Fear Mongering Over Debt and Deficits – It’s Happened Before, Why Then, Why Now?

Why are we, as a nation, no longer expressing concern about the employment deficit? Because the media and the politicians are all fear mongering about deficit spending, the national debt, and terminating state employees and/or their benefits to fix their budget problems. “The sky is falling!”

The last time there were such fearful fantasies about debt and deficits was in the 80’s under Ronald Reagan when the top tax rate was reduced 42 points from 70 to 28 percent. At that time, it was done to scare us into accepting these significant income tax reductions for the mega and ultra rich and increased taxes for the poor.

 

Today’s fantasy fear mongering is about hiding the failure of those lopsided tax breaks intended to create jobs and making sure only the bottom 98 percent of us share equally in the misery of the Great Recession.

As for the exaggerated concerns for the national debt and deficit, the chart below shows how out of proportion the debt and deficit fear mongering is. As you can see, we’ve been in worse shape before and we survived. During WWII our national debt had reached over 120% of our GDP. As of September 2010, US Debt was at 93% of GDP.

This chart shows that when we were scared into the tax law changes in the 80s, our national debt was actually at its lowest point in the last 70 years. It also shows that since those excessive tax reductions were implemented, our national debt has more than doubled as a percent of the GDP.

 

The current situation is worse than when President Reagan and the supply siders first scared us about it, but we are still overreacting to authoritarian fearful fantasies. Remember, fearful people do stupid things. We survived the larger deficits of WWII and should survive now unless Congress and the states start implementing fear based (stupid) changes.

The video below details who is responsible for all this debt. The authoritarians responsible for growing it are now responsible for scaring us about it.

 

Authoritarian fearful fantasies (Think Glenn Beck), or Noble Lies, helped create the current large deficit over the past three decades. In addition to creating our current debt problems and hiding the failure of supply-side tax breaks to create jobs, the fear mongering is also hiding the fact that the authoritarians have no plan for creating jobs.

As shown here and stated by others, the Bush tax breaks for today’s mega and ultra rich have not created jobs. Just look at job growth during the last ten years with the Bush tax breaks for the mega and ultra rich. The chart below shows that the total of those employed as a percent of the total population is down about six percent in the last 10 years. In other words, job growth hasn’t kept up with population growth and the Bush tax breaks did nothing to prevent this lack of job growth.

 

Also under G. W. Bush’s presidency, only “375,000 jobs a year [were created], the most pitiful record since 1939 when the Bureau of Labor Statistics started collecting the numbers.”

One last point about our fear driven reactions to the nation’s debt. If the national debt and deficit spending is such a threat to our economy, why has the stock market almost doubled in value in the last two years?

 

Where are the jobs Mr. Boehner? Why aren’t you working with others to promote job growth instead of scaring us with false fantasies that will kill more middle class jobs, bust unions, and hide the growing plutocracy?

Update showing how we went from a projected $6 trillion surplus to a $6 trillion deficit:

Saving the Planet or Fixing the Debt