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Sunday, October 19, 2014

Who's responsible for the US's massive debt? You and I!

Why does the President always get blamed for the economy, but Republicans in Congress get a pass?

To take one statistic that President Obama is often cited for by his critics, long-term unemployment. Those numbers have risen because of things like Baby Boomers leaving the workforce to retire, among other positive signs. The influence of retiring Boomers on the economy and statistics like jobs numbers will continue as the wave of Boomers grows, and peaks. Whoever is President in that period should see that number rise, and that's a positive sign that the economy is strong enough that they feel confident enough to retire rather than stay working. 

So when his critics - say everyone at Fock Snooze or the rest of the Conservative talking heads - cite these numbers, they should - but they don't - discuss why the numbers have changed. It's disingenuous to suggest they're something they're not.

As for the rising debt, what other course would  he have taken? It's entirely incorrect to use the family budget comparison that people like Paul Ryan employ - families can't print new money as needed nor are family budgets comprised of billions of line items; the complexity difference should suggest that anyone using the comparison really does not understand the complexity of the Federal economy - but that's often cited by budget conservatives as reason to cut the budget. 

Neither a family nor a nation can cut its way out of debt. The only hope is to raise income. For the family, that means a new revenue stream - someone else working or someone bringing in more money. But for a government, that means helping citizens make more money so tax revenues will rise proportionately, which in turn are used to pay down the debt.

But, just like FDR used debt to rebuild our economy following the Great Depression, had we not incurred new debt, our economy would have flatlined because in order to make money available to lenders - banks - to lend to businesses to finance new ventures or expansions in order to grow the economy, the US had to borrow it from abroad. At that point, new money can be made available - printed or made electronically utile - for workers who then spend it and it recycles throughout the economy, including a portion of which goes to pay down the debt.

This is also one of the reasons that being tied to a gold standard is like having an albatross around one's neck. If you only have a specific amount in the treasury, you can only print notes or make electronic funds available in that amount. A gold standard note - or even a treasury note for that matter - is a check. A gold standard bill is owned by the government, whereas a treasury note is owned by the central bank. So the more money you must print as both your population and economy grow, the less each note is worth because just like your own checking account, if you have checks and have to split the money in your account evenly between them - just as each $1 note is worth the same as every other - then the notes - or checks - become worth less the more you have to write or print. Simple math. But being able to borrow new money - incur debt - allows the government to add money to the treasury as needed to insure that everyone has money available to them. Yes, wealth still accumulates, but with a gold standard, we would have long ago run into the situation wherein the wealthy would own everything and the poor would own nothing because, eventually, the wealthy would have ended up with ALL of the limited gold-backed notes. The problem of continuing down that road is self-evident. It's not even up for discussion, and that's why even fiscal conservatives only mention it - the few who actually understand it, that is - when the rabble get fired up about it by some radio dittomonger. 

No President creates jobs. None. He doesn't own the companies that actually create them. All he can do is to make enough money available that banks feel comfortable enough to lower interest rates - following the Fed's lead - and making massive amounts of money available to investors so that they feel comfortable enough to borrow. 

That money has been available for several years now. But what has happened is that multinationals have used the opportunity to move either their headquarters or their operations offshore to increase their bottom lines while putting Americans out of work, and they're doing it on American taxpayers' dimes. Or trillion-dollar notes, as the case actually is. The President can't stop that. Congress must. And both John Boehner and Mitch McConnell have refused to allow legislation to pass that will prevent American taxpayers' money from being used abroad. 

Add to that that Conservative media like Fock Snooze and others have used the opportunity to fearmonger rather than unite the republic. 

The debt has grown because people think that jobs aren't coming back. They are. 

The debt has grown because people think that the government - meaning the President because they give the real problem, Republicans in Congress, a pass - isn't doing enough, so it has to continue to borrow money to make more and more of it available - which it is in unprecedented measure - in order to create new jobs. The jobs are there. What's not there is an honest media which will put partisanship aside and tell the truth.

The debt has grown because American corporations have used American taxpayers' money to fund their overseas expansions and tax evasion.

The debt has grown because Americans have been duped into thinking that the economy is too complex for them to understand unless the false equivalence of a family budget is used, and they can't make sense of it because you can't explain a complex system of that order using an example that doesn't fit.

The debt has grown because Americans have been lied to for so long, so deeply, and so broadly that they think that the guilty parties are innocent, and the innocent parties are guilty. 

The debt has grown because Americans demand cheap goods from abroad. We want to shop at Walmart and Kmart and Target and dollar stores, and we want cheap goods, and the only way to secure those things is if you have enough money in your account to make your currency worth more than that of the person from whom you're buying things.

The debt has grown because we demand that it grow.

Who's responsible for the debt growing? You and I.