When President George W. Bush assumed office, most of those disgruntled about the stolen election contented themselves with this thought: Given our system of checks and balances, given the gridlock in Washington, how much damage could be done? Now we know: far more than the worst pessimists could have imagined. From the war in Iraq (and Afghanistan, which has cost us TWO HUNDRED BILLION DOLLARS since 2001,) (AMEND THAT FIGURE it is now FOUR TRILLION.) to the collapse of the credit markets, the financial losses are difficult to fathom. And behind those losses lie even greater missed opportunities: (Homes lost to Mortgage gate, where families had their life savings. Then, feeding, educating children, putting a roof over their heads, emotional security not Trauma. Then 4thousand plus GI's dead.) Put it all together -- FOUR TRILLION of YOUR TAX DOLLARS squandered on a stupid, lie-inspired war. That war triggered a housing pyramid scheme that impoverished the nation and enriched a few, and the money lost because of the recession -- and the gap between what we could have produced and what we did produce will easily exceed $8 trillion. Think what that kind of money could have done to provide SINGLE PAYER health care for the uninsured, (NOT THIS BOGUS OBAMA CARE.) and the PERFECTING of our education system, the building of a PLANET-SAVING green technology, the CASH TO GIVE EVERY STUDENT with a B+ AVERAGE FREE COLLEGE OR TRADE SCHOOL. Money to enable BUSINESS start-ups so capitalism could do what it does best, grow incrementally......The list is endless. So, the true cost of our missed opportunities is HUGE.The values deficit: One of the strengths of America is its diversity, and there has always
So, Consider the war: First there are the funds directly allocated to it by the government (an estimated $12 billion a month even according to the misleading accounting of the Bush administration). Much larger, as the Kennedy School's Linda Bilmes and I documented in The Three Trillion Dollar War, are the indirect costs: the salaries not earned by those wounded or killed, the economic activity displaced (from, say, spending on American hospitals to spending on Nepalese security contractors).
Such social and macroeconomic factors may account for more than $2 trillion of the war's overall cost.There is a silver lining in these clouds. If we can pull ourselves out of the malaise, if we can think more carefully and less bogus-patriotic --ideologically --about how to make our economy stronger and our society better, perhaps we can make progress in addressing some of our long-festering problems. As a road map for where to begin, consider the seven major shortfalls the Bush administration leaves behind.
The climate deficit: With the help of corporate accomplices such as
tried to persuade Americans that global warming was fiction. It is not, and even the
administration has finally admitted as much. But for eight years we did nothing, and
America pollutes more than ever -- a delay that will cost us dearly.
The equality deficit: In the past, even if those at the bottom saw
little or any of the gains
from economic expansion, life was viewed as a fair lottery. Up-by-your-bootstraps stories
are part of America's sense of identity. But today, the promise of the Horatio Alger legend
rings false. Upward mobility is becoming increasingly difficult. Growing divisions in income
and wealth are reinforced by a tax code that rewards those who have lucked out in the
globalization sweepstakes. As that realization sinks in, it will be even harder to find
The accountability deficit: The moguls of American finance justified
compensation by their ingenuity and the great benefits it supposedly bestowed upon the
country. Now the emperors have been shown to have no clothes. They did not know how
to manage risk; rather, their actions exacerbated risk. Capital was not well allocated;
hundreds of billions were misspent, a level of inefficiency much greater than what people
typically attribute to government. Yet the moguls walked away with hundreds of millions of
dollars while taxpayers, workers, and the economy as a whole were stuck with the tab.
The trade deficit: Over the past decade, the nation has been borrowing
abroad -- some $739 billion in 2007 alone. And it is easy to see why: With the
government running up huge debts, and with Americans' household savings close to zero,
there was nowhere else to turn. America has been living on borrowed money and
borrowed time, and the day of reckoning had to come. We used to lecture others about
what good economic policy meant. Now they are laughing behind our backs, and even
occasionally lecturing us. We've had to go begging to the sovereign wealth funds -- the
excess wealth that other governments have accumulated and can invest outside their
borders. We recoil at the idea of our government running a bank. But we seem to accept
the notion of foreign governments owning a major share in some of our iconic American
banks, institutions that are critical to our economy. (So critical, in fact, we have given the
Treasury a blank check to bail them out.)
The budget deficit: Thanks in part to runaway military spending, in
just eight short years
our national debt has increased by two-thirds, from $5.7 trillion to more than $9.5 trillion.
