When we hear talk in Congress of investing in infrastructure or funding social services, the proposals always go hand in hand with squawking from deficit hawks. Republicans and even conservative Democrats (including notoriously recalcitrant Senator Joe Manchin of West Virginia) fret about how spending money on improving our country will bring ruin by contributing to the national debt.
They’re wrong. The truth is that fears over adding to the national deficit aren’t warranted, and they are certainly no reason to refuse funding social services for our citizens. It’s beyond time that we talk about the hypocrisy from “altruistic” deficit squawks in Washington, and what the national deficit actually means for the American people and our economy.
Most Americans think about the national debt similarly to how they think about their own debt – as something that causes massive problems if we take on large amounts. Even some of our leaders suggest that since American families must live within their means and balance their family budgets, that philosophy should apply to the government as well. The two, however, are simply not comparable. The government of the most powerful country on the face of the earth is fundamentally different from a typical family, and the debt of a nation that not only creates its own currency but also has the largest economy in the world just doesn’t function the same as personal or business debt would either. In fact, it’s not just wrong to treat a nation’s deficit the same way we would the deficit of an individual, household, or business, it’s irresponsible.
Unlike countries that are currency users, such as Greece and other countries in the EU, the US is a currency-issuing nation and cannot become bankrupt. Our nation can always keep its promise to make good on its debts. That includes making any interest payments to bondholders, funding our highways, paying the salaries of teachers and civil servants, caring for veterans, and keeping promises to provide a living income to our seniors.
The sustained stability of the United States currency and its status as the most trusted system in the world is both a sign of and the reason for its safety. Financial entities all over the world want their money in American dollars in the United States and under the jurisdiction of the United States because that is where it is safest. That’s why there is demand for instruments and investments denominated in United States dollars and instruments guaranteed by the United States government from people who are happy to lend their money to the United States government even at low interest rates.
There is not a national debt crisis in the US. Our “national debt,” since it is denominated in our own sovereign currency, is neither unsustainable nor a cause for concern. What really does matter, however, is our nation’s access to real resources and our ability to share them across our population.
While we may not have a national deficit issue in this country, we can create a deficit of things that make our shared future better. Education, healthcare, a healthy environment, infrastructure, and employment are all things that we can have deficits in without proper support and funding from the American government.
It’s time we expose deficit fear-mongering for the fraud that it is. We sacrifice a large portion of our nation’s productive potential and our children’s future well-being to it every day, but it’s never satisfied. We have a sovereign currency that can and should be used to unleash the full potential of our nation and our people but we have locked it up in the name of some manufactured idea of “responsibility.”
Deficit squawks may claim the mantle of fiscal responsibility, but their ideology is anything but responsible. Just look at the last time they controlled the federal government – they passed nearly $2 trillion in tax cuts for the wealthiest in our nation, and then went immediately back to using that debt as an excuse to oppose programs and policies the social programs that millions of Americans rely on. The truth is that their real aim is not to limit the debt, it’s to use it as an excuse to slash the safety net, block equitable public investments, and push corporate interests. In the end deficit squawks are using their status to further the goals of private interests at the expense of the rest of us.
They are wrong to prioritize deficit reduction over protecting millions of Americans, period. However, if they ARE dead-set on not adding to the debt, a wealth tax would be an easy way to raise revenue for economic relief programs. While deficit hawks’ focus on the national debt may be misguided, if they are truly looking to shrink the deficit, there’s no better way to do it than to tax the rich. If Democrats are able to capitalize on these concerns over the deficit to pass tax increases and other important programs, they should do everything they can to make it happen.