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.

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. 

DSA Queer Socialists Conference Call

May 25, 2017
· 33 rsvps

Join DSA's Queer Socialists Working Group to discuss possible activities for the group and its proposed structure. 9 pm ET/8 pm CT/7 pm MT/6 pm PT.

 

What Is DSA? Training Call

May 30, 2017
· 40 rsvps

If you're a new DSAer, have been on a new member call, but still have questions about DSA's core values/strategy/core work and how to express these ideas in an accessible way to the media, as well as to friends, family and others who might be interested in joining DSA, this call is for you. 

We will talk through the basics of DSA's political orientation and strategy for moving toward democratic socialism, and also have call participants practice discussing these issues with each other. By the end of the call you should feel much more comfortable thinking about and expressing what DSA does and what makes our organization/strategy unique. 8 pm ET; 7 pm CT; 6 pm MT; 5 pm PT. 70 minutes.

Film Discussion: Rosa [Luxemburg]

May 31, 2017
· 92 rsvps

Join DSA member Jason Schulman to discuss the film Rosa, directed by feminist filmmaker Margarethe von Trotta. View it here at no cost before the discussion. Marxist theorist and economist Rosa Luxemburg (1871-1919) played a key role in German socialist politics. Jason edited Rosa Luxemburg: Her Life and Legacy and has a chapter in Rosa Remix. 9 ET/8 CT/7 MT/6 PT.

Film Discussion: The Free State of Jones

June 11, 2017
· 26 rsvps

Join Victoria Bynum, Distinguished Professor Emeritus of History, Texas State University, San Marcos, to discuss The Free State of Jones. STX Entertainment bought the film rights to Bynum's book of the same title. She also served as a consultant and appears in a cameo scene. What was the Free State of Jones? During the Civil War, an armed band of deserters led by Newt Knight, a non-slaveholding white farmer, took to the swamps of southeastern Mississippi and battled against the Confederacy in an uprising popularly known as “The Free State of Jones.” Joining Newt in this rebellion was Rachel, a slave. From their relationship, there developed a controversial mixed-race community that endured long after the Civil War had ended. View the film here for $6 before the discussion. 8 ET/7 CT/6 MT/5 PT.

Introduction to Democratic Socialism

June 13, 2017
· 5 rsvps

Join Bill Barclay, Chicago DSA co-chair, and Peg Strobel, National Political Committee and Feminist Working Group co-chair, on this webinar for an overview of what we in Democratic Socialists of America mean when we talk about "socialism," "capitalism" and the goals of the socialist movement. 9:30 PM ET; 8:30 PM CT; 7:30 PM MT; 6:30 PM PT.

  1. This webinar is free for any DSA member in good standing.
  2. You need a computer with good internet access.
  3. Your computer must have headphones (preferred) or speakers; you can speak thru a mic or use chat to "speak".
  4. If you have questions, contact Bill Barclay, chocolatehouse@sbcglobal.net.
  5. If you have technical questions, contact Tony Schmitt, schmittaj@gmail.com, 608-355-6568.

Film Discussion: Pride

September 10, 2017
· 7 rsvps

Join DSA members Eric Brasure and Brendan Hamill to discuss the British film Pride (2014). It’s 1984, British coal miners are on strike, and a group of gays and lesbians in London bring the queer community together to support the miners in their fight. Based on the true story of Lesbians and Gays Support the Miners. The film is available for rent on YouTube, Amazon, and iTunes. 8 ET/7 CT/6 MT/5 PT.

Film Discussion: Union Maids

September 24, 2017
· 5 rsvps

 

Join DSA member and labor historian Susan Hirsch in discussing Union Maids (1976). Nominated for an Academy Award, this documentary follows three Chicago labor organizers (Kate Hyndman, Stella Nowicki, and Sylvia Woods) active beginning in the 1930s. The filmmakers were members of the New American Movement (a precursor of DSA), and the late Vicki Starr (aka Stella Nowicki) was a longtime member of Chicago DSA and the Chicago Women's Liberation Union. It’s available free on YouTube, though sound quality is poor. 8ET/7CT/6MT/5PT.