But as dramatic as they are, these numbers vastly understate the problem. Many of the
Iraq War bills, including the cost of benefits for injured veterans, have not yet come due,
and they could amount to more than $600 billion. The federal deficit this year is likely to
add up to another half-trillion to the nation's debt. And all this is before the Social Security
and Medicare bills for the baby boomers.
The investment deficit: Government accounting is different from that
in the private
sector. A firm that borrows to make a good investment will see its balance sheet
improved, and its leaders will be applauded. But in the public sector there is no balance
sheet, and as a result, too many of us focus too narrowly on the deficit. In reality, wise
government investments yield returns far higher than the interest rate the government pays
on its debt; in the long run, investments help reduce deficits. To cut them is penny-wise but
pound-foolish, as New Orleans' levees and Minneapolis' bridge attest.
There are two hypotheses (besides simple incompetence) about why Republicans
little attention to the growing budget shortfall. The first is that they simply trusted in
supply-side economics -- believing that, somehow, the economy would grow so much
better with lower taxes that deficits would be ephemeral. That notion has been shown for
the fantasy that it is.
The second theory is that by letting the budget deficit balloon,
Bush and his allies hoped to
force a reduction in the size of government. Indeed, the fiscal situation has grown so scary
that many responsible Democrats are now playing into the hands of these "starve the
beast" Republicans and calling for drastic cuts in expenditures. But with Democrats
worrying about appearing soft on security -- and therefore treating the military budget as
sacrosanct -- it is hard to cut spending without slashing the investments most important to
solving the crisis.
The most urgent task for the new president will be to restore the
Given our national debt, it is especially important to do that in ways that maximize the bang
for our buck and help address at least one of the major deficits. Tax cuts work -- if they
work -- by increasing consumption, but America's problem is that we have been on a
consumption binge; prolonging that binge just postpones dealing with the deeper problems.
States and localities are about to face real budget constraints as tax revenues plummet, and
unless something is done, they will be forced to cut spending, deepening the downturn. At
the federal level, we need to spend more, not less. The economy must be reconfigured to
reflect new realities -- including global warming. We will need fast trains and more efficient
power plants. Such expenditures stimulate the economy while providing the foundation for
long-term sustainable growth.
There are only two ways to pay for these investments: raise taxes or cut
expenditures. Upper-income Americans can well afford to pay higher taxes, and many
countries in Europe have succeeded because of, not despite, high tax rates -- rates that
have enabled them to invest and compete in a globalized world.
But needless to say, there will be resistance to tax increases, and so
the focus will shift to
cuts. But our social expenditures are already so bare-bones that there is little to spare.
Indeed, we stand out among the advanced industrial countries in the inadequacy of social
protection. The problems with America's health care system, for example, are well
recognized; fixing them means not only greater social justice, but greater economic
efficiency. (Healthier workers are more productive workers.) That leaves but one major
area in which to cut -- defense. We account for half of all the world's military expenditures,
with 42 percent of tax dollars spent directly or indirectly on defense. Even nonwar military
expenditures have soared. With so much money spent on weapons that don't work against
enemies that don't exist, there is ample room to increase security at the same time that we
cut defense expenditures.
The good news about today's bad economic news is that we're being forced
to curb our
material consumption. If we do it in the right way, it will help limit global warming and may
even force the realization that a truly high standard of living might entail more leisure, not
just more material goods.
The laws of nature and the laws of economics are unforgiving. We can abuse
environment, but only for a while. We can spend beyond our means, but only for a while.
We can free ride on the investments made in the past, but only for a while. Even the richest
country in the world ignores the laws of nature and the laws of economics at its peril.
Joseph Stiglitz, a Nobel laureate, is a professor of economics at Columbia University.
Want to study under him? COLUMBIA U without books or rent or food is 53grand a year.
But you'll be a hell of a history teacher with an economics minor when you get out, $212,000.00 later.
© 2008 Mother Jones All rights reserved.
View this story online at: http://www.alternet.org/story/113093/
Our POSTER is ANITA SANDS HERNANDEZ, Los Angeles Writer, mother of 4 and career Astrologer. Catch up with her websites TRUTHS GOV WILL HIDE & NEVER TELL YOU, also The FUTURE, WHAT'S COMIN' AT YA! & HOW TO SURVIVE the COMING GREAT DEPRESSION, and Secrets of Nature, HOLISTIC, AFFORDABLE HEALING. Also HOW TO LIVE on A NICKLE, The FRUGAL PAGE.* Anita is at email@example.com ). Get a free natal horoscope "my money/future life" reading now + copy horoscope as a Gif file graphic!
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