WHOSE DEBT IS IT ANYWAY?
Kevin Clark: “From Friday’s column (quoting Matt Taibbi): ‘Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.’ The good news for Romney (and arguably bad news for the rest of us) is that his opponent is one of that handful of people on planet Earth who is an even more irresponsible debt creator. I don’t think Romney’s anywhere near $5 trillion.”
There are two reasons, I think, Kevin’s knock on the President is unfair.
First off, it matters what debt is incurred for. Debt incurred to buy a Rolex is different from debt to buy office equipment you need to start a business. Debt incurred to lower taxes on rich people is different from debt incurred to help desperate families and modernize the national infrastructure. One is irresponsible (Kevin’s term), the other most emphatically is not.
Burdening the companies Mr. Romney did burden with debt served no greater purpose than enriching a few investors and weakening those companies. Nothing illegal about that, just not a compelling need to do it. Far from serving a greater purpose, you could argue that the net effect for society is negative.
By contrast, the compelling need to run deficits in deep recessions is to replace the private demand that has been lost with public demand, to bridge the gap until demand picks up again – which, after a financial collapse, always takes a very long time. And also, not inconsequentially, to at least partially mitigate widespread suffering — keeping children from starving, say, or coming through with unemployment benefits so fewer people become homeless.
So I wold argue to Kevin that there is a difference between borrowing to enrich oneself, on the one hand, and borrowing to, say, win World War II (for which we borrowed massively, and which had the happy side effect of ending the Depression) or, in this case, borrowing to dig ourselves out of the calamitous economic ditch Republican leadership from 2001-2008 drove us into. (You will recall that Bill Clinton handed the Republicans a very good economic situation on which to build.)
The second thing to note is that the $1.5 trillion 2009 budget deficit began running BEFORE OBAMA WAS EVEN ELECTED. October 1, 2008. No fair-minded person, I think, would call that Obama’s debt — it’s Bush’s debt. Which brings down Obama’s debt from $5 trillion to a still staggering $4 trillion or so — but debt all incurred because of the horrible economic circumstances he was handed. You want to incur debt to get out of a deep recession. Except, you want to incur as much of it as possible not for tax cuts (which is the part the Republicans demanded) but for infrastructure, to put people back to work rebuilding our country, which is what the President emphatically called for in his speech to a joint session of Congress a year ago — the American Jobs Act (“pass the bill right away”) — and which the Republicans blocked, as they have blocked so much else.
And speaking of the Debt . . .
UNFORTUNATE RNC SIGN PLACEMENT
Have you seen this? May be Photo-Shopped (does anybody know?), but could hardly be more apt.
Quote of the Day
Market economics as currently practiced often ... includes only what's countable, not what counts.~Rocky Mountain Institute
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