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May 23, 2013
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 Good Debt, Bad DebtPosted on Mar 10, 2010There is a pathetic quality to our discussion of deficits and fiscal responsibility because we never face up to how much we need government to do. Our debates are also characterized by a politically convenient amnesia. Just a decade ago, we were running surpluses so big that Alan Greenspan, then chairman of the Federal Reserve, worried about what would happen once our national debt was liquidated. We had this problem well in hand until we started waging wars and cutting taxes at the same time. What would a rational approach to the budget look like? It would begin by accepting that running deficits at a time of high unemployment is a good thing. We would celebrate the fact that the world’s governments were far wiser in this downturn than their counterparts were during the Great Depression. It is a hugely underrated achievement of international cooperation that the world’s 20 leading economic powers pumped trillions of dollars into the global economy to prevent collapse. Catastrophe was averted, and growth, although sluggish, has resumed. True, unemployment in our country is still too high. But the lesson here is not that President Barack Obama’s economic stimulus failed but that it was too small to do all that needed to be done. Those who would just repeal stimulus spending—the bright idea of the House Republican Study Committee—would take us backward. Advertisement Whether we like it or not, government will grow in the coming decades because the private economy will not offer the same security it once did through employer-provided health and pensions plans. In health care, the status quo means that more and more Americans will find themselves without insurance because an ever-growing number of employers simply won’t be able to afford the expense. This is unsustainable. Enacting health reform now will allow us to plan how government can take on these costs gradually. As for retirement security, most Americans know their private pensions will be nothing like those enjoyed by their parents or grandparents. So reforming Medicare and Social Security can never be a simple matter of cutting spending. We have to look at the entire health care picture and rethink our whole retirement system. Rep. Paul Ryan, R-Wis., has gotten credit for doing a version of this in his “Roadmap for America’s Future.” He proposes to balance the budget by, among other things, turning Medicare into a voucher program and partially privatizing Social Security. Ryan gets points for being a genuinely nice person, and because he says outright what many other Republicans only mumble. But the path he suggests is exactly wrong. Weakening social insurance is the opposite of what the country needs to do now, and it doesn’t even get us to fiscal nirvana. Ryan’s plan, according to the Congressional Budget Office, would still leave us with a deficit of 5 percent of GDP in 2034 and would only then start dropping. Nor does our current debate address what government must do to keep our country competitive. Our physical plant—schools and roads, bridges and airports—is crumbling. This calls for new investments in transit and energy, and in higher education, new technologies and research. We have forgotten the Dwight Eisenhower lesson: that government investment is essential to private-sector growth. So how should the various deficit-reduction commissions, including the one Obama created, proceed? Here’s a three-step plan. First, start not with “entitlements” but with a broader assessment of what we will ask government to do over the next two generations. Be candid about priorities. This includes entitlements. It also includes what we should spend on national defense. Second, offer a menu of the fairest and most economically efficient ways of raising the revenues to pay for it. Third, propose a capital budget for the federal government so debt can be used the way it’s supposed to be used. Except in bad economic times, we shouldn’t borrow to cover government’s day-to-day costs. But government activities that enhance the prospects of future generations should be financed over time, much as successful companies use debt for long-term investments. There’s smart debt and there’s stupid debt. We need to start recognizing the difference.  TAGS:
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Benghazi: Dissecting Congressional Follies, Media Coverage and ‘Cover-Up’ Charges
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By ofersince72, June 11, 2010 at 12:33 am Link to this comment
Your second to last sentence gave you away…
How about the over a trill a year on the MIC costs ????
Report thisBy Payday Loans, June 10, 2010 at 8:13 pm Link to this comment
“We simply cannot continue to spend as if deficits don’t have consequences, as if waste doesn’t matter, as if the hard-earned tax dollars of the American people can be treated like Monopoly money, as if we can ignore this challenge for another generation.”
“. . . It’s time to save what we can, spend what we must and live within our means once again.”
- President Obama, 2010
Following this impressive and robust statement. The plans were produced to introduce the largest deficit in US history.
As a banker and one who has an active interests in world finance, in particular the USA federal government, I must concede that the contradictions are too great for comprehension.
To consider the worlds future from an economic perspective one must look to the USA. I am concerned that the debt levels of our governments and middle class are beyond the scope to a balance level of management. There is a greed that appears to be swallowing the positive intent of the Obama administration and therefore the world population. The wages bill, the production costs, the medical and education system all drain the potential for a balanced social and capitalist system. Select individuals are becoming increasingly wealthy at the expense of a robust system and healthy communities.
Report thisBy Park, March 16, 2010 at 8:19 am Link to this comment
(Unregistered commenter)
this is just bull shit
Report thisBy bogi666, March 16, 2010 at 5:45 am Link to this comment
(Unregistered commenter)
Debt in a religious context warns against usury[criminal interest rates legalized] and the money changers, Wall St. When the “Supreme” court legalized usury, interest rates formerly restricted to illegal loan sharking whom wouldn’t even kick the borrower and family out of their houses like the bangksters do. With Reagoon the purpose of the Nation was to engage in money changing, Wall St, greed is good mentality. Most truthful spiritual traditions, including the Abrahamic tradions, warn against usury and the only violence committed by The Christ was when he turned over the tables of the money changers in the Synagogue, condemning the money changers as evil. It is the evil of the usurers and the money changers that are running the USG, a ruinous and fatal error that cannot last and will end in teh ruin of this country.
