FacebookTwitterGoogle+RedditEmail

Saving the Planet or Fixing the “Debt”?

Imagine Japan attacked at Pearl Harbor in December of 1941 and our political leaders responded by debating the best way to deal with the deficits projected for 1960. This is pretty much the way that Washington works these days.

The political leadership, including the Washington press corps and punditry, were already intently ignoring the economic downturn that is wreaking havoc on the lives of tens of millions of people across the country. Now, in the wake of the destruction from Hurricane Sandy, they will intensify their efforts to ignore global warming. After all, they want the country to focus on the debt, an issue that no one other than the elites view as a problem.

The reality of course is straightforward. The large deficits of recent years are due to the economic downturn caused by the collapse of the housing bubble. If the economy were back near its pre-recession level of unemployment then the deficits would be close to 1 percent of GDP, a level that could be sustained indefinitely.

But the deficit scare mongers are not interested in numbers and economics; they want to gut key government programs, most importantly Social Security and Medicare. That is why they are pushing the fear stories about the debt and deficit. This is the rationale for the Campaign to “Fix” the Debt, a collection of 80 CEOs ostensibly focused on getting the budget in order.

What is perhaps most infuriating about this crew is the claim that their efforts are somehow designed to benefit our children and grandchildren. This is bizarre for a number of reasons. First, while they do want to cut Social Security and Medicare for current retirees and those expecting to benefit from these programs in the near future, the biggest cuts in their plans will hit today’s young.

In effect they are promising to “save” these programs for young workers by destroying them. Under most of the proposals designed to “fix” these programs Social Security will provide a sharply reduced benefit for retirees in 40-50 years compared with the currently scheduled level, and Medicare will by no means ensure most seniors access to decent health care.

However the even more bizarre aspect of their generational equity logic is the idea that somehow the well-being of future generations can be measured in any way by the size of the government debt. This point should have been pounded home to even the thickest deficit hawk by Hurricane Sandy.

What we do or don’t do in the next decade will have a huge impact on the climate conditions that our children and grandchildren experience. Imagine that we listen to our Campaign to Fix the Debt friends and find a way to pay down the debt while neglecting any steps to curb global warming.

We’ll be able to tell our children and grandchildren that they don’t have to pay interest on government bonds (they also won’t be receiving interest on government bonds, but let’s not complicate matters with logic) as they evacuate their homes ahead of flood waters. Undoubtedly they will be very thankful for this great benefit that we will have bestowed on them courtesy of the public-minded CEOs of the Campaign to Fix the Debt.

In reality the Campaigners are spewing utter nonsense when they imply that the well-being of future generations will be in any way determined by the size of the government debt that we pass on to them. We hand down to future generations a whole society and a planet that will be damaged to varying degrees depending on our current actions. Neglecting the steps necessary to fix the planet out of a desire to reduce the deficit is incredibly irresponsible if we care about future generations.

Of course global warming is far from the only non-budgetary cost that we are imposing on future generations. When we fill our jails with young people, many of whom will spend much of their lives in the criminal justice system, we are imposing large costs on future generations. We just are not honest enough to enter them in the budget books. The same is true of when we make enemies internationally with aggressive military actions that could lead to enduring hostility.

There also are even simpler cases of dishonest accounting. If the government imposed a $250 billion annual tax on prescription drugs (roughly $3 trillion over the 10-year budgetary horizon), everyone would understand this as a large burden on consumers. However, when the government grants patent monopolies on prescription drugs that allow drug companies to charge $250 billion more than the free market price, no one enters this additional cost on the ledgers.

The Campaign to Fix the Debt types like to pretend such costs don’t exist. They just want us to shut up and gut Social Security and Medicare, but the public is not likely to be stupid as they want us to be.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

This article originally appeared on The Guardian.

 

More articles by:

Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC. 

Weekend Edition
December 14, 2018
Friday - Sunday
Andrew Levine
A Tale of Two Cities
Peter Linebaugh
The Significance of The Common Wind
Bruce E. Levine
The Ketamine Chorus: NYT Trumpets New Anti-Suicide Drug
Jeffrey St. Clair
Roaming Charges: Fathers and Sons, Bushes and Bin Ladens
Kathy Deacon
Coffee, Social Stratification and the Retail Sector in a Small Maritime Village
Nick Pemberton
Praise For America’s Second Leading Intellectual
Robert Hunziker
The Yellow Vest Insurgency – What’s Next?
Patrick Cockburn
The Yemeni Dead: Six Times Higher Than Previously Reported
Nick Alexandrov
George H. W. Bush: Another Eulogy
Brian Cloughley
Principles and Morality Versus Cash and Profit? No Contest
Michael F. Duggan
Climate Change and the Limits of Reason
Victor Grossman
Sighs of Relief in Germany
Ron Jacobs
A Propagandist of Privatization
Robert Fantina
What Does Beto Have Against the Palestinians?
Richard Falk – Daniel Falcone
Sartre, Said, Chomsky and the Meaning of the Public Intellectual
Andrew Glikson
Crimes Against the Earth
Robert Fisk
The Parasitic Relationship Between Power and the American Media
Stephen Cooper
When Will Journalism Grapple With the Ethics of Interviewing Mentally Ill Arrestees?
Jill Richardson
A War on Science, Morals and Law
Ron Jacobs
A Propagandist of Privatization
Evaggelos Vallianatos
It’s Not Easy Being Greek
Nomi Prins 
The Inequality Gap on a Planet Growing More Extreme
John W. Whitehead
Know Your Rights or You Will Lose Them
David Swanson
The Abolition of War Requires New Thoughts, Words, and Actions
J.P. Linstroth
Primates Are Us
Bill Willers
The War Against Cash
Jonah Raskin
Doris Lessing: What’s There to Celebrate?
Ralph Nader
Are the New Congressional Progressives Real? Use These Yardsticks to Find Out
Binoy Kampmark
William Blum: Anti-Imperial Advocate
Medea Benjamin – Alice Slater
Green New Deal Advocates Should Address Militarism
John Feffer
Review: Season 2 of Trump Presidency
Rich Whitney
General Motors’ Factories Should Not Be Closed. They Should Be Turned Over to the Workers
Christopher Brauchli
Deported for Christmas
Kerri Kennedy
This Holiday Season, I’m Standing With Migrants
Mel Gurtov
Weaponizing Humanitarian Aid
Thomas Knapp
Lame Duck Shutdown Theater Time: Pride Goeth Before a Wall?
George Wuerthner
The Thrill Bike Threat to the Elkhorn Mountains
Nyla Ali Khan
A Woman’s Selfhood and Her Ability to Act in the Public Domain: Resilience of Nadia Murad
Kollibri terre Sonnenblume
On the Killing of an Ash Tree
Graham Peebles
Britain’s Homeless Crisis
Louis Proyect
America: a Breeding Ground for Maladjustment
Steve Carlson
A Hell of a Time
Dan Corjescu
America and The Last Ship
Jeffrey St. Clair
Booked Up: the 25 Best Books of 2018
David Yearsley
Bikini by Rita, Voice by Anita
FacebookTwitterGoogle+RedditEmail