Raising revenues is central to any responsible effort to reduce deficits, but there is no sign that long-standing Republican resistance to raising revenues has reversed or even softened.
President Biden should do “whatever it takes” to avoid an economic catastrophe. House GOP-led efforts are to blame for the impending debt crisis. In 2011, the GOP’s demands for massive spending cuts sabotaged the Great Recession recovery.
Right now, government money is flowing. But soon the self-appointed guardians of “fiscal responsibility” will call for cuts to Social Security, Medicare, and SNAP, while leaving the defense budget and large tax breaks for the wealthy intact.
What the Social Security actuaries failed to foresee in 1983, when Social Security was last projected to be in long-term balance, wasn’t the Boomer retirement, but rather the fact that the dismal real wage growth of the previous decade.
The biggest issue . . . is that this is a budget that will continue to impose a drag on the economy . . . While the stimulus approved by Congress boosted growth and added between 2-3 million jobs, the steep deficit reduction of the last three years has slowed the economy, costing millions of jobs. With the housing bubble gone, we are missing close to $1 trillion in annual demand and no mechanism in the private sector that will cause it to replace this demand on its own.
The "deficit problem" is man-made. The deficit is now down 60 percent as a percent of gross domestic product. It is down more than the deficit hawks Alan Simpson and Erskine Bowles asked for. This rapid reduction is seriously hurting the economy and jobs, but demands for cuts continue. It is time for Congress and the President to "pivot" to focusing on our real problems: the jobs gap, the wage gap and the trade gap.
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