Report thisBy rico, suave, March 15, 2010 at 7:12 pm Link to this comment
EJ: “we never face up to how much we need government to do.”
I do. I need government to keep me safe, build roads, run the post office and otherwise- STAY THE FUCK OUT OF MY WAY!
Report thisBy Glen Wayne, March 15, 2010 at 10:40 am Link to this comment
Dump the Fed empirePie March 15th, 2010
The ‘cash for trash’ Fed
levers us all for a better fall;
a fall to prime us for another shadow grift
more shorts while we get sold short shrift
a Made off confession without the lift,
while the public is left adrift
Line up your buggies for the camp
underwater just means a little damp
Grift, graft,.. Murd-ocracy
‘greed is good’ theocracy
deluded Corpratocracy
Profit rises with destruction
bomb rebuild and split the other
Holocaust ain’t freedom’s mother
Dump the Fed
The Murd-ocracy must end.
Perhaps a blend of cooperation
could merge with competition.
‘Co-opetition’
at least….
it’s better than rendition!
Report thisBy gerard, March 14, 2010 at 4:10 pm Link to this comment
Just one small part of the picture: How can anyone write an article on “good debt” and “bad debt” without mentioning interest rates? And just exactly how much is the interest on our “national debt” per day, and at what rate, and to whom are we paying it—if so. And what about borrowing to kill people? Is that “good” debt?
Report thisAnd what is the rationale for charging people who can’t pay back what they borrow, a higher rate of interest than people who can pay? Doesn’t it put them more into debt they can’t pay? And where is the end of that?
And what about people who make most of their money from interest on money they lend? How fair is that—sitting in an easy chair while 50 poor blokes work two jobs just to pay high rates of interest because they haven’t got enough money to buy what they need?
What’s great about punishing poor people? It’s this kind of simple, direct questions we have to answer as a democratic nation (hopefully) before we start “privatizing” social security or “privatizing” public education etc. etc.
Bad debt is debt that exacts punishment through giving the rich power to collect interest from the poor. It’s one bad basic aspect of “capitalism” that easily escapes the attention of the “fixers” in government and busines because they are the ones who are benefiting from such unjust procedures.
How come it’s left out of the picture here?
By nemesis2010, March 14, 2010 at 11:42 am Link to this comment
This is great! On Monday (03/08/10) Chris Hedges informed us that the Empire was kaput and 3 days later Dionne says we need to reform fiscal policy including Medicare, Medicaid, and the totally bankrupted scam called Social Security. WTF?
How are Americans supposed to make sense of this imbroglio? No wonder there is such a lack of public interest in the political process.
Corporate media is the bane of this society.
Report thisBy Unemployed Bloke, March 13, 2010 at 5:58 pm Link to this comment
(Unregistered commenter)
To the Elites in the District of Columbia money is something to be printed on a whim.
“A republic, if you can keep it.” Ben Framklin
A trillion borrowed here and a trillion borrowed there turns free people into slaves.
There’s always a bright side to the ugly: There aren’t too many more jobs that can be outsourced. We all should look to outsourcing our elected officials, perhaps we can get a better deal. Or at least candidates who understand our history. I hear India has really smart people. And apparently there are some financially savvy folks in China, seeing how they pretty much own a big portion of us now.
We were always at war with Eurasia. Or was it Eastasia.
Report thisBy tropicgirl, March 11, 2010 at 12:40 pm Link to this comment
(Unregistered commenter)
This is one of the most ridiculous articles I have read by this man.
““Whether we like it or not, government will grow in the coming decades
because the private economy will not offer the same security it once did
through employer-provided health and pensions plans.”“
It better not. Government is NOT an economy and you are a very strange man.
And government is not offering us ANY security, unless you make them return
the pile of I.O.U.‘s which is Social Security and Medicare (money they have taken
whenever they please). Then we can talk. And pay us back for bailing out
crooked banks.
It’s very simple E.J. and this fact is dawning on everyone worldwide… Debt is
BAD. It is the mechanism that strong countries use against weak ones, in lieu
of war. If you own a country’s debt, you pretty much control the country.
That is one reason why Hillary goes around to third world countries offering
money all the time (that we don’t have). Its much easier than a war.
We don’t want this country in that position. It could easily happen if you face
reality and get your head out of the past… There are international forces today
much stronger than us, now.
Your way of thinking is just dangerous and ignorant.
Report thisBy 77802, March 11, 2010 at 11:39 am Link to this comment
There has been some tarnish marks along the way in the history of the Kentucky Derby with Dancers Image Jame man becoming the first horse in history – in fact the ONLY horse in history – to be disqualified from winning the Kentucky Derby in 1968 after traces of an anti-inflammatory analgesic drug known as phenylbutazone was found in the analysis Christan Audigier Bag of the horses urine. A few years later the rules at the Kentucky Derby were changed to allow horses to run the race while using phenylbutazone.
