"We don't have a budget crisis. We have a jobs and growth crisis."

[vonarrow]

http://www.progressivepeoplepower.com/index.php?itemid=6

http://www.ProgressivePeoplePower.Com
Reich: "We don't have a budget crisis. We have a jobs and growth crisis. Standard & Poor's has warned it will downgrade the nation's debt from a triple-A to a double-A rating if we don't tend to the long-term deficit. But, as I've noted, S&P has no business meddling in American politics - especially since its own non-feasance was partly responsible for the current size of the federal debt (had it done its job the debt and housing bubbles wouldn't have precipitated the terrible recession, and the federal outlays it required)."
By: Admin
Subject: The cost of having a stupid American public....Reich: "We don't have a budget crisis. We have a jobs and growth crisis."



Don't Fall for the GOP Lie

"We don't have a budget crisis. We have a jobs and growth crisis."
By Robert Reich, Robert Reich's Blog - 29 July, 2011

Don't fall for the GOP lie: There is no budget crisis. There's a
job and growth crisis.

A friend who's been watching the absurd machinations in Congress asked me
"what happens if we don't solve the budget crisis and we run out of
money to pay the nation's bills?"

It was only then I realized how effective Republicans lies have been.
That we're calling it a "budget crisis" and worrying that if we don't
"solve" it we can't pay our nation's bills is testament to how
successful Republicans have been distorting the truth.

The federal budget deficit has no economic relationship to the debt limit. Republicans have linked the two,
and the Administration has played along, but they are entirely separate.

Republicans are using what would otherwise be a routine, legally technical vote to raise
the debt limit as a means of holding the nation hostage to their own political goal
of shrinking the size of the federal... ... government.

In economic terms, we will not "run out of money" next week. We're still
the richest nation in the world, and the Federal Reserve has unlimited
capacity to print money.

Nor is there any economic imperative to reach an agreement on how to fix
the budget deficit by Tuesday. It's not even clear the federal budget
needs that much fixing anyway.

Yes, the ratio of the national debt to the total economy is high
relative to what it's been. But it's not nearly as high as it was after
World War II - when it reached 120 percent of the economy's total output.

If and when the economy begins to grow faster - if more Americans get
jobs, and we move toward a full recovery - the debt/GDP ratio will fall,
as it did in the 1950s, and as it does in every solid recovery. Revenues
will pour into the Treasury, and much of the current "budget crisis"
will be evaporate.

Get it? We're really in a "jobs and growth" crisis - not a budget crisis.

And the best way to get jobs and growth back is for the federal
government to spend more right now, not less - for example, by exempting
the first $20,000 of income from payroll taxes this year and next,
recreating a WPA and Civilian Conservation Corps, creating an
infrastructure bank, providing tax incentives for small businesses to
hire, expanding the Earned Income Tax Credit, and so on.

But what happens next week if Congress can't or won't deliver the
President a bill to raise the debt ceiling? Remember: This is all
politics, mixed in with legal technicalities. Economics has nothing to
do with it.

One possibility, therefore, is for the Treasury to keep paying the
nation's bills regardless. It would continue to issue Treasury bills,
which are our nation's IOUs. When those IOUs are cashed at the Federal
Reserve Board, the Fed would do what it has always done: Honor them.

How long could this go on without the debt ceiling being lifted? That's
a legal question. Republicans in Congress could mount a legal challenge,
but no court in its right mind would stop the Fed from honoring the full
faith and credit of the United States.

The wild card is what the three big credit-rating agencies will do. As
long as the Fed keeps honoring the nation's IOUs, America's credit
should be deemed sound. We're not Greece or Portugal, after all. We'll
still be the richest nation in the world, whose currency is the basis
for most business transactions in the world.

Standard & Poor's has warned it will downgrade the nation's debt from a
triple-A to a double-A rating if we don't tend to the long-term deficit.
But, as I've noted, S&P has no business meddling in American politics -
especially since its own non-feasance was partly responsible for the
current size of the federal debt (had it done its job the debt and
housing bubbles wouldn't have precipitated the terrible recession, and
the federal outlays it required).

As long as we pay our debts on time, our global creditors should be
satisfied. And if they're satisfied, S&P, Moody's, and Fitch should be, too.

Repeat after me: The federal deficit is not the nation's biggest
problem. The anemic recovery, huge unemployment, falling wages, and
declining home prices are bigger problems. We don't have a budget
crisis. We have a jobs and growth crisis.

The GOP has manufactured a budget crisis out of the Republicans'
extortionate demands over raising the debt limit. They have succeeded in
hoodwinking the public, including my friend.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
20110730-reich_portrait.jpg
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His "Marketplace" commentaries can be found on publicradio.com and iTunes.

http://www.readersupportednews.org/opinion2/277-75/6813-dont-fall-for-the-gop-lie

[FirstLight]

1. You are only supposed to post 3 paragraphs...

FYI...DU rules i think...

i still plan on reading the whole thing

[hay rick]

6. 4 paragraphs.

Rules here: http://www.democraticunderground.com/forums/rules.html

Rule 5:
Copyrights: Do not copy-and-paste entire articles onto this discussion forum. When referencing copyrighted work, post a short excerpt (not exceeding 4 paragraphs) with a link back to the original.

[Beartracks]

2. True - jobhunts aren't taking forever because...

... businesses are worried about the national deficit or credit rating. For the most part, they are reluctant to hire until business picks up, i.e. until consumers start spending again. The ironic part is that until more people have jobs or have less concern about being laid off, consumers aren't real big on spending money. Catch-22.

But I don't think my job-seeking friends have ever heard, "Sorry, we're not hiring right now because, you know, the Federal deficit is just so big" or "Gee, Congress hasn't come up with a budget, so just hang tight and apply again in a year."

==============================

[jwhitesj]

3. You're right

We dont' have a cash problem in this country, we have a demand problem. People don't want to spend because they are afraid of loosing their jobs or they don't have a job and can't buy things. The private sector needs spenders, but the teabaggers and republicans in congress want to cut out the most stable form of spenders, the government employee. We reduced discretionary spending by $100 billion in the last 2 years, cut 1.4 million government jobs, and conservatives are pointing fingers at deomcratic policies asking, "where is the recovery?" The powerful ones, like the Koch brothers and the higher ups in Washington know this, and are hellbent on destroying America for their personal gain.

[Beartracks]

4. Republicans hate govt. So why do they keep applying for the job?

Oh, yeah: so they can screw it up, and then say, "See? Govt can't do anything right."

======================

[chill_wind]

5. I like Robert Reich a lot, but I don't agree for a single second

that Obama was, or is being "hoodwinked." Even though polls showed jobs/unemployment,failing wages, foreclosures and failing home prices were what people cared about-- "the economy"-- and all of that trumped the federal deficit, he is the one who picked his own priorities and set his agenda. He had plenty of people telling him from the beginning - focus on jobs, not deficits. He's the one who decided to elevate the issue for almost a year of his presidency by forming a deficit commission, making it of such huge(Republican and media obsessed) national importance. He fed it as a priority, and I have to assume he believed it was.


http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=103&topic_id=569372

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=103&topic_id=569194


Repeat after me: The federal deficit is not the nation's biggest
problem. The anemic recovery, huge unemployment, falling wages, and
declining home prices are bigger problems. We don't have a budget
crisis. We have a jobs and growth crisis.

The GOP has manufactured a budget crisis out of the Republicans'
extortionate demands over raising the debt limit. They have succeeded in
hoodwinking the public, including my friend.