Sanders’ Socialism Speech: America Is For All Of Us, Not Just Wealthy

“I don’t believe in some foreign “ism”, but I believe deeply in American idealism.”
– Senator Bernie Sanders

Sen. Bernie Sanders billed his talk Thursday at Georgetown University as a speech on “democratic socialism,” but it was immediately clear that what Sanders was really talking about were not the ideologies of a Cold War adversary but deeply American traditions of fairness that have been under attack by ideologues brandishing American flags.

Sanders anchored his speech as building on President Franklin D. Roosevelt’s 1944 “Second Bill of Rights” address. “Real freedom must include economic security.” he said. “That was Roosevelt’s vision 70 years ago. It is my vision today. It is a vision that we have not yet achieved. It is time that we did.”

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What Do Candidates Propose To Boost Stagnant Economy?

Thursday’s bad news: Third-quarter GDP lands with thud: just 1.5 percent growth. That is down from 3.9 percent growth the previous quarter. The economy appears to be slowing, partly because of the drag effect of our trade deficit and partly because of the drag on the economy due to austerity policies (federal spending cuts that take money out of the economy).

In the presidential campaign Republican candidates are proposing even more austerity as a solution to the lackadaisical recovery, combined with tax cuts for the rich and deregulation of Wall Street and the giant corporations. Democrats, on the other hand are proposing infrastructure investment and a number of other positive solutions.

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What Is This ‘Cadillac Tax’ Health Insurance Thingy?

You may have heard about the “Cadillac tax” health insurance thing. As with so much else involved with the health care/insurance discussion, policymakers have chosen wording that causes most people to tune out. Terms like “Cadillac tax” have little meaning to regular people because they convey very little information – or they evoke an image that masks its true impact.

When policymakers talk about a “Cadillac tax” on health insurance plans, what they are referring to is an upcoming tax on employers who provide really good health insurance plans that cover lots of things without requiring employees to pay large co-pays and deductibles when they get medical care. These plans cost more, so they are compared to luxury cars that cost more, hence “Cadillac.”

The tax was written into the Affordable Care Act with the consent of the Obama administration, which saw it as a way to limit federal government spending on health care reform. There are people who thing this tax is a good idea, and people who want the tax repealed.

Arguments In Favor Of The Tax

Those in favor of the tax are “market” economists who believe that people’s decisions, even about health care choices, are mostly driven by economic motives. They believe that people are “homo economicus” – a species of people who have good information and make rational decisions based on what will make them (or save them) the most money. These people are seen as “consumers” who respond to prices over other priorities in their lives.

They claim that with good health insurance, “consumers have little incentive to insist on cost-effective care and providers have little incentive to provide it.” The idea is that a tax on employers who offer good health insurance will benefit the country and:
1) create market forces that will reduce the country’s health care costs over time, and,
2) Translate as higher pay to employees because the employers are spending less on health insurance.

These economists believe that the better the health care plan, the more people will go to doctors and specialists when they don’t really have to. They believe people use high-cost medical procedures and drugs because they do not shop around for the lowest-priced alternatives. They believe that making people pay higher co-pays and/or deductibles and limiting which doctors they can see will cause them to “consume” less and stop “overutilizing” expensive medical care.

They say that setting high co-pays and deductibles, and limits on doctors, will make people put “skin in the game” and:

1) Stop knowingly using medical services needlessly. People know when they don’t really have to see a doctor but do so anyway because they don’t have to pay too much.
2) “Shop around” for the lowest-cost doctors (of those offered) when they do need medical care.
3) “Shop around” when a drug or procedure is needed, whether it’s for fixing a broken arm or treating cancer, and will choose the lowest-cost options.

The Argument For Repealing This Tax

That was the market economist side of the “Cadillac Tax” argument. They want the tax to take effect starting next year, as planned. The other side is people who want to repeal the tax. They want citizens to have more access to good health care, with low co-pays and low deductibles and a wide choice of doctors and care options.

On a conference call Thursday, Economic Policy Institute (EPI) Research Director Josh Bivens and Senior Economist Elise Gould outlined arguments against this tax. They explained that research (and basic common sense) shows that consumers are not equipped with information and knowledge that enables them to cut back only on unnecessary or ineffective care. In other words, people go to doctors to find out if they need medical care, because the doctors are the ones trained in medicine, not regular people.

