The deficit fabrication and Jared Polis
I see my Democratic congressman Jared Polis is continuing his bold attack on American living standards with his ever growing focus on deficits and the Bowles-Simpson “compromise” agenda of slashing social security, medicare, and “discretionary” spending. He’s now teamed up with the Concord Coalition in giving “workshops” on balancing the federal deficit. What is the Concord Coalition?
The Concord Coalition is dedicated to educating the public about the causes and consequences of federal budget deficits, the long-term challenges facing America’s unsustainable entitlement programs, and how to build a sound economy for future generations.
Completely missing from the Bowles-Simpson / Republican Party / Democratic Party / Concord Coalition / Jared Polis Agenda is any semblance of a fair, logical, or democratic assessment of our world. Mr. Polis takes it as a given that living standards need to be reduced in order to “restore fiscal responsibility” but how can that be justified? With technological capacity and productivity at astounding heights, is there not something obscene, even evil, in suggesting to average people that life must get harder? Surely there’s no “real” basis for it.
The focus on the deficit is a total deception. It’s a plain and simple fact that the United States has the complete power to create dollars without cost. Shouldn’t it therefore be obvious to anyone with half a brain, to paraphrase Allan Simpson, that there’s something pretty odd with the idea we need to borrow our very own currency. Even the Fed, not a radical organization, recognizes this. Over the past few years it’s purchased massive sums of treasury obligations – and it’s a simple bookkeeping operation: bank reserves are exchanged for interest paying treasury bills, notes, and bonds. An interest rate of .25% is currently paid on the reserves but it’s completely discretionary. Nothing’s really changed after this exchange but somehow the deficit’s been reduced. Are we to consider bank reserves as federal debt? Of course not but consistency should say yes. The whole proposition that the monopoly issuer of a fiat currency can be in debt is an absurd accounting fabrication.
But this false fabrication plays a serious and highly regressive political role. It limits what society can spend outside of what’s decided by the large corporations, “investors”, and “markets”. Living standards therefore become subject to these powerful institutions and we’re led into the absurdity of being told we need to reduce retirement security, cut back health care, limit spending on useful programs, accept growing city and state bankruptcies, and put up with massive unemployment and poverty despite being so incredibly advanced in our technology and productivity.
The deficit fabrication is a right wing agenda completely bought into by Republicans and mainstream Democrats. I’m not sure what motivates our “progressive” representative here in Boulder. His wealth and much of his voting record surely indicate a laissez faire world view. But, to be fair, it could also be a simple lack of education. If that’s so, it would be fantastic if Mr. Polis, a great cheerleader for ever more education, would follow his own education agenda and educate himself on the basics of government spending, monetary creation, and the potential of fiat currency systems. He could then step forward, drop the deficit nonsense, and truly represent his district.