America’s deficit attention disorder
“The political debate in the United States and Europe has focused attention on public financial deficits and how best to resolve them. Tragically, the debate largely ignores the deficits that most endanger our future.
In the United States, as Republican deficit hawks tell the story, ‘America is broke. We must cut government spending on social programs we cannot afford. And we must lower taxes on Wall Street job creators so they can invest to get the economy growing, create new jobs, increase total tax revenues, and eliminate the deficit.’
Democrats respond, ‘Yes, we’re pretty broke, but the answer is to raise taxes on Wall Street looters to pay for government spending that primes the economic pump by putting people to work building critical infrastructure and performing essential public services. This puts money in people’s pockets to spend on private sector goods and services and is our best hope to grow the economy.’
Democrats have the better side of the argument, but both sides have it wrong on two key points.
- First, both focus on growing GDP, ignoring the reality that under the regime of Wall Street rule, the benefits of GDP growth over the past several decades have gone almost exclusively to the 1 percent—with dire consequences for democracy and the health of the social and natural capital on which true prosperity depends.
- Second, both focus on financial deficits, which can be resolved with relative ease if we are truly serious about it; and ignore far more dangerous and difficult-to-resolve social and environmental deficits. I call it a case of deficit attention disorder.
To achieve the ideal of a world that secures health and prosperity for all people for generations to come, we must reframe the public debate about the choices we face as a nation and as a species. We must measure economic performance against the outcomes we really want, give life priority over money, and recognize that money is a means, not an end.”
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