With high deductibles and co-pays, people cut back on health care across the board. They don’t see a doctor when they need to, which can cause them to be sicker when they finally do see a doctor (which is more expensive and undoes the money-saving efforts) or just suffer, which should not be a policy goal (unless you are a conservative or a psychopath).

In EPI’s “Tax on Expensive Health Insurance Plans Could Cut Care Along With Costs,” Bivens and Gould write,

Evidence shows that making health care more expensive does induce people to consume less of it. But the same evidence shows that people do not cut back only on care that is ineffective or somehow luxurious; instead, they cut back across the board. Expecting sick Americans to decide on the fly in an opaque and uncompetitive marketplace what health care is cost-effective–and what is not–is an unrealistic and unfair approach to containing costs.

While overall costs may be pushed down by the excise tax, this is a good outcome only if one believes that the health care squeezed out is merely the ineffective kind. But a lot of welfare-improving care may also be a casualty, and for some patients, cutting back on medically indicated care because of the increased cost-sharing could increase their overall spending. For example: some patients who cut back on low-cost pills to contain cholesterol end up in emergency rooms.

Cutting utilization is also a limited cost-containment strategy…

One more thing: the market economists claim that employers will pass along savings from lower-cost plans to employees as higher pay. What is the fat chance of that? What world do they live in? World economicus? I mean, really.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

The Wild Ride Gets Wilder – Only Government Spending Can Fix This

The world is out of balance. Everyone’s nervous. There is a glut of money floating around the world and no one offers a “safe place” to put it. The stock market is way up, way down, way up, way down – sometimes all on the same day. China’s currency is having dramatic swings while the U.S. has an enormous, humongous trade deficit.

Super-wealthy people are making and losing hundreds of millions (sometimes billions) in a day – none of it on making or doing actual things that matter. Inequality is soaring. (The top 25 hedge fund managers earn more than all kindergarten teachers in the U.S. combined.) And all around the world, there’s very little actual economic growth.

Meanwhile, most people barely (or don’t) have enough to get by.

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Trump: Don’t Make Corporations Pay Their Taxes

Republican economics has been stated a thousand ways by a thousand (always paid) voices. But the basic idea behind all the schemes has been hard to pin down. Finally Republican front-runner Donald Trump has spelled it out in a way anyone can understand.

Thursday’s Progressive Breakfast (you should subscribe, it’s free, it’s really good) contains a story in which Trump clearly articulates the Republican/Billionaire/Wall Street case for a low-or-zero tax on corporate profits: “because they don’t want to pay the tax.”

Trump Sides With Multinationals
Donald Trump backs repatriation in Time interview: “Pfizer is talking about moving to Ireland. Or someplace else … Do you know how big that is? It would wipe out New Jersey … They have $2.5 trillion sitting out of the country that they can’t get back because they don’t want to pay the tax. Nor would I … We should let them back in. Everybody. Even if you paid nothing it would be a good deal. Because they’ll take that money then and use it for other things. But they’ll pay something. Ten percent, they’ll pay something.”

There it is in a nutshell. The Republican case for low or no taxes: “because they don’t want to pay the tax.”

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When The Real World Confronts Trade Theories, The Real World Wins

I had a conversation over the weekend about the Trans-Pacific Partnership (TPP). She’s for it, because “more trade is always good.”

TPP covers a whole lot more than what we would think of as “trade.” Regardless, let’s look here at the idea that expanding trade is always good.

Trade Is Good

Trade is good. We all at the very least trade our time for our pay. We might make or grow or draw or write something that we sell (trade) for money. Trade is basic.

But how we trade always makes a difference. If we trade our time and get paid too little, is that a good thing because it was a “trade”? Obviously the way trade gets done – the rules/policies that are in place – makes all the difference. So the question to consider is whether our current international trade policies as applied under our current economic order a good thing or a bad thing for We the People of the United States.

Cross-Border Trade

“Increasing cross-border trade” sounds like a worthy goal. But if you close a factory in the U.S., move the machines and jobs to a low-wage country, then bring the goods back here to sell in the same stores, you have just “increased cross-border trade.” How should we look at this?

The people now making the goods are paid much less, the investors who own the factory are pocketing much more. Sounds bad, unless you’re one of those owners.

Economists will tell you this is good because fewer of the resources of your economy are being expended to obtain whatever that factory was producing. Those resources can now be applied elsewhere by the investors, toward more productive investment. Sounds good.

