With all the talk of just how broke we are; could someone please explain to me just where the money comes from for Federal Disaster Relief? Now that Hurricane Irene is probably going to barrel up the East Coast (and had the earthquake out East been much more devestating) --- where do the "billions" come from in promised AID? Is this just more deficit spending? Thanks!!
Economics is like this:
We are not broke.
What we are, is being run into insolvency by a GOP that has been trying to make government small enough to "drown in a bathtub" like an unwanted baby... at least, according to former GOP leader DeLay.
By giving massive tax cuts to folks who have way more money than they need, and committing the nation to a schedule of defense spending on two wars that is cripplingly large, the GOP has succeeded in
UNDERFUNDING the richest 'nation' on earth.
In short... they decided to take LESS money in, and then voted to spend more money than we take in. (keep in mind that, when the so called 'fiscally responsible' GOP took control of all three branches of government, that this nation had a balanced budget, and was actively paying down debt with its surplus.)
But the 'people', who voted for a 'small government' agenda, nevertheless still want the nation to keep providing services. And the GOP still wants to continue corporate welfare programs that enrich the corporations to whom they are indebted.
So the government has to borrow the money against future earning... Just as you might have to, if you have an essential need crop up that you can not afford to pay with cash.
In other words, the nation's need to deficit spend has been created by spending bills passed by congress that exceed the amount of money they are willing to ask the public to pay in taxes.
There is plenty of money... the GOP is just unwilling to take it from corporations and individuals whose profits are at record high levels, despite the massive unemployment and economic ennui that are crushing most of the population. The very individuals and corporations who most greatly benefit from the stability and infrastructure that the government provided.
The GOP likes to cast this as a "family" scenario... that, when times get tough, the 'family' has to Cut Expenses. That they can not spend beyond their means.
Fair enough... but in fact, when times get tough, families cut as many discretionary expenses as they can... but if daddy's car needs to be fixed so he can get to work, they charge it.
And, when times get so hard that a family has to start cutting medicine for grandma... cut food... or cut into paying for heat and electricity.... then maybe, just maybe, that family has to entertain the idea that they have to INCREASE REVENUE. ...i.e.
make more money... no matter what the cost. Maybe Daddy has to get a second job, or ask for a raise.
Maybe Mommy can't be a stay at home mother anymore and has to get a job.
Maybe Junior has to start a paper route.
ANYTHING to bring in more money, to survive.
But the GOP says no to any increase in federal revenue, even though, thru most of the last century, the rich and corporations paid a LOT more in taxes, and they STILL got richer, and the nations economy grew at a faster rate than it has since the Deregulation and tax cutting frenzy of the 12 years prior to the recent economic crash.
Now- about disaster relief....
As I pointed out... in the mythic american family... if Daddy needs to get to work to earn any money at all, and his car's engine explodes... the family has no choice but to enter into debt to have it fixed...
If need be, the family might have to sign on for five years of additional debt to buy another car, if that is the only way to keep making a living.
Natural disasters wreck the infrastructure that the American people use to make a living... and their making a living is where the government gets its money. They not only tax the people's income, they tax their economic activity.
The Government has no choice but to try and get an affected area back up and running as quickly as possible, even if it means borrowing the money to do it.
If daddy getting to work brings in $3000 per month... and replacing a broken car costs $500 per month, plus interest on the loan of $75 per month....
Then Daddy would be an Idiot not to take the loan.
The problem with the debt crisis is that the GOP is arguing that, right now... with Daddy taking a pay cut, and the car broken down, and Daddy unable to get to work, that NOW is when Daddy can not afford to take on the additional debt of replacing the car.
The Whole point of a good credit rating ( like we USED to have) is to be able to borrow money when things get bad. When borrowing money makes the difference between surviving, or going under.
Or when borrowing money has the potential to pay off better than the cost of borrowing... ( The 'family' would borrow money to buy a second car,too, if it means Mommy can get a job and increase the family's future income, right? )
When things are going well... as they were under the Clinton presidency ( not his doing... but the explosion of the internet... which was an infrastructure built by the government)... THAT is when the family needs to allocate resources to paying down debt.
NOT in the midst of the crisis.
But then, Even the GOP understands that.
They spent like drunken sailors to try and deal with the recession caused by the collapse of the dot.com bubble... borrowing money to fight two wars...
They just spent it in the worst possible way, on things that did not increase revenue long term. They cut spending on infrastructure, cut further the regulations that, for 70 years, had prevented the boom and bust economics that are the result of a laissez faire policy.
And they cut income by letting the rich even further off the hook. Equivalent to having daddy quit his high paying job and get a job paying 30% less.
But the GOP does not care about your pain and your inability to make ends meet... they and their buddies have no trouble making ends meet.
They know full well that cutting spending, NOW, in the midst of crisis, is going to tank the economy.
They WANT to tank the economy. Because they know the American people are stupid enough to blame a tanked economy on the president... and all they care about is getting a republican back into power...
So they can then continue transferring the nation's treasure into the hands the already rich and already powerful.
Sure, this will eventually destroy the country... but when the shit hits the fan, you want to have friends on the Riviera, not in the bronx.
