Who Will Pay For The Ballooning National Debt?
There’s nothing new about this game. Republicans have said for decades now that tax cuts don’t cause deficits; they pay for themselves with economic growth.
Last year, Republicans passed a massive tax cut that every economist, liberal or Republican, predicted would balloon the deficit and plunge the nation into much deeper debt. And this week, those prognostications came true: News broke that the deficit, the annual amount of overspending, has ballooned to nearly $780 billion.
But Republicans say: Hold on a second. It’s not the tax cuts that are causing the imbalance – it’s Social Security and Medicare. And the answer must be to cut spending on those massive federal programs, rather than restore the revenues lost from the tax cuts.
There’s nothing new about this game. Republicans have said for decades now that tax cuts don’t cause deficits; they pay for themselves with economic growth.
And they have also threatened before to take it out on safety net programs when their tax cuts inevitably fail to generate enough growth to offset revenue losses.
But is there something more sinister about this time in our country, our cruel politics, and the idea of making the vulnerable pay to restore economic balance?
Economist and senior fellow with the Brookings Institution Isabel Sawhill joins Detroit Today host Stephen Henderson to discuss the issues.
She recently wrote for Brookings:
Stagnating incomes, opportunity gaps, and fragile families are all reasons to worry about the middle class. Public policy has done little to ameliorate these concerns. After accounting for taxes and transfers, growth in average middle-class household incomes has lagged significantly behind the lowest and, especially, the highest income quintiles. Incomes of the top 20 percent rose by 97 percent from 1979-2014—over twice as much as middle-class incomes. Even the lowest quintile has seen faster income growth, 69 percent, or two thirds higher than income growth for the middle class. In short, both public policy and the economy are leaving the middle class behind.
To hear Sawhill on Detroit Today, click on the audio player above.