Theoretically those American workers will now be freed up to do more productive work, potentially at a better pay rate. Sounds good.

But the way our current economic order works, those resources (the difference between what the American workers were paid and the lower costs of making the stuff somewhere else) are more often applied to the offshore tax-haven accounts of the elite investors than toward “more productive” investments. Sounds bad.

And the way our current system is working, without this new investment those workers remain unemployed, competing with the rest of the people in the workforce, which drives down everyone’s wages except for a few at the top. The reality is that if people laid off due to trade find new jobs, it is at a lower rate of pay. Sounds bad.

Economic theory confronts the reality of America’s current economic order and falls short. The elites use rigged “trade” deals to knock down labor costs. Instead of applying the gains toward investment in our economic future and higher wages for America’s workforce, they apply it to their bank accounts.

Comparative Advantage

The idea of comparative advantage says that countries (regions, etc.) should do what they are good at and trade with others for the things the others do better. Some countries are good at growing bananas and they can trade them for things they can’t grow or make.

But what counts as a comparative advantage?

A few years ago The New York Times took a look at the shift of manufacturing (and associated jobs) from the U.S. to China, in the report “How the U.S. Lost Out on iPhone Work.” The report is known for the Steve Jobs quote, talking to President Obama, saying, “Those jobs aren’t coming back.”

The reason Jobs said those jobs are not coming back was that in China the workers sleep in dormitories, 12 to a room, and can be rousted out of bed at any hour to complete “rush” jobs. They can be made to stand all day, work with dangerous chemicals, are paid very little, cannot organize unions, cannot even vote for a government that would make their lives better.

In other words, China offers a “comparative advantage.” That advantage is that they are not a democracy, workers have no rights and no voice. China is very “business-friendly.” So why would a company like Apple use American workers when they can use workers kept in these conditions?

Our democracy is a comparative disadvantage in world trade. Sounds bad.

Again economic theory confronts the reality of America’s current economic order and falls short. America had factories, China offered low-wage workers and the opportunity to freely pollute. Elites moved the factories to China. Elites use “trade” to attack democracy, turning government of, by and for We the People into a comparative disadvantage in world markets.

Click to see a video of Ian Fletcher talking at, of all places, the Heritage Foundation about his book, “Free Trade Doesn’t Work.” At 21:06 to 25:47 minutes he takes a very good look at the idea of comparative advantage in the real world. In sum:
1) Absence of externalities is not a competitive advantage. The pollution is still there, the workers are still exploited.
2) Capital mobility means you are allocating your capital outside of your own economy.
3) Comparative statistics look at a snapshot, a fixed point in time. If China doesn’t already have a factory making X it is not comparative advantage to go open one there. It is not the best move today if the other country is not already producing the thing for less.

Economies Of Scale

When trade is “opened up” across a border it doesn’t mean that new customers suddenly appear, anxious to buy goods and services produced by America’s small businesses. It’s not like there were no producers and suppliers on the other side of that trade border. The goods and services of an economy were likely already being supplied by someone.

Acme Widget, based in the American town of Plainville, is not suddenly going to get orders from small towns all across the new trading partner Tradonia. Tradonia already has suppliers of widgets. Those suppliers will just as easily come sell their widgets in Plainville.

Economists will say that “opening up” trade across a border increases competition, which benefits consumers. But this is not how it actually works. What has really opened up is a larger playing field with more opportunities for big companies on both sides of trade borders to dominate a larger market than the one they had been dominating, with a resulting decrease in aggregate employment.

In our current economic order big companies have advantages because of their size, and unfortunately rules are made based on which companies are ready to shell out the cash to influence how the rules for competition and domination of industries are made. Larger companies dominate and remove smaller competitors. One or two of these companies will get most of the business in both countries and become very large; the others will be gone. Due to economies of scale the overall widget manufacturing employment will decrease. The new monopolies and near-monopolies will then have the ability to charge what they want.

Once again economic theory confronts the reality of America’s current economic order and falls short. Opening up trade borders is more likely to bring further consolidation of giant companies, not more competition.

Reality Wins

These are just a few examples of the problems of academic trade and economic theory confronted with the realities of what actually happens in actual countries.

