How to Solve the Phony Deficit Crisis

Make the rich and corporations pay their fair share and end the wars and military hardware spending.

What is the cause of the $14.8 trillion dollar long-term federal debt?

Conservatives claim that runaway spending is the cause of the long-term federal debt burden, which has risen from $1.5 trillion dollars in 1981 to $14.8 trillion today. But the true cause of the federal debt has been thirty years of tax cuts for the rich and corporations.

Over $9 trillion of the $14.8 trillion dollar deficit came about due to the huge deficits run up during the Reagan and Bush II administrations, due to their tax cuts for the rich and their extravagant military spending.  The Obama administration is only responsible for $3.8 trillion of the debt. Much of that is due to tax revenue lost due to the Great Recession, and an $850 billion dollar stimulus program that most economists agree saved 1.5-2.5 million jobs.

The best long-term way out of debt is to reverse the regressive Reagan and Bush tax cuts, cut wasteful defense spending, and create jobs that restore long-term growth. (Center on Budget and Policy Priorities http://www.cbpp.org/cms/?fa=view&id=3490.)

Conservatives have intentionally starved the federal government of revenue so they could slash social spending, including programs that insure all of us against the risks of unemployment, disability, and old age. Conservative strategist Grover Norquist famously  proposed to “drown the baby” of reduced government programs in the “bathwater” of radically diminished tax revenues.

Why are the Reagan and Bush tax cuts for the wealthy at the heart of the Federal deficit problem?

The Reagan and Bush II tax cuts – in which 80 per cent of the benefits went to the top ten per cent of income earners – cost the federal Treasury annual revenue equal to 4.2 per cent of Gross Domestic Product.  Reversing those tax cuts on just the top one per cent of income earners would immediately yield $160 billion in additional annual revenue. Restoring tax rates for the top ten per cent to the levels of the 1960s would yield $350 billion dollars in annual revenue. (See The Tax Policy Institute http://wwww.taxpolicycenter.org/briefing-book/background/bush-tax-cuts/reagan.cfm)

If the top ten per cent of income earners paid taxes at the rate they did in the prosperous 1960s that alone would achieve a $3.5 trillion decrease in the federal deficit over the next ten years. This simple reform of tax policy would more than double the $1.5 trillion of deficit cuts over the next ten years that the Congressional Super Committee is supposed to achieve in proposals due Nov. 25th.

We can decrease the deficit just by restoring a fair tax system and without cutting spending on Social Security, Medicare, and Medicaid or cutting spending on education, transportation, research and development and income assistance for the poor and unemployed.

Isn’t Federal Government spending out of control?

The truth is that the United States is the land of small, not big government. Of the thirty advanced economies that make up the OECD, the United States ranks next to Turkey as having the lowest level of government spending as a share of GDP. European countries  may have higher taxes, but their citizens  enjoy universal health care and child care programs (including paid paternity and maternity leave). In contrast, the United States finances most local government expenditure, including education, through regressive property and sales taxes.  No wonder that many working and middle class people feel that they are overtaxed. If the United States had a fairer tax system, we could readily fund the more extensive set of social rights that most citizens in advanced societies have.

 The rising costs of Medicare and Medicaid are not the result of excessive government spending, but of the failure of a profit-driven, corporate-dominated health care system. Twenty-five per cent of private health care dollars go to wasteful insurance company advertising and paperwork. As Medicare and Medicaid only spend seven per cent of their health dollars on administration, the most effective way to rein in medical cost inflation would be to institute a single-payer health insurance system similar to the successful ones  in France and Canada.

Why is the Super Committee discussing another round of $1.5 trillion in spending cuts? Why has even the Obama administration already agreed to $900 billion in spending cuts over the next ten years and proposed an additional $900 billion in their September 19, 2011 budget proposals?

Corporate think-tanks have engaged in a thirty year propaganda campaign to justify slashing tax rates for the rich and corporations while cutting social programs that benefit the middle and working class and the poor. They have created a panic about a long-term federal deficit that their own tax cut policies caused.

The incessant propaganda of these media-connected “experts” has led not only Republicans, but also most mainstream Democratic politicians to believe that our economic crisis is not due to the rapacious and speculative behavior of corporate America, but by profligate government spending on “entitlements.”

We must demand that the Super Committee prioritize job creation and alleviate the deficit “crisis” by restoring progressive taxation on the rich and corporations and cutting wasteful military spending. We must demand that they not cut entitlement programs or vital social spending. 

Starting a Local Chapter from Scratch (9pm Eastern)

October 04, 2016 · 8 rsvps
Webinar, RSVP required for sign in information

So you are now a member of DSA, but there is no local chapter where you live. You are thinking of starting a local chapter, but you're not quite sure how to do it.

In Starting a Local Chapter from Scratch you will learn:

  • how other locals got started in recent years
  • how to find out who is already a member
  • the importance of a comrade
  • how to recruit new members
  • the importance of a mentor
  • how to become a recognized organizing committee
  • how to become a chartered local
  • what works best to bring new people in.

Join us for our latest organizing training for democratic socialist activists: DSA’s (Virtual) Little Red Schoolhouse.

Instructor:

  • Steve Max, DSA Vice Chair and one of the founders of the legendary community organizing school, The Midwest Academy

Training Details:

  1. Workshops are free for any DSA member in good standing.
  2. You need a computer with good internet access.
  3. Your computer must have preferably headphones or else speakers; you can speak thru a mic or use chat to "speak".
  4. If you have questions, contact Theresa Alt talt@igc.org 607-280-7649.
  5. If you have very technical questions, contact Tony Schmitt schmittaj@gmail.com 608-355-6568.
  6. You can participate in every webinar or just attend once in a while.
  7. Workshops will generally be on weekends or evenings.
  8. Participation requires that you register at least 45 hours in advance -- by midnight Sunday for Tuesday's webinar.

NOTE: This training is scheduled for 9:00pm Eastern Time (8pm Central, 7pm Mountain, 6pm Pacific, 5pm Alaska, 3 pm Hawaii).

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DSA New Member Orientation Call

October 19, 2016 · 22 rsvps
DSA New Member Orientation

You've joined DSA - Great. Now register for this New Member Orientation call and find out more about our politics and our vision.  And, most importantly, how you can become involved.  8 PM ET; 7 PM CT; 6 PM MT; 5 PM PT.

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