The American Prospect article Fix the Debt, Destroy the Recovery by Robert Kuttner is another cry for economic sanity.
The Fix the Debt campaign, much like the Bowles-Simpson Commission and the propaganda of the Peterson Foundation generally, contends that the projected national debt is depressing business willingness to invest now. Presumably, businesses are worried about inflation and uncertainty. But the government can fund ten-year bonds at less than 2 percent interest and thirty-year bonds at less than 3 percent. So investors don’t seem worried about inflation. It’s not lack of confidence in deficit reduction that’s depressing business investment but lack of confidence in consumer purchasing power. [ssg note: no freaking customers]
If anything, the economy needs more public spending to get us out of a deep slump brought to you by the very people behind this campaign. Cutting the deficit prematurely will only depress purchasing power and deepen the slump. That’s the real lesson of Greece, Spain, Portugal, et al.
According to a very helpful analysis by Americans for Tax Fairness, 13 of the corporations whose CEOs are behind this lobby paid zero taxes in recent years. Here is their chart drawn from an analysis of IRS data by Citizens for Tax Justice:
Federal Income Taxes 2008-2011
Profit? 2008-2011?$ Billions
Tax Subsidies 2008-2011?$ Billions
This stuff would be comical if it weren’t so influential. And if President Obama is re-elected, the corporate CEOs add up to one more pressure group pushing him to agree to a budget-cutting deal that will be suicidal for the economy and for his legacy in a second term.
Deficit reduction in a deep slump is not a path to recovery but to a deeper slump.
The fact that corporate CEOs are behind this latest push should not give the campaign greater credibility, but rather should signal “buyer beware.”
Despite the bipartisan camouflage, this campaign was always deeply conservative—hostile to social outlay, activist government, and a decent income distribution. Shame on any Democrat who doesn’t see through it.
How is lowering the tax rate on corporations who pay zero taxes anyway going to do anything for the economy?