Another economic theory says that trade will balance as a result of currency adjustments. Supposedly when a country is running a surplus its currency rate will increase and things made in those countries will cost more, so purchases will shift back to the country that had a deficit. But in the real world, the United State competes with real countries that don’t play this way. Our country has an enormous, humongous trade deficit and has run continual trade deficits every single year since the late 1970s when “free markets” and “free trade” ideology came to dominate. This is because we follow an economic theory ideology, and other countries look at reality and adjust. So they win.

Reality trumps economic theories and ideologies – Every. Single. Time.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Next Big One: Repatriation Tax Holiday Giveaway To Corporations

Here comes the next big one. Now that the corporations have fast-track trade authority in the bag, they are trying to push a huge, huge tax giveaway through Congress. We have to get the word out so this doesn’t just sneak through. We can’t let them continue to rig the system against us like this.

Up To $770 Billion Is Owed On $2.2 Trillion In Corporate Profits Stashed In Tax Havens

You might have heard about all that money the giant corporations have been stashing in tax havens so they can dodge paying their taxes. You might not have heard how much they owe us. Corporations have somewhere around $2.2 billion of “offshore” profits stashed in tax havens. They owe up to 35 percent in taxes on that money. That’s right; they owe up to $770 billion that We the People could have right now for our roads, schools, health care, scientific research, space exploration, to forgive student debt … we could have free college tuition, expand Social Security, high-speed rail across the country…. Instead, we’re told we can’t have these things because there are “budget deficits.”

And on top of that, at least another $50 billion per year of tax money is kept from us because of this scam.

Congress could just tell these corporations to pay up, and We the People would have up to $770 billion to use to make our lives better, and another $50 billion or more each year.

See if you can guess what Congress is getting ready to do instead?

Tax Holiday

Right now the giant, multinational corporations owe up to $770 billion in taxes on the $2.2 trillion they are holding outside the country in tax-haven mailbox subsidiaries. Right now. They have the cash in the bank (in tax-haven countries) and could write checks tomorrow if Congress told them to. Again, this is taxes they already owe but haven’t paid. Think of the things our country could do with that money.

But instead …

Congress is proposing to give these companies a tax holiday and let them off from paying the taxes they already owe on that money. There is all kinds of complicated language being used to mask what is happening, but it’s really simple: Some members of Congress are proposing letting them off from the taxes they already owe on “offshore” profits, and then letting them off from paying taxes on future profits made “outside the country” from now on.

For example, the Charles Schumer-Rob Portman bill in the Senate will tax this money (on which 35 percent is already owed), “at a rate significantly lower than the statutory corporate rate.” And then it will cut tax rates on future “offshore” profits forever.

Quick question: For years these companies have been moving jobs, production and profit centers out of the country to take advantage of this tax dodge. If they are rewarded for this with this huge tax cut, how many more companies will move jobs, production and profit centers out of the country from now on? Bonus question: Will there be any jobs, production or profit centers left inside the U.S. if Congress lets companies off the hook from taxes on profits made from moving jobs, production and profits centers out of the country?

Don’t Let this Sneak Past Us

The corporations and billionaires count on these things sneaking through under cover of complicated language, so we never find out what is happening to us. Later they tell us “we’re broke” and there is no way to “pay for” things like roads, schools, and other needs. They tell us we have “deficits” that could “bankrupt” us, so college tuition has to go up, we have to pay to use toll roads, they have to cut funding for schools, we can’t have high-speed rail, they can’t afford to do scientific research or space exploration or fight global warming or fix up national parks, and so on.

But what is really going on is the game is being rigged. Corporations get huge tax breaks and subsidies, a few billionaires and plutocrats get the cash, and We the People, the 99 percent, have to make up the difference.

We need to get the word out about this. This is the next big one they are trying to slip through before we know what is happening to us.

We have to fight this. We have to make noise. Even if we don’t win this, at least we will know what happened this time. Then, later, when they come back and say there’s no money to do things that make our lives better, we will be able to see through the smokescreen. We will know where the money went, and eventually enough people will understand how the game is being rigged – and stop it.

Congress should tell the giant, multinational corporations that it is time to pay the taxes the already owe on “offshore” profits. They should not reward companies for moving jobs, production and profit centers out of our country.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Export-Import Bank Shut Down, China Gets The Business Instead

Republicans have shut down the Export-Import (Ex-Im) Bank as of midnight, July 1. They are touting it as a blow against “corporate welfare” and “crony capitalism.” But who are the real winners here?

It’s certainly not us workers.

