In the tax-phobic United States, the Congressional Budget Office estimates the debt-to-GDP ratio, currently at 62 per cent, will rise to 87 per cent by 2020. Five years later, it will stand at 109 per cent. And by 2035 it will be 185 per cent.
Are these estimates actually any good? If so, they are rather frightening, are they not?
At the Left Business Observer, Doug Henwood did his own calculations and said that the budget deficit would hit 100% of GDP in 70 years, not 15 years. I believe he said that the CBO was using cooked numbers.
If the estimates are fact, then we will indeed be facing a debt crisis in 15 years. Not in 10 years. In 15 years.
But at the same time, if those estimates are true, it shows what complete, total and utter shit both political parties, the Republicans and Democrats, and the vast majority of Americans actually are. That’s right. Americans are shit. You heard me right. I’ve felt this way for 30 years now, and I feel more and more this way all the time.
The reason I say this is because Americans and their politicians are insane scum. Why? Because if we are facing a budget crisis, then we need austerity. This is what 100% of sane countries have gone in a deficit crisis in terms of austerity:
1. Cut spending
2. Raise taxes.
The response of American insane scum to our deficit is to cut taxes! All through the Reagan Administration, it was cut, cut, cut, cut taxes. Clinton came in, and every month there was a new tax cut or credit for this or that. The tax cut madness went truly insane during the Bush Administration, and Obama has kept it up. It seems like every other day, Obama is calling for some new tax cut or tax credit. The shit media practically had multiple orgasms every time they heard happened.
But I kept wondering when it was all going to come due. After all, all this looney tax cuts and tax credits do is starve the state of funds. As a Big Government socialist, of course I think starving the state is a terrible idea. Sooner or later, you will have to cut programs to deal with the shortfall, or barring that, you will end up with a terrible deficit crisis.
So here we are, with the possibility of a terrible budget crisis. The spending cuts are on the table. New ones seem to come down the pike every damn day. I don’t like it, but at least it’s sane if you’re doing the austerity thing.
On the other hand, instead of raising taxes as we must under an austerity regime, the psychotic tax cutting and tax credits have continued or even accelerated. That’s going to wipe out all of your spending cuts, and the deficit crisis will either stay the same or worsen. It’s psychotic behavior; it makes no sense at all. I’m not aware of a single other nation that has been stupid enough to do this.
The truth is that the tax cutting is actually based on an insane ideology. The ideology is supply side economics. This junk economics school, which has captured the entire media, both parties and the overwhelming majority of US economists for 30 years now, says this:
Tax cuts do not starve the state. On the contrary, the more you cut taxes, the more the economy goes, so the more state revenues rise. The more you cut taxes, the better funded the state is.
This appears counterintuitive to anyone with a working brain, but it’s has enough “common sense” logic to fool tens of millions of American morons. We now have 30 years of evidence that supply side economics have failed. The massive Bush tax cuts have not created one single job. On the contrary, they resulted in the loss of 9 million jobs!
Believing in supply side economics is as rational as believing that the CIA has planted electrodes in your brain and Martians are monitoring your every movement. We properly call folks who believe in such things psychotic and we try to give them medication to treat their mental illness.
But what do you do when an entire news media, 90% of economists, both political parties and tens of millions of Americans are as insane as the raving homeless guy on the street with headphones on?