By Frances Causey
Journalists have long loathed to write about and report on economics, dismissing the entire field as too hard to understand or impossible to reduce to a quote or a sound bite. Because of this, working Americans are paying the price as the parameters of the current debate around the deficit, budget and the so-called fiscal cliff are being defined by the likes of Goldman Sachs CEO Lloyd Blankfein and Peter G. Peterson, two men who are heavily invested in the outcome around the subject. With important programs like Social Security and Medicare on the line, there can be little doubt that working people are not represented in Washington.
Reading mainstream media headlines and watching cable news is really bad for your bottom line because those stories are for the most part based on content churned out by the huge public relations machines funded by Peterson and Blankfeins’ Goldman Sachs. This ideologically driven (we only want government when it enriches us) information is neither comprehended nor analyzed by the journalists or news outlets that send them out like retreads on a worn tire. In other words, if a lie is repeated enough it becomes the truth.
This writer encourages readers to look not to the mainstream media, but to the work of academics like economist Dean Baker from the Center for Economic Policy and Research. In today’s maelstrom of corporate owned news, we must turn directly to the source of good, non-partisan information. Dean Baker’s “think tank” is actually “reporting” and researching the facts behind our economic crisis unlike Peterson’s money fueled organization, which spews its founder’s personal beliefs and then manipulates the data to support them, all of which lead to the “creation” of the fiscal cliff to begin with. Please stop and question everything you see and read about the deficit because chances are it’s loaded with billionaires self-interested political and financial goals.
As Dean Baker, who predicted our crisis many years ago, points out, our deficit was both relatively modest until the economy collapsed in 2008. And as neither Republicans nor Democrats would like to admit our deficit is not “attributed to “extravagant social spending”. Baker writes with authority that this is “straightforward and not debatable.”
Baker’s research also shows that our current deficit, which is 10 percent of GDP, was created when the housing bubble induced the economic collapse, which then lead to a sort of perfect storm or a “plunge” in tax collections, coupled with an increase on spending for food stamps and unemployment insurance. So now you have the simple, unvarnished truth about the roots of our economic collapse. Is it really that hard to understand? But seriously, we encourage all citizens concerned about their own “economy” to discover the facts for themselves. We did at Heist and came up with our own solutions to “fix the debt”.
• The Payroll Tax Holiday will expire at the end of the year and go from 4% back to 6%. Solution: keep the tax at 4% and raise the cap on people who are making more than $108,000/year. Do this and Social Security will remain solvent for the next 75 years.
• Turn Medicare into Medicare for all. The U.S. would spend a similar % of GDP for medical care that all advanced industrial countries do, and save hundreds of billions of dollars a year.
• The Pentagon spends one third of federal revenue and generates debt for which we pay interest. Reduce the Pentagon’s budget by 40-50% as the fiascos in Iraq and Afghanistan have already cost us between 3 and 5 trillions dollars.
• Continue unemployment insurance for people who can’t find a job. Overwhelmingly, the economy needs the spending generated by unemployment checks.
• Create a WPA for green jobs and green infrastructure instead of just handing money over to the private sector without any demand on return such as with business tax credits which, if extended, will cost the U.S. Treasury 890 Billion dollars between 2013 and 2022. With the WPA, the federal government would hire people who would then pay taxes!
• Demand that the new Congress negotiate with Big Pharma new reimbursement rates for Medicare patients in line with the way the Veteran’s Administration does. Drug companies will be paid $400 billion in the next 10 years unless this changes.
• Get rid of Medicare Advantage Programs that siphon public Medicare money into private insurance companies with no improvement of care. This cost the Medicare Program 30 billion dollars in 2006, and that money could have gone directly into Medicare services.
• Get rid of the Bush Tax Cuts- Raise rates on individual income tax for the 1%, capital gains and dividend income.
• Hands off Social Security and Medicare, as these programs are self-funded through payroll taxes, paid by employees and their employers. Social Security currently has a 2.7 trillion dollar surplus. By law, it cannot be allowed to be in deficit. Medicare is partly funded through payroll taxes. A majority of the spending on Medicaid, which is funded by the Federal government and the states, goes to the elderly and disabled.
For more information about Heist: Who Stole the American Dream? go to www.heist-themovie.com
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Photo by Financial Times on Wikimedia Commons.