2. Fear Mongering Over the National Debt
In one of his many insightful columns Nobel laureate Paul Krugman wrote that fear mongering over the national debt may prove to be as destructive as was fear mongering over weapons of mass destruction (WMDs) that the Bush Administration relied on to justify bombing Bagdad. Just as the WMDs were never found so too says Krugman has no evidence been found that proves the fearful claim by politicians, cons, and others that the national debt destabilizes our economy as well as jeopardizes its recovery. The reason the unfounded claims could prove destructive in the short term he says is that they create a pressure for reductions in federal spending that would actually worsen the current socioeconomic situation.
As I see it there is good national debt and there is bad national debt. Good debt means enough federal spending on programs to help meet real economic and social needs such as more employment, better education, and better and affordable health care that once better met will require far less government spending in the future, by then only maintenance spending in contrast to remedial spending. Bad debt means going into the red from unreasonably and unfairly low taxing of the wealthy; from more rather than less corporate welfare, especially warfare welfare; and from federal spending on initiatives our society doesn't really need, actually suffers from it, and shouldn't be burdened by them.
National debt is a political and socioeconomic phenomenon. When President Clinton left office there had been no federal deficit for three years and surpluses were expected to continue for a decade longer. President Bush's policies, on the other hand, created massive bad debt. His policies were to overspend on the wrong initiatives and charge the wealthy even less for expenses. Both presidents in their policies contributed in no small measure to Economic Katrina, and attempts to recover from it simply inflated the debt (not all the economic stimulus spending in my opinion was bad debt). Today, the national debt seems to be around $13 trillion. Meanwhile, the social needs of the country have been festering from underfunding of education, health care, and employment programs, the very needs that had they been attended to would have, as I said, resulted in good and shorter term debt.
The taskforce needs to examine federal spending levels under varying political, economic, and social conditions and propose some kind of a gauge for determining what would be the appropriate deficit levels in the short and long term under the various conditions, including a good estimate of what would be a realistic, war-free defense budget.
3. Privatization
Rabid government haters and corporate purveyors of privatization argue that business can do much better than government in providing public services and meeting public needs in general. Not so! Michael Edwards, activist and author, explains in his book, Small Change: Why Business Won't Save the World that the inherent nature of business with its profit-seeking motive and its short-term perspective and demands makes business unable to come even close to solving hardcore problems like poverty, epidemics, war, social discord, and the like. I would simply add this question: How many business firms, large or small, can you name that are making significant inroads on such problems?
Yet the public sector is increasingly being taken over by the private sector. Reclaiming them totally, as in the nationalization of industries, would be a draconian and politically suicidal step. Nevertheless the task force should strongly advocate nationalizing certain public-sensitive industries such as the defense industry, the energy industry, the financial services industry, and the health care industry. The task force should explore all proposals for reversing privatization, including the many proposed by the non-economists on my list (but insufficient space here to include those proposals).
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