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| Wipe our Debt (Photo credit: Images_of_Money) |
What could be more urgent than deficit reduction? you may ask.
My answer: Almost everything.
If deficit reduction was ever urgent, it no longer is. We’ve already accomplished most of the deficit-reduction required in this decade, nearly enough to stabilize our debt, but at a great cost to current economic growth. We’ve sacrificed with high unemployment, tepid growth and underinvestment in public goods.
Not to mention our inability to get anything else done while we bicker about deficits.
The $16 trillion debt sounds like a terrible thing, but no one has been able to show how this high level of debt has had any negative impact on the economy or on the people so far. Has anyone come around looking for your share of it?
Interest rates are very low, so the public debt isn’t crowding out private investment. The burden from interest payments is extremely low, less than half what it was when Ronald Reagan was exploding the federal budget back in the 1980s. We survived.
The high debt isn’t causing slow growth; exactly the opposite. The high debt is the consequence of the depression, which decimated revenue at the same time that it opened the gates for more spending on relief and recovery.
Yes, the debt is terrible, but we have other problems that are even more terrible. We must keep in mind that our debt is a financial problem, one that can be remedied essentially with the stroke of a pen.
Our other problems, by contrast, won’t go away easily. Our other problems have a real impact on people’s lives, right now, and will have a real impact on our kids’ lives unless we resolve them.
Here are five problems bigger than the national debt:
MarketWatch Unemployment remains unacceptably high even after years of recovery. Counting those who are actively looking as well as those who aren’t looking but who want to work, there are nearly 19 million Americans who’d like a job, please.
If the 19 million people who can’t find a job were organized or had billions of dollars to spend on hiring Washington lobbyists, there’d no question that unemployment would be universally acknowledged as our most immediate pressing concern.
Think for a moment what 19 million people could accomplish: They could help build businesses and their communities. They could provide for their families, and they could invest for their future. The money they’d earn and invest would circulate in the economy, making others more prosperous.
Unemployment shatters lives and the nation. The longer unemployment lasts, the more likely it is that permanent damage will result. People or machines that are left idle get rusty. And, unlike machines, people who are left idle suffer from the humiliation and despair of knowing that their society doesn’t value them.
Think for a moment what we could have done if we’d put just one-tenth of the effort into fighting unemployment that we did fighting about budgets.
Read: Three things Washington could do to create more jobs.
Climate change
Reuters Climate change is already costing us hundreds of billions of dollars a year. Last fall, Hurricane Sandy caused an estimated $45 billion in damages, including the devastation much of the Ocean Breeze neighborhood in Staten Island.
Like the public debt, climate change seems to be a problem for the future, when some really scary things might happen. But climate change is already happening. From intense droughts to killer storms, climate change is here. Climate change is already costing us hundreds of billions of dollars a year. Read more about the rising cost of doing nothing on climate change.
Unlike the public debt where there is no scientific consensus about the consequences of maintaining a high debt level, everyone is pretty much in agreement that global warming will profoundly change our climate, our economy and our lifestyle.
It’s possible the survival of many species — including our own — depends on what we do to stop spewing greenhouse gases into the atmosphere. Even if we act now, a substantial amount of global warming has already been baked into the cake.
Many of the things we should do to slow global warming are also in our economic interests. We ought to develop alternative energy sources that do not harm the planet, not just because our survival depends upon it but because it would bequeath a more stable, peaceful and healthy world to our children.
We could fix the public debt with a stroke of a pen to amend laws made by men. By contrast, climate change is governed by the laws of physics.
Read: Despite Sandy, talk of climate change is stifled
Infrastructure
Reuters America’s vital infrastructure is crumbling. In August 2007, the I-35W bridge over the Mississippi River in Minneapolis suddenly collapsed, killing 13 and injuring 145.
Our ability to compete in the 21st century is compromised by our antiquated infrastructure. Instead of investing in the systems and networks we need, we’re letting them fall apart.
The latest report from the American Society of Civil Engineers claims that inadequate investment in transportation, drinking water, sanitation and energy networks will cost the economy more than $3 trillion in lost output between now and 2020. The cost to the average household will be $28,300. More than 3 million jobs will be lost. Read the engineers’ study on the cost of failing to act.
