“There’s no question about it: the corporate conservatives and their allies in the political and religious right are achieving a vast transformation of American life that only they understand because they are its advocates, its architects and its beneficiaries, in creating the greatest economic inequality in the advanced world, they have saddled our nation, our states and our cities and counties with structural deficits that will last until our children’s children are ready for retirement and they are systematically stripping government of all its functions except rewarding the rich and waging war.”
I am certain Mr. Moyers is a fine human being, but these gross exaggerations are not only inaccurate but serve to inflame and diminish the possibility of honest dialogue between the parties who must work together to solve the systemic problems of this nation. Please, regardless of your political affiliation, hear me out to the end of this short piece.
Some simple facts.
- Cities, counties and states are statutorily prohibited from operating budgets containing deficits. Every budget, every year must be balanced.
- Nearly 70%3 of the annual federal spending goes to the administration and delivery of wealth transfer programs like Social Security, Medicare, Medicaid, and so-called welfare programs including cash assistance, healthcare and medical provisions, food assistance, housing subsidies, energy and utilities subsidies, education and childcare assistance, and subsidies and assistance for other basic services administered either at the federal or state and local level.
- That means 70% of deficit spending goes toward these expenditures. Actually, these expenditures represent much more of the deficit if you remove defense spending, the Supreme Court and law enforcement, as well as the cost of the legislative & executive branch, all constitutionally mandated functions of the federal government.
- More federal debt, approximately 9 trillion, was accumulated during the Obama administration than the deficits accumulated by any previous administrations by trillions.1
- The current total federal debt is approximately 20 trillion which exceeds the entire U.S. annual GDP (hopefully that scares the pants off you). The current federal spending is approximately 4.5 trillion on revenues of 3.4 trillion.2
- In round figures the top 1% most wealthy have an average net worth of approximately 10 million dollars. If the top 1% of the population is approximately 3.3 million people then their total approximate wealth is 33 trillion.
- If you taxed the top 1% with a 10% wealth tax (well, first of all, you would unequivocally collapse the economy in an apocalyptic fashion, but for argument sake let’s say a socialistic president and legislature took power and enacted such a wealth tax) that’s 3.3 trillion per year in additional tax revenue. If not a single additional dollar in federal spending were enacted, not “free” healthcare, “free” college”, the green new deal, none of it, it would be nearly a decade for the total federal debt to be paid back with federal spending frozen at the current level.
So lets face facts, none of that is going to happen. Collapsing the economy in that way serves no one. Given this reality, what can be done to address social justice issues like income disparity, the cost of education, the cost of healthcare and other topics like climate change? Two primary realities must be addressed. How do we raise taxes enough on the ultra-wealthy to reduce deficit spending to a manageable level and squeeze out enough after that to begin to reasonably fund programs to address the social injustice issues without driving the economy into recession? Of course, the trend line in deficit spending and the cost of social programs like Social Security and Medicare must be bent by affecting benefits for future generations. Because even a reasonable tax on the ultra-wealthy will not prevent insolvency for those programs.
That’s it. Anything more radical than that, like re-raising taxes on businesses, would only serve to reduce GDP that will reduce tax revenues and reduce the federal government’s ability to spend more to make things better for those seen as being treated unjustly. It has to be a reasonable plan that will probably take five to ten years to have a significant, measurable impact and not drive us into a low growth, high tax, perpetual state of misery, Euro-style economy where nothing material is accomplished. Just ask the French how it’s going.
And there are those, economist and politician alike, whose incredulity would rupture the Richter scale, that this nation is basically at full employment with GDP in excess of 3% and still producing annual trillion-dollar deficits in federal spending. Some aghast that federal tax revenues approximating 3.5 trillion is not enough to serve the needs of this nation. Others will zero in on this as further evidence that supply-side economics are fantasy. Regardless where you sit on that full spectrum, we are spending a TRILLION DOLLARS MORE EACH YEAR than we collect. If we call it a 30% spending deficit then across the board 30% tax increases will only stop the current bleeding of red ink and offer nothing new in help. The enormity of the problem cannot be overstated.
So Mr. Moyers, can we please set aside the inuendo, the vague fact-free attacks and help us ease into a dialogue that can really start to help people who need it with a reasonable plan that has a real chance to succeed in the long term? If we are going to have any sliver of hope for success, we must demand all the attack dogs (left and right) be silenced, or, minimally ignored, and allow reasonable men and women from both sides to begin material discussions about what is fiscally feasible in addressing the social justice issues before us. Nothing meaningful can be accomplished in one year or maybe even one term but certainly in the next decade we can do what Americans have always done……find a way.
3Chart below – Obama Administration proposed total 2015 spending – Source OMB – https://www.bing.com/images/search?view=detailV2&id=44AF99C5E38441EFE27FD6AE5F7D9BD05CB326AD&thid=OIP.wUuh6e0eYXD0apQoLdNkAgHaFf&mediaurl=http%3A%2F%2Fbluedasher.co%2Fwp-content%2Fuploads%2F2018%2F09%2Fgovernment-spending-pie-chart-2018-federal.jpg&exph=480&expw=648&q=Federal+Spending+Chart+2018&selectedindex=15&ajaxhist=0&vt=0&eim=1,2,6