Randroid details
by digby
The great Trudy Lieberman has written a must-read piece on the social security debate over at Columbia Journalism Review dissecting in detail the egregious role of the press in the indoctrination of the public that there is a funding crisis. I won't excerpt it, you have to read the whole thing.
Felix Salmon at Reuters links to it as well and connects yet another important dot:
The idea of “fiscal responsibility” seems to have become as American as motherhood and apple pie — both parties preach it, and say the other guys are the profligate ones. The group of people saying “hey, we print our own money, interest rates are at zero, inflation is not an issue, the corporate sector isn’t borrowing, there are a thousand more important things to worry about right now, why on earth is everybody worried about the deficit all of a sudden” is in a decided minority.
The obsession about fiscal prudence is a new phenomenon, and can be dated, pretty much, to 2008, when Blackstone went public and Pete Peterson took his billion dollars in proceeds and decided to use it to found the Peter G Peterson Foundation. Wherever fiscal prudence is preached, Peterson’s money can nearly always be found.
On May 15, for instance, the PGPF is hosting the third annual Fiscal Summit, featuring fawning softball questions for Bill Clinton, John Boehner, Tim Geithner, Paul Ryan, Alan Simpson, and others. I myself was asked to moderate a discussion in New York a couple of weeks earlier, launching “A Curriculum for Teaching about the Federal Budget, National Debt, and Budget Deficit” called Understanding Fiscal Responsibility. Peterson’s going to be there, and the likes of Peter Orszag and Kirsten Gillibrand have been invited.
I’m decidedly dubious about the wisdom of teaching sovereign fiscal responsibility to high schoolers. For one thing, it’s inevitable that many teachers will resort to the personal-finance metaphor, and thereby teach something which is downright wrong. And if you look at the way these curricula are constructed, there’s an incredibly strong bias in favor of spending cuts and against tax hikes.
I hadn't seen this before, but it's kind of chilling:
Take, for instance, the National Budget Simulation, a key part of many fiscal-responsibility lesson plans. Here’s how it works:
The new President of the United States has been elected on the promise of fiscal responsibility. He has promised the voters he will not raise taxes, and he will not reduce Social Security or Medicare…
Suddenly, the United States is subject to military attack — a turn of events not anticipated in the current budget. At the same time, a lingering recession reduces the government’s tax revenues and forces the government to increase its spending on unemployment benefits, welfare, housing assistance, food stamps, and other need-based programs. Because of the increased spending and reduced revenues, the nation falls into a projected deficit…
The President is committed to keeping his campaign promises, in order to maintain support for his reelection. He must protect the programs he promised to protect, and he cannot raise taxes, so he must cut spending on other programs… The President turns to you, his trusted economic advisor, for help.
They're teaching kids that you simply cannot raise taxes or run deficits. As if it's a law of physics. Presidents back off their campaign promises all the time and certainly have the ability to do it in an emergency. To hell with his reelection. Should he put people into the street? Why would that get him reelected?
They are turning "deficit" into a taboo when it's a perfectly legitimate tool of government. (There are those who believe the whole concept is a fiction.) But they're going to teach this to kids, along with the stupid personal finance metaphor that everybody seems to love even though it's completely wrong, and inculcate in their minds a horrible belief that the government's only option in the midst of economic suffering is to make people suffer even more.
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