There’s no better time to invest in the right projects. Right now, the government can borrow at negative real interest rates, and construction costs are low because of high unemployment in the sector. What’s more, devices such as a national infrastructure bank could attract more private capital to such investments.
Everyone knows that some infrastructure projects are just pork-barrel boondoggles, like the bridge to nowhere. But everyone also knows that our economy could not function without crucial investments made in the past to our roads, railroads, airports, canals, schools and water and sewer systems. Picking the right investments isn’t easy, but it’s not impossible either.
And yes, I’m well aware that civil engineers have a vested interest in boosting infrastructure spending. Just as CEOs and Wall Street titans have a vested interest in neutering Medicare and privatizing Social Security.
Read: Investments in the future have dried up.
Inequality
MarketWatch Between 1979 and 2007, the average incomes of the richest 1% of Americans increased by 277%. The average incomes of the 80% who make up the middle class rose by just 38%.
Our economic problems didn’t start with the 2008 financial crisis and the ensuing depression. For 30 years or more, our country has been becoming more and more unequal. The rich are getting richer and the middle class is falling behind.
We’ve become a winner-take-all society, in which a few get most of the rewards. Between 1979 and 2007, the share of national income going to the top 1% of earners more than doubled, while the share of income earned by the bottom 80% declined. Even the upper-middle class barely held its own. Read the CBO’s analysis on income inequality.
It’s not because of lack of effort. The working classes have been working harder, longer and smarter than ever before, but their compensation has barely grown. Their real hourly wage grew just 0.5% per year while productivity grew three times as fast. Read more about workers’ stagnant wages.
Not only are outcomes more unequal but opportunity is also becoming more unequal. Income and class mobility are shrinking. Middle-class families are finding it more difficult to invest in their children’s future. Higher education is available, but only at the cost of a lifetime of indebtedness. Read Joseph Stiglitz on the costs of inequality
Read:Workers need more income, more power.
Democracy
Reuters These lucky voters in Washington were able to cast their ballots in November 2012. Many others around the country couldn’t vote because of long lines or reduced voting hours.
If you want to know why we’re obsessed with deficits instead of real problems that actually matter to the people, consider the sorry state of our political system.
After more than 200 years of progress — of increased participation in our democratic system, of giving a voice to the voiceless — we’re now moving in the wrong direction.
Money has always controlled our elections and our government, but as the years passed, reformers found ways to lessen the influence of money. They expanded the right to vote so that it wasn’t limited to white men with property. They amended the Constitution to allow the direct election of senators, and they abolished poll taxes and literacy tests. They passed campaign finance laws to prevent corporations from buying elections. They forced Congress to impose minimal ethics rules on itself.
All those achievements are being threatened. We’re replacing a republic based on majority rule with the despotism of a powerful minority.
Voting rights are under attack in many states, as partisan government officials actively discourage or prevent millions of people from voting.
Both houses of Congress are effectively controlled by a small minority. Because of the filibuster, senators representing as little as 10.5% of the population can block any bill forever. In House, because of the Hastert Rule requiring that any bill must have support of a majority of Republicans to be considered, lawmakers representing just 27% of the population can block action.
Lobbyists continue to write the laws, and to control the regulatory agencies that are supposed to ensure that corporations abide by the law. And the corruption and influence-peddling is much, much worse at the state and local levels of government.
With the Citizens United decision, the Supreme Court has ruled that corporate money should trump the will of the majority in elections. And, in between elections, corporate interests are able to shape the debate in obvious and in subtle ways. The media and the politicians know who’s paying the bills.
Read: The biggest failure of Obama’s presidency.
Conclusion
MarketWatch After a several deficit reduction deals in Washington, the public debt is now on course to fall as a percentage of gross domestic product. If Congress can agree on a little few more cuts and a little more revenue, the debt would stabilize as a share of GDP. That’s the goal.
You get the point. I could go on to talk about the cost of health-care, or the failure of our education system, or our lack of global competitiveness, or the perpetual war, or the violence in our homes and on our streets, or the realities of racial and sexual discrimination. And so on.
We’ve got 99 problems, but debt ain’t one.
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