The whole debt-ceiling-default debacle is NOT about the amount of debt the US government owes. It is about a fundamental argument about the government should be doing.
The far-right "tea-party" faction of the party formerly known as the Republicans is all about privatizing virtually everything including education, social security, medicare, prisons, roads and based on the current proportion of "contractors" in Iraq and Afghanistan. Do you realize that since 2007, contractors (aka mercenaries) have outnumbered the number of US military forces in Iraq, even during the height of the surge http://articles.latimes.com/2007/jul/04/nation/na-private4 .
Much to the chagrin of those that want to dismantle the social safety net, when confronted with specific measures, most Americans vehemently disagree with the tea party. Now they have found a new strategy by making the national debt the bogey-man. Unfortunately as so often happens when comparing politco-speak with reality, the rhetoric falls short.
Interest rates now and in recent years have been so low, that despite the total amount owed by the US Treasury, the cost of servicing that debt is at its lowest point since the 1970s. At 1.6% of GDP paying the interest is about half of the 3% that it cost during the Reagan-Bush 1 era. That means it actually it costs the treasury less to borrow than pay cash.
Yes the national debt is large and once we get the economy growing again, we need to address it (by slashing military spending for one, do we really need more aircraft carriers?) but that is not what this fight is about.
As usual the mainstream media has done the American people a huge disservice by continuing the facade of "objectivity" and parroting messages from both sides without doing any real analysis of the actual facts.
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Balloon Juice » And Now, An Update From Reality
And Now, An Update From Reality. by Tom Levenson. As we head towards either the completely unforced self-immolation of default, or the almost as self-defeating response of belt tightening amidst a rec…
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If you consider the unfunded liabilities of entitlement programs, your opinion might (and should) change. That's a very real debt concern.
If you consider the unfunded liabilities of entitlement programs, your opinion might (and should) change. That's a very real debt concern.
Those unfunded liabilities could easily be addressed by changes to the payroll tax structure. By raising the cap on income subject to the payroll tax and making the first $20,000 or so in income exempt, enough revenue could be produced while also giving a major boost to working class taxpayers and small businesses that pay a disproportionate amount under the current system.
Of course despite all of the posturing by republicans about supporting small businesses, the reality is that they have done virtually nothing to help them or most of the US population while continuing to support tens of billions of dollars in subsidies for big oil companies, agri-businesses and other huge corporate donors.
Those unfunded liabilities could easily be addressed by changes to the payroll tax structure. By raising the cap on income subject to the payroll tax and making the first $20,000 or so in income exempt, enough revenue could be produced while also giving a major boost to working class taxpayers and small businesses that pay a disproportionate amount under the current system.
Of course despite all of the posturing by republicans about supporting small businesses, the reality is that they have done virtually nothing to help them or most of the US population while continuing to support tens of billions of dollars in subsidies for big oil companies, agri-businesses and other huge corporate donors.
I don't think there's any such thing as an "easy" solution to $115 T in unfunded liabilities (http://www.usdebt.kleptocracy.us), and am quite certain tax code changes are insufficient on their own to provide a solution. I can't envision a scenario where major restructuring or elimination of entitlement benefits doesn't need to occur, seeing as they are the major contributors to the massive liability column.
I don't think there's any such thing as an "easy" solution to $115 T in unfunded liabilities (http://www.usdebt.kleptocracy.us), and am quite certain tax code changes are insufficient on their own to provide a solution. I can't envision a scenario where major restructuring or elimination of entitlement benefits doesn't need to occur, seeing as they are the major contributors to the massive liability column.