February 21, 2023

Some truth about the national debt

Robert Reich -  The national debt is expected to rise as a percent of the total U.S. economy largely for three reasons:

(1) The Federal Reserve is busily slowing the economy and causing interest rates to rise. As a result, the debt will become larger as a share of the total economy. And a larger portion of the total debt will be paid out in interest. Most of these interest payments will go to wealthy Americans who have lent the U.S. government money (both directly in the form of Treasury bills they’ve purchased and indirectly in all the Treasury bills bought by the funds in which they’ve invested).

(2) The giant baby-boom generation will soon collect Social Security and Medicare (or has already started to). But boomers (and post-boomers) rely on Social Security and Medicare. They’ve paid into it through their working lives....

(3) Republicans have slashed taxes on the wealthy, resulting in less federal revenue. Ronald Reagan, George W. Bush, and Donald Trump all reduced taxes on the wealthy (and the corporations on whose stock they collect capital gains). Note that these are many of the same people now collecting interest payments on their loans to the U.S. government.

So if you’re worried about the federal debt, one of the first things you should do is repeal these tax cuts and restore taxes on the wealthy — who, not incidentally, are now taking home a record share of the economy’s gains.

Yet Republicans want to extend Trump’s tax cuts, at the cost of another $3 trillion. And they want to repeal funding of the Internal Revenue Service, whose extra funding is expressly for the purpose of auditing wealthy taxpayers. This will cost billions more, because wealthy taxpayers won’t pay all the taxes they owe.

1 comment:

Anonymous said...

As usual, Robert Reich has hit the nail on the head and hammered home the real truth about these vital issues and calls out the distorted propaganda being fed to our unsuspecting citizens.

Semper Paratus