exist than by definition it was a huge failure when it existed (or at least it was a huge failure just before it ceased to exist). Under this perverse logic, if you were walking down the street and someone smoked your ass (either by accident or on purpose while mugging you) than you would now be a failure because you died young. I can envision the twittering at your funeral: “Frank used to be a good man, and it’s a shame that now he will be remembered as a big failure just because someone smoked his ass while he was downtown”. Laugh out loud.
Seriously, you can't render a system (or a person) a failure by killing it or him or her. And nor is a system or a person automatically a failure if and when they kill themselves.
Third, the Soviet system lives on to a substantial extent. For example and notably, China and a few other countries retain substantial aspects and components of it (modified to one extent or another). Also notably, single payer or government sponsored health care systems are now the norm around the world instead of the exception. (The US with its failed health system is the exception). Do you think it is a coincidence that they never did it in the prior centuries, but then all of the respectable countries adopted single payer or government controlled health care systems within a few decades after the Soviets introduced this to the world? The Soviet health system proved its success which gave countries such as the UK, France, Japan etc. the motivation to create their own similar systems. So the successful Soviet system lives on around the world in this way. And the US refusal to adopt it is helping to bring the entire US economic system down.
Similarly, although weaker and more nuanced than the Soviet versions, programs involving direct government provision of employment exist in many respectable countries these days. At the very least, in many countries, there are more or less free training programs that guarantee employment on completion. Whereas the US training programs are notorious for guaranteeing nothing, and so those completing a training program in the US (or an “internship”) in the US very often end up within a few years exactly where they were before they participated: unemployed and destitute.
Fourth, (and I am neither a member nor a supporter in any material way because for one thing I don’t live in Russia) but for the record anyone with a brain and the opportunity to for example check the facts at Wikipedia can see that the Communist Party still exists (in Russia) In fact, it has been gradually becoming more popular in the last dozen years or so and is the second most popular party in Russia, pulling about 20% nationally (a percentage which many viable European parties that participate in coalitions only dream of getting).
That will have to do because you can’t be writing a book or even just a full outline of a book in a comments section (even if it is not part of the kiddies’ section of the Internet).
Mr. Miller is operating from a perspective which has become invalid in recent times. Modern Monetary Theory (MMT) is more appropriate to this century and particularly to the US, which is in the enviable position of being able to print, or more correctly digitally create, money with a few keystrokes. Families, individuals and businesses lack this option; budgets and deficits matter to them, but NOT to the US Treasury. Such comparissons are specious at best, lies and campaign rhetoric to deceive voters, at their worst. Everything our Lair in Chief says is just that; GOP/Dems ditto RE:Deficits, wise up folks. We could have, and desperately need, another New Deal tomorrow; Shrub was right (only for once), when he said, "Deficits don't matter", they don't!
See http://moslereconomics.com for more on MMT
I see you've abandonded the concept of 'money is an abstracted representation of value, and is worth only the value it represents', and decided that it's just a fantasy, like some kind of points in a video game.
Why not then just have the government 'digitally create' a few hundred trillion dollars, pass it out and make every American a millionare ?
Wanna know how well this works ? Look at Zimbabwe today. Look at Germany post WW1. A wheelbarrow of deutchmarks got you a loaf of bread, if there was any for sale.
Where did you get your economic concepts ? From playing Fantasy Football ?
You are right and wrong. Deficits don't matter nearly as much as most people think they do. Obviously deficits do matter in that we can not all receive benefits, entitlements, etc. to the extent that everyone has a vacation home and yacht. I think it was Darth Vader who said, "Reagan proved deficits don't matter." Shrub would have needed to flip a mental coin in order to decide.
" Its debt burden, then, consists of the net interest payments on its debt, which will amount to 9.5% of federal revenues in 2011. That’s two percentage points less than the proportion of their income that families devoted to making their debt payments—interest payments and payment on the principal—in the beginning of 2011."
So why all the hysteria? Why are austerity cuts even necessary?
The FORCED CONTRIBUTIONS, withholding taxes, by taxing USAn labor for the purpose of paying interest on the COUNTERFEIT DEBT created by the fraudulent practices of the private banksters needs to be recognized. This is an illegitimate use of debt using criminal means. The banksters then bribe those necessary, politicians, to pay for the crimes of the banksters.
I disagree. The claims of balancing the budget are genuine. Unfortunately, they plan or, at least pretend to do it, on the back of the poor. There's nothing bogus about that.