Last year the bank helped finance almost $30 billion worth of U.S. exports — things made here, by workers employed here. Germany, Japan, China and many other countries have similar agencies. Now they will be picking up that business. Our trade deficit will increase. Jobs, wages and factories will move elsewhere.

Export Assistance

The United States does not have an economic/industrial policy that supports American manufacturing. Meanwhile, other countries support their industries. As a result, the U.S. has an enormous, humongous trade deficit, trading American assets for foreign-made commodities. We lose jobs, factories, companies, and entire industries to countries that understand the long-term benefits to their economies of national investment in key, strategic industries. On the other hand, a few people here get enormously wealthy from selling off our net worth in the short term. So, there’s that.

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Enormous, Humongous May Trade Deficit Slows Economy

The U.S. Census Bureau reported Tuesday that the May goods and services trade deficit was an enormous, humongous $40.9 billion, up a bit from an enormous, humongous $40.7 billion in April.

Our enormous, humongous trade deficit is a measure of how many jobs, factories, companies and industries we are losing to our pro-Wall Street trade policies. A trade deficit drains our economy of wealth, jobs and future economic opportunity.

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Trade Deficit At Root Of Negative Economic Growth Report

The Bureau of Economic Analysis reported today that the gross domestic product (GDP) fell at an annual rate of 0.7 percent in the first quarter of 2015. Much of the reason is our trade deficit.

The Bureau of Economic Analysis reported today that the gross domestic product (GDP) fell at an annual rate of 0.7 percent in the first quarter of 2015.

Our enormous, humongous trade deficit is literally draining our economy. The trade deficit is because we import things we used to make here and sell there, but we allowed companies to move the factories and jobs there in order to force wages down here. This makes a few plutocrats vastly wealthy but it is killing jobs, wages, factories and our middle class.

Trade Deficit Subtracted 2 Percent From Growth

The White House issued an analysis by Jason Furman, Chairman of the Council of Economic Advisers, explaining this was because of “harsh winter weather, tepid foreign demand, and consumers saving the windfall from lower oil prices.” The statement largely (and correctly) blamed “net exports.”

From the White House analysis: “A decline in the trade balance was another major contributor, partially reflecting the continued drag on U.S. exports from the slowdown in foreign growth. Indeed, net exports subtracted nearly 2 full percentage points from quarterly GDP growth.”

“Decline in the trade balance,” “tepid foreign demand” and “net exports” are other ways of saying our “trade” policies have caused an enormous, humongous trade deficit that sends away jobs, factories and our ability to maintain a middle class. A negative “net export” balance means we import more than we export, which means we have a trade deficit. We have had a trade deficit every year since the neoliberal “free trade” and “free market” ideology ascended in the late 1970s. But you won’t find the words “import” or “trade deficit” anywhere in the statement.

Now that we know what “net exports” really means, here it is again: “net exports subtracted nearly 2 full percentage points from quarterly GDP growth.” The trade deficit subtracted almost 2 percentage points from the quarter’s growth.

Close Factories Here And Move Them There = Trade Deficit

We have a trade deficit because we make “trade” deals with countries that sell to us without buying from us and then we don’t do anything to fix it. A lot of this “trade” deficit is because companies here close factories in the U.S. that made goods to sell in our retail outlets and move them to countries with little democracy, resulting in low wages and few pollution regulations. They send the goods back here to sell in the same outlets. Our “trade” deals let them do this with no cost or penalty. The executives and investors then pocket the difference in wages and cost of controlling pollution for themselves. This is why the plutocrat class that now controls our government supports these so-called “trade” deals. (It’s also why these “trade” deals have to be kept secret until Congress preapproves them with Fast Track.)

The Wall Street Journal’s At A Glance blog explains how the trade deficit cut into growth:

Trade was the biggest drag on top-line GDP figures in the opening months of the year. U.S. exports of goods fell by the most since the first quarter of 2009–the midst of the recession–while overall imports climbed. The widening deficit subtracted 1.9 percentage points from economic growth. A stronger dollar has tamped down overseas demand for U.S.-made goods while making foreign products cheaper to import. Meanwhile, congestion at West Coast ports constrained trade earlier in the year.

