Run! Here Comes The Deficit!

A letter from Rep. Alan Grayson:

A few days ago, I was stuck in the car for a long drive. Because of the complete absence of progressive talk from Orlando’s airwaves, I had no real choice but to listen to the nasal maundering of Mark Levin on the radio. Levin was very upset about the federal deficit.

Interestingly, Levin was a high-level appointee in the Reagan Administration. Dick Cheney, who was Reagan’s Defense Secretary and later the Vice President, said 10 years ago that “Reagan proved deficits don’t matter.”

I must concede that it is rather difficult to reconcile the conflicting statements of these two gentlemen, Messrs. Levin and Cheney. Evidently, they believe deficits are a terrible tragedy when a Democrat is President, and a wonderful gift when a Republican is President.

There has got to be a more objective standard than that.

Here’s one: the federal deficit is a problem when long-term interest rates are high, and not much of a problem when long-term interest rates are low. The Federal Reserve dictates short-term interest rates, but long-term rates still are, pretty much, set by the market, in its usual ruthless fashion. (Which is why James Carville said that after he dies, he “want[s] to come back as the bond market. You can intimidate everybody.”)

When long-term interest rates are high, a federal deficit competes against and “crowds out” private borrowing and investment. When long-term interest rates are low, the federal deficit is not taking away from borrowing by the private sector. On the contrary, the federal deficit is acting as a needed boost to aggregate demand in the economy, an action also known as “fiscal policy.” When the economy is slack, every dollar of reduction in federal spending takes three or four dollars off of our gross national product.

So, by that test, where are we? Well, as I explained last week, long-term U.S. interest rates are at their lowest in history. So what does that tell you about the deficit?

Sorry – I didn’t mention that there was going to be a quiz.

When Ronald Reagan was President, long-term interest rates sometimes exceeded 15% – ten times as high as long-term interest rates today. The market was screaming at the top of its lungs that the Reagan deficit was too high. And today? Silence.

Look around the world. The ten-year note in Greece yields a little less than 30%. Pakistan, 13%. Portugal and Venezuela, 12%. In those countries, the bond market is shouting, “Cut that out!”

Not here.

Thanks to all the deficit-mongering by Mark Levin, Rush Limbaugh, Fox “News,” etc., a lot of Americans are scared by the federal deficit. The advice from Democratic pollsters is to go along with this hand-wringing. But there is an alternative: Explain to the American people when a federal deficit is bad, and when it is not.

Like I just did.

Courage,

Alan Grayson

The Promise

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
Declaration of Independence

The Occupy movement has been accused of and labeled as many things.
We are here not as disrupters of a perfect society. We are here because our political and economic system has completely disregarded what is good for the people in the pursuit of profits for the few.

There are countless metrics to gauge the downturn of the quality of life that has been forced upon the majority of Americans for the past few decades. We have close to 50 million of our brothers and sisters living below the poverty line. Millions more are one missed paycheck away from destitution. More Americans than ever before depend on food stamps to put food on their table. Wages haven’t risen, even equal to inflation for the past 40 years, while the work that we do has produced more for our employers than any time in history. How is this right? How does this contribute in any way to life, liberty, and the pursuit of happiness for Americans?

No one has ever made himself rich through hard work alone. Though hard work is a most necessary ingredient, by itself, it has never provided wealth. Wealth (or riches) is derived from a person’s idea put into action by his/her fellow citizens. You need security, roads, communication, educated employees, and a whole host of prerequisites that are provided to you by the entire society to acquire said wealth. The lie that rich men are entirely self-made is detrimental to the social contract that every American has with his country.

It is only in the past 40 or so years that the wealth divide has expanded so prominently. Taxes on the wealthy used to be over 70%. This was during the greatest economic expansion the world had ever seen. Economic quality of life rose more in those times than any previous time in the history of the planet. We used those taxes to build roads, freeways, bridges, universities, and infrastructure that greatly benefited a vast majority of the people and industry. America became a super-power because of these policies. Now we find our country literally falling apart, and we’re completely divided over the god-awful idea to raise the highest tax rate from 35% to 39%. Why? How did we get here?

We got here by the gradual takeover of our political system by those with the most money. Plain and simple. Our government has been totally and completely hijacked by money. Can you run for national office? Can anyone you know? You better be a millionaire and have millionaire friends. You have a better chance of getting sunburned in a cave than getting elected to congress if you’re not rich. How is this healthy? How is this truly representative of the people? If we were all millionaires, then millionaires would be our true representatives. But we’re not millionaires, and they no longer represent the people that they are elected to legislate for.

It used to be that you go to school, get a job, get married, buy a house, support your family on one income, and send your kids to college. This is no longer a possibility for too many Americans. Now you take whatever work you can get, regardless of how your skills are being disregarded and under-utilized, and hope you can afford to keep the damn lights on. This is destroying America, and you all see it and know it first-hand.

Healthcare in America is available only if you can afford it. How do you have life without your health? How does a population achieve liberty or happiness without their health? Seriously. How? How are our citizens supposed to feed their families when a large part of the economy is based on service and retail work that pays minimum wage? Minimum wage that buys less than it did in the 1970’s.

So the question becomes ‘where do we go from here?’. How can we improve the lives of the American people, and in the process bring back the promise of life, liberty, and the pursuit of happiness?

I can tell you how we can’t do it. By sitting back and continuing on the same path we’ve been on. It takes action by each and every one of us. It has to be a national conversation. Some are in the position to put in more time than others. Not everybody can take to the streets. Some contribute monetarily. Others hold meetings in their homes with their neighbors. For the rest of us, it is our responsibility to educate ourselves on how the disease of money is selling our futures down the river. Knowledge is our weapon. We owe it to ourselves, our children, our communities, and our country.

Why do we Occupy? We must. When will we stop? When we get what we have been promised.

We are many. We are one. We are the 99%!

Move Along Folks…

From Bill McKibben, professor, author, life-long activist. He organized the protests and mass civil-disobedience against the Keystone XL pipeline last year outside the white house that resulted in 1,253 people going to jail…

The Chamber of Commerce spent more money on the 2010 elections than the Republican and Democratic National Committees combined, and 94% of those dollars went to climate-change deniers. That helps explain why the House voted last year to say that global warming isn’t real.

It also explains why “our” representatives vote, year in and year out, for billions of dollars worth of subsidies for fossil-fuel companies. If there was ever an industry that didn’t need subsidies, it would be this one: they make more money each year than any enterprise in the history of money

Whole thing is plainly laid out and well worth the read.