Another Shutdown? Top Economist Destroys The GOP’s Deficit Lies In Just 3 Minutes (VIDEO)
Robert Reich debunks the GOP deficit hawks as they hold our government hostage and demand more budget cuts.
Uh-oh. It’s government shutdown season again. Once again, the GOP’s ready to hold our government hostage and shut it down if they don’t get the draconian budget cuts they want. Because way back in the Reagan times, Republicans swore they’d make the government so small they could drown it like a baby in the bathtub, and they meant it.
They don’t care that their tinkle-down supply side economics and budget-slashing policies are destroying our country and are proven not to work. The GOP’s got no new ideas and is impervious to facts anyway, so they’re doubling down. And it’s hard to argue with them because economics is so complicated and all, plus it involves math. Luckily for us, top economist Robert Reich debunks the GOP deficit hawks effortlessly, and in only three minutes. And he does it in clear, simple language that we all can understand.
If you’ve always known in your gut that slashing our budget so we can pay off some ever-looming federal deficit monster isn’t working for us, but you can’t explain why, Robert Reich’s video makes it all crystal clear. And in case you can’t watch the video, here are the three main points made by the U.C. Berkeley economics professor and former labor secretary for President Bill Clinton.
Three reasons why right-wingers are wrong about the deficit:
1. Deficits only matter as a percent of our overall economy.
Deficits are NOT always bad. In fact, the U.S. government’s debt often seems higher than it actually is due to recurring payments like your rent or your mortgage. If the economy is productive enough, the payments are just a drop in the bucket. As Reich explains:
“That ratio is critical. As long as the yearly deficit continues to drop as a percent of the national economy, as it’s been doing for several years now, we can more easily pay what we owe.”
2. In tough times, deficit spending grows the economy.
When we’re in a recession or have high numbers of unemployed and underemployed people, we need to increase spending to grow the economy. Government spending has what’s called a “ripple effect” that spreads outwards and grows the economy.
As we’ve known for years – in every economic downturn and in every struggling recovery – more government spending helps create jobs – teachers, fire fighters, police officers, social workers, people to rebuild roads and bridges and parks. And the people in these jobs create far more jobs when they spend their paychecks.
Furthermore, as Robert Reich debunks the GOP deficit hawks, he explains that austerity measures during recessions just makes the economy worse and recoveries slower and more painful…As we’ve seen happen in Greece.
Doing the opposite – cutting back spending when a lot of people are still out of work – as Congress has done with the sequester, as much of Europe has done – causes economies to slow or even shrink, which makes the deficit larger in proportion.
3. There’s “good” debt and “bad” debt.
Deficit spending on investments is different. Just as individuals and families go into debt to get college degrees, buy homes and start businesses, governments can go into debt to invest in a nation’s future growth and productivity.
Deficit spending on investments like education and infrastructure is different than other forms of spending, because this spending builds productivity and future economic growth. It’s like a family borrowing money to send a kid to college or start a business. If the likely return on the investment exceeds the borrowing costs, it should be done.
In other words, some deficit spending is a no-brainer.
Watch Robert Reich debunk the GOP’s deficit lies in just three minutes:
Photo: Video screen grab/Robert Reich.
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