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Old 05-12-2004, 11:38 AM   #1
Lurikeen
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Default Deficit spending

Here is something other than prisoner abuse and torture...

What Greenspan won't admit about deficit
By Robert Kuttner | May 12, 2004

ALAN GREENSPAN is a gold-plated hypocrite. Last week the Federal Reserve chairman, speaking at a conference in Chicago, warned that the endless federal deficits had become "a significant obstacle to long-term security because the budget deficit is not subject to correction by market forces." What does Greenspan think caused the deficit -- sunspots? He doesn't deign to say. But everyone else knows. While increased military spending is part of the story, the huge imbalances that rightly worry the Fed chairman are mainly the predictable result of President Bush's immense tax cuts.

At the time of their enactment, not only did Greenspan fail to warn against the danger; he even gave tax cuts his support. Greenspan's early ideological moorings as a far-right Republican accolyte of Ayn Rand continued to trump his current responsibilities as chief central banker.

It's one thing to deliberately run a deficit during a recession. It's quite another to deliberately blow a huge hole in the government's revenue structure. Greenspan should surely know the difference. But like Bush, Greenspan uses the immense deficits as a rationale to keep cutting social outlays.

The deficits are now projected at $400 billion this year and at comparably destructive levels for the indefinite future. The tax cuts are responsible for more than $3 trillion in long-term revenue losses over 10 years. And Greenspan hasn't even spoken out against the president's campaign to make the cuts permanent.

Just imagine the outcry from Greenspan, Wall Street, and the Republican Party if these deficits had been the result of social spending rather than tax cuts for America's wealthiest. For half of the cost of the projected deficits -- $200 billion a year -- we could have universal, high-quality child care and health insurance for all Americans. Think of that.

But if some Democratic president had managed to persuade Congress to enact such a program, the right would be going nuts at the fiscal irresponsibility. Clearly the right's fiscal ethics are entirely situational. If deficits are caused by tax cuts for corporations and the rich, well, this is a manageable problem that can be solved by reduced social spending. But if deficits result from spending, Wall Street and the right would have us believe the economy is about to collapse.

Indeed, if the gold medal for hypocrisy goes to Greenspan, Wall Street deficit hawks get the silver medal. Remember the Concord Coalition -- that bipartisan group of worthies concerned about federal deficits? It's still there, and a few of its members are actually principled conservatives. You just don't hear as much from it when the deficits are Bush's.

Reprinted from the Boston Globe
I find this statement to be accurate, "Just imagine the outcry from Greenspan, Wall Street, and the Republican Party if these deficits had been the result of social spending rather than tax cuts for America's wealthiest".

Why is it good to run up a deficit on military spending and tax cuts, but if we want to spend on education, healthcare, or job training programs all hell breaks loose?
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Old 05-12-2004, 11:50 AM   #2
Valleycrest
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Why is it good to run up a deficit on military spending and tax cuts, but if we want to spend on education, healthcare, or job training programs all hell breaks loose?
Because most people don't directly see the benefits of money spent on social interests. Tax cuts puts money in my pocket. Defense spending increases the security of the US as well as provide a ton of jobs in my area enriching the local economy. Education? See very little; Healthcare? I pay for my own; job training programs? I have a job, and the jobs created by defense spending far outweigh any potential benefit this could provide me. These are my needs from my government, I guess I must be the voice of the people.
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Old 05-12-2004, 12:04 PM   #3
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I guess I must be the voice of the people.
I have thoughts about what you are, but I will not rise to the flame bait.

These are my needs from my government.
Yes, so you seem to be saying your personal gain strongly influences what you percieve as your needs from government.

I think people without healthcare have a need. Their gain is obvious. What is interesting is that you really have avoided the question of why it is good to run up a defecit with military spending and bad to run up a deficit on social spending?

Perhaps you are saying it is OK to run up deficits just so long as you can pocket some of that money through tax breaks and feel more secure?
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Old 05-12-2004, 01:27 PM   #4
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I'm giving you a possible explanation as to why some people think it's ok to run up the deficit on military spending as opposed to social spending. Most people take a "what's in it for me" approach. Of course, I consider social concerns not directly related to me and are concerned about them, but in the end, a stronger consideration is given to how things are directly affecting me.
$200 billion a year -- we could have universal, high-quality child care and health insurance for all Americans. Think of that.
Do not think me a monster because I don't want to consider those who can't afford health care, but a president is not going to win overwhelming support from a community suffering from economic turmoil just because he addresses issues like high-quality child care. The debacle of the national health care plan that was pushed by the Clinton administration should attest to the fact that Americans are not willing spend the money it would take to provide health care to all.

That being said, fiscal responsibility has been a cornerstone of the Republican agenda over the past 50 years or so. I think the aggressive economic recovery plan that Bush has instituted has raised a few eyebrows from those accustomed to the cut and run ideology.

Greenspan has been the Fed chair since the Reagan days. He does have to be renominated by presidents regularly which means that even a Democratic president has had faith in his incredibly complex understanding of macroeconomics. If the author of this article wants to blame Greenspan for the economic recovery plan, then he also needs to give him credit for the economic boom of the late 1990s.
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