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Government Debt is NOT like Mortgage Debt [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-01-02
Voters are being gaslighted by politicians who argue we can cut government spending to achieve prosperity. They point to the federal debt and with quivering lip, give us huge numbers to scare us into believing that we each owe more than our lifetime earnings in government debt.
Rubbish.
Banks make money on the interest they charge on loans. The bigger your loan, the more interest they will earn. They would be happy to collect interest on the unpaid principle forever, except that you, the borrower, are mortal and will die some day. So they require you to retire the principal before you expire this lifetime. Their biggest loan requirement is primarily that your payment be within your means so that you pay it off before you die.
Corporations are not mortal, theoretically. And governments are corporations. Being immortal, they will exist forever, and there is no reason they HAVE to pay off their debt. Unless, of course, the amount of debt exceeds their ability to make the interest payments.
When you apply for a home loan, they look at your income and assume that you are eligible so long as the mortgage costs less than 28% of your income. If the interest exceeds 28%, you can cut your expenses or you can raise income. The same thing applies to corporations, including the government.
The GOP has held sway with “Supply-Side” economics since Reagon, cutting top tax rates to individuals and corporations time and again. And ever since Reagon, wages have stagnated, the wealthy have become VERY wealthy. Income disparity has reached heights that destabilize society. At the same time, services to those struggling hourly workers are being eroded and cut because “they cost too much”.
Tax cuts cost too much, too. Most wealthy corporations pay little in taxes anymore. The idle rich do not pay either, as their money managers use borrowing and accounting maneuvers to avoid taxes. The average billionaire pays a smaller tax rate than their office help. They benefit so much from American workers that they really do owe more than they are paying. Their wealth was built upon public roads and education, upon regulated Markets and orderly transport. They did not do it themselves. You and me customers built their wealth.
Henry Ford understood that the only thing he needed to succeed in business was customers. Who were his customers? Anyone with enough disposable income to purchase his products. That is why he paid his workers far more than his competitors did. He wanted them as customers. A higher minimum wage that becomes a living wage would be a good start on expanding America’s customer base.
And another biggie. Only in America is healthcare an employee benefit. An expensive benefit whose costs business struggle to afford. And why is healthcare so costly in America? Because corporations prioritize share-holders over patients. It’s not just that we have the most expensive healthcare in the world, we also lag behind most every developed nation in health outcomes. Single-payer systems from Canada to Japan to most all of Europe demonstrate the economic advantages of single-payer systems year in and year out.
You are being gaslighted when you are told horror stories about single-payer systems without direct comparison to the medical malpractice in our own profit-driven system. Do the research and think for yourself.
Government intervention in childcare and end of life care would be life-changing for millions of workers and the business that employ them. Raising the income limit for Social Security taxes would keep the program solvent and maintain retirees status as consumers, whose purchases create wealth for those at the top.
People are not a burden. Investing in them provides a healthy return on that investment. We cannot cut our way to prosperity. It has never worked in the past, and it will not work now, either. But we can demand that the wealthy who owe everything to the labors of those who make, purchase, and service their wares bear a fair share of the responsibility for maintaining our consumer economy.
Road, schools, medical institutions and the like are necessary for all to prosper. And they are everyone’s responsibility. After preaching that “What you do for the least of your brethren, you do for me”, Jesus stated “It is easier for a camel to go through the eye of a needle than for a rich person to enter the Kingdom of God!” (Matthew 19:24). Watching Elon Musk et al, I say “Amen” to that!
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