Deficit reduction will need to be high on the legislative agenda of the 112th Congress. Government is borrowing too much — current policies are just not sustainable. The solutions are simple — spend less, increase revenues, or both. The politics of deficit reduction are ugly, and not at all good news for the American middle class.
Revenues at the federal, state, and local level took a big hit because of the greed and corruption of the American elites. America’s bankers gambled and lost and financial institutions were at the brink of collapse. Millions of workers lost their jobs and the housing market plunged as the real economy crumbled. The real economy and government revenues have still not recovered.
Our financial institutions were bailed out and are now making record profits. For that matter, American corporations are making record profits and still there is no recovery in the real economy. Millions remain unemployed and are losing their homes. There is no bailout for workers or homeowners. It raises the question: if companies are making record profits, why are we not seeing jobs and a real recovery?
If you listen to some politicians — notably Republicans, conservatives, and tea party fans — it’s the fault of the middle class. We’ve taken on too much personal debt, we buy homes we can’t afford, we don’t look hard enough for employment, and too much is spent on educating our children, providing for retirement security, and taking care of us in our old age.
Economic growth is the only path to recovery that can bring spending into line with revenues long term. A further assault on the middle class under the guise of “reform” will only prolong the pain for working class Americans, and do nothing to increase demand for goods and services — the fuel of the real economy.