In “Yes, Trade Deficits Do Indeed Matter for Jobs,” Josh Bivens explains (in economese) at the Economic Policy Institute how the trade deficit is creating jobs, but not here – especially in manufacturing. He blames the trade deficit largely on currency manipulation by our so-called “trading partners”:

Trade deficits occurring when the U.S. economy is stuck below full employment and at the zero lower bound (ZLB) on short-term interest rates are a drag on economic growth and overall employment, period. And this describes the U.S. economy today, so a reduction in the trade deficit in the next couple of years spurred by a reversal of trading partners’ currency management would boost growth and jobs.

[. . .] if the trade deficit was reduced in coming years by ending widespread currency management by our trading partners, the United States would see a pick-up in output and employment growth.

[. . .] Yes, the relationship between trade deficits and jobs can be nuanced, but it’s really not that hard. In today’s U.S. economy, trade deficit reductions engineered by ending currency management would boost U.S. output and employment, and trade deficit reductions will (all else equal) always and everywhere boost manufacturing employment.

This Is The Result Of Intentional Policy Choices

From the recent post, “Enormous, Humongous March Trade Deficit Creating Jobs Elsewhere“:

This didn’t just suddenly happen. Globalization is not some kind of inevitable natural process of history that has caught up with us. This was and is the result of intentional policy choices, designed to force deindustrialization, break unions, drive down wages and benefits and increase inequality as that pay differential is pocketed by a few. This is the result of the “free market, free trade” ideology that rose up in the late 70s. Free trade policy was and is designed to give a few plutocrats and their giant corporations — “the 1 percent” — increased power over governments.

We have a trade deficit (negative “net exports”) because we import more than we export. A lot of this is imports of things that used to be made here by people who used to be paid here. Congress lets this go on because it makes a few plutocrats vastly wealthy – at the expense of the rest of us.

The trade deficit is eating our economy, closing factories, killing jobs, forcing wages down. But the White House isn’t allowed to say that because they want fast track trade authority to pass next week.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.

Conservatives Choose Govt Hatred Over Markets

Conservatives are supposedly all about markets. Markets should decide, not voters. But when it comes to the law of supply and demand for government debt, they go blind.

Greg Ip in the Wall Street Journal poses this surprising question: “Is Government Debt Too Low?

The interest rate that rich countries with super-safe debt (in the case of the eurozone, that means Germany but not Spain) pay is astonishingly low: lower than the growth rate of nominal gross domestic product (that is, GDP before subtracting inflation). In the U.S., the Treasury yield has gone from roughly equal to growth in nominal GDP in 2005 to 3 percentage points lower today.

By Mr. [Brad] DeLong’s reckoning, this means those countries are borrowing too little. Bond yields and prices move in opposite directions, so low government bond yields equate to very valuable government bonds. Mr. DeLong asks, “Isn’t the point of the market economy to make things that are valuable?” Since the debt of rich countries is “very cheap to make… shouldn’t we be making more of it?”

Say What?

Here is the argument. There is a huge demand for U.S. government bonds. There is so much demand that interest rates are exceptionally low. You almost have to pay the government to hold your money.

Remember the “law of supply and demand”? When there is a huge market demand for something, isn’t that supposed to mean that more of that thing should be produced?

Shouldn’t government be supplying more bonds? Saying that the government should be producing more government bonds is another way of saying the government should borrow more. This is what it means when the government “makes” bonds to sell.

If the government borrowed more, it could use the proceeds to maintain and modernize our infrastructure (which has to be done at some point, no?) We could build out a modern energy grid, high-speed rail across the country, double the number of community colleges, expand scientific and health research… And of course doing those things would end up employing millions, and making wages go up.

And if everyone had the job they wanted and wages went up, wouldn’t that boost market demand, which would trigger business investment?

And if we did all of those things – high-speed rail, smart energy grid, modern infrastructure, expanded scientific research, expanded educational opportunity, wouldn’t it mean that our economy was positioned to prosper, and everyone’s lives would be better?

And wouldn’t a revitalized private economy mean that people didn’t need to park their money in government bonds, so the supply wouldn’t have to go up any more to meet demand? And wouldn’t all the tax revenue from that revitalized private economy and full employment pay off those bonds over time?

“Gubmint Spending”

But no, we can’t maintain, never mind modernize our infrastructure. We can’t expand educational opportunity. We can’t increase scientific and heath research. We can’t do any of those things. Because government spending. We have to cut back, cut back, cut back.

Conservatives say they are about the belief that markets are better than government (and, by implication, better than democracy). But when it comes down to it, they really are about one and only one thing: They hate government and want to strangle it, period – no matter the cost to our economy and our people.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.