Report thisBy balkas, March 11, 2010 at 11:25 am Link to this comment
Ellis, bible and torah tell one what to do, but not how to do it nor how to follow anyone who’s actually turning the other cheek; if any ever did!
I have not encountered anyone turning the other cheek,nor have i seen a documented case of that ever happening.
So if jesus[or people who put words in his mouth]tells u what to do,but doesn’t show how to do it, that is simply lying.
In any case, kids learn to behave as sociey behaves. Kids can see that priestly class is structured just like an army; women relegated to second class value and priests thundering with damnation, cursing, blaming; burning people at stakes, waging wars, hating rabbis, imams, umma and vice versa, etc.
And why wld god need clazy priests to begin with? Or nuns? Don’t these people behave even more atrociously than we, the impious?
Isn’t god almighty? Or is he/she/it limited by priestly imagination? So that they become more important than their ‘gods’? tnx
Report thisBy bogi666, March 11, 2010 at 10:00 am Link to this comment
(Unregistered commenter)
It was Reagan, the world greatest con man, who ushered in this age of huge deficits for the purpose of transferring the wealth of the middle and working classes to the wealthy. It goes like this, Government bonds are sold to finance the deficit and the proceeds from the sale of bonds are then doled out to the CORPORATE WELFARE KINGS and the wealthy. This is no mystery that the number on lobbyistin Wash., DC has gone from 500 when Reagan took office to 45,000 today and the Federal deficits are the reason. Being captive of the Corporate/Government, Facism by definition, the deficits will not end unless in bankruptcy but most likely by just printing $ money to the point its useless. The best analogy to the USG is Germany after WW1 whenit couldn’t possibly pay the reparation to the war’s victors. The USG cannot pay its China debt and the Chinese can’t collect it along with Japan and other countries. With the obscene Pentagon budget bankruptcy is evident. For instance the USG Great Electronic Wall of Space with its 1000’s of worldwide outposts provides a prime example with a precedent the cost of the Great Wall of China bankrupt the country which lead to its collapse and the invasion by the mongols, which it was to prevent. Now the USA won’t be invaded, well except by bill collectors.
Report thisBy bonito, March 11, 2010 at 9:19 am Link to this comment
When the GOP speaks of reducing the deficit, what
they really mean is cutting or privatizing Social
Security, and Medicare. Two of our government
programs that really work and at a fraction of the
cost that would otherwise be if were in the private
sector.
On the other hand take our so called Defense
Spending, most of which is spent on offensive
Weapons, invading third world countries, whom have
little defense compared to the U.S., and, maintaining
hundreds of bases throughout the globe. This so
called defense spending that the U.S. taxpayer picks
up the tab, is more then all of the other countries
in the world combined. If reduced spending is going
to save this nation, then one might think that this
would be the place to start, but then the first thing
that the GOP wants to do is cut health care for the
poor, working poor, and the middle class whom soon
will join the working poor, while cutting taxes for
the rich and greedy. But certainly do not touch our
military spending no matter how useless it becomes.
The tax cuts rammed through Congress by Bush and the
Report thisGOP ( by reconciliation ) certainly did wonders for
the top 3%, created a million Millionaires,
thousands of multi-millionaires, and many
billionaires. If the people we send to Congress
cannot do any better then this, then just maybe we
need a new Congress, and/or a new party to compete
with our so called two party system that is looking
more like a single party system each passing day.
By balkas, March 11, 2010 at 9:12 am Link to this comment
Ellis, to me, morality [our wishes, hopes, hate, love] is reality because we humans and all biota is part of one and only reality.
Trust is as real as a rock. And may be one of our greatest atributes. To trust others and be trusted in turn is our greatest wealth.
Why vast numbers of americans ok wars? Because they trust their leadership; which is often abused!
Even greed is real as water and necessary for our survival as long as it is exercised so that it enhances everybody’s survival and well being.
We have survived beacause of our pristine morality: extremely strong will to survive and pass our knowledge onto next generations in order that they cld improve life and learn from their mistakes.
Problem is that our ‘leaders’ have utterly destroyed our pristine morality and now we ?all are quite unsane.
We lie, cheat, deceive, call one another names, steal, murder, exploit, abuse, etc.
Does one think we wld have survived had our ancestors behaved as people behave now? tnx
Report thisBy balkas, March 11, 2010 at 8:53 am Link to this comment
Ellis, What does mean: “By the testimony of two things known to be true, or three, shall be established as equally true every matter”?
I am not kidding u when i say i haven’t a clue ab meaning of this, what u call, ” Law of apsolute logic”.
This logic does come from science of goddism. This science does differ from all other sciences in the inquiry of all things.
The other sciences first of all look at things, and then talk ab them; goddism, on the other hand first talks and then looks, but not at everything- only what supports their talk.tnx
Report thisBy ofersince72, March 11, 2010 at 12:55 am Link to this comment
That was confusing….......Would someone translate.
Report this