In an epic moment of television, Rachel Maddow explained to America why Republicans are wrong to be focusing on the deficit when economic growth is the real problem.
Here is the video from MSNBC:
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Maddow said,
The deficit is not the biggest problem in the country. The deficit is shrinking already by hundreds of millions of dollars every year the president has been president. I mean, to the extent we need to count on debt, we need to use debt to accomplish other goals, you may not like the idea in the abstract, but, honestly, debt is cheaper now than it has been in a long time. Focusing on the debt and deficit to the exclusion of everything else is like arguing
about the color you might paint your car while you`re crashing that car into a tree.
In Washington, the Republicans are arguing about not a pretend problem but something honestly that is a secondary or tertiary problem — a problem that has no pressing real world need to be the one problem we wreck everything else to solve. If you look at the real economy in the real world right now, outside of Sunday morning, what everybody else in the country can tell, is what the economy needs right now is stimulus. You don`t need to take money out of the economy right now. You don`t need to further contract the economy. You need to stimulate the economy. The economists who track this stuff already think we`re not growing enough to get back to a healthy economy.
On Friday morning, economists cut their estimate to for how much we are growing right now. And then they cut it again on Friday afternoon, because people are not making enough money and therefore, not spending enough money and businesses are not hiring enough people. We need to be talking about growth in this country.
The problem we`ve got in this country is an economic growth problem. The problem is not the deficit. The deficit — sure, nobody wants there to be a deficit, but that`s not exactly the pressing need we`ve got as a
nation. Growing the economy, frankly, is also the only way we have gotten rid of red ink in the past, right? When Americans are better off, they pay more in taxes. With more tax revenue, the government can pay for the usual things.
Plus, we can pay down the debt.
Maddow attacked the very premise that got the nation into the “fiscal cliff” discussion in the first place– the Republican idea that deficits are more important than economic growth. President Obama appears to have one clear goal in mind when it comes to the fiscal cliff. While Republicans are trying to subtract money from the economy, President Obama’s first fiscal cliff proposal was actually economic stimulus. Obama isn’t calling for infrastructure spending as a way to cut the deficit. The president understands that within the framework of deficit talks, he has the opportunity to provide this country with more stimulus.
In the end, the dispute between the White House and congressional Republicans is about whether or not we add or subtract money from the economy.
As Maddow pointed out, today’s Republicans aren’t making the connection between deficit reduction and economic growth. The GOP has the equation backwards. They think that an austerity path can grow the economy, when all historical evidence suggests that the exact opposite is true.
Rachel Maddow attacked the philosophical and ideological conservative underpinnings that got the country into this mess. By pointing out, that the deficit conversation is a distraction from the nation’s real problem (economic growth), she pretty much ate the Republicans lunch.
The bad news for the GOP is that President Obama agrees with her, and a look beneath the surface reveals a president who has one eye on stimulus, and another on long term deficit reduction.
These fiscal cliff discussions are revealing that Republicans didn’t just lose an election, they also lost the philosophical battle over how to grow the economy.
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Mel Haun Sr
Dec. 4th, 2012 at 1:08 pm
I don’t take a scholar to know people making and spending their money, and them and the businesses paying taxes solves both problems, Thank you Rachel for putting it simply enough even Boner might be able to understand it.
Americans prefer coffee to tea thank you.
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siobhanie
Dec. 4th, 2012 at 1:28 pm
Thank you, Rachel!!! She does put it simply. Does the right think we can’t understand what they do – or don’t do?!
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Donna Veccia
Dec. 4th, 2012 at 1:30 pm
Rachael knows whats up and is my favorite fact checker. She has nailed all subjects with fact when the GOP didnt want to hear it.
She tells it like it is.
Maybe she should sit in on Congress discussions to keep them on the path.
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mjh
Dec. 4th, 2012 at 1:57 pm
Maybe she should sit in on Congress discussions to keep them on the path.
Why stop there? Maybe she should be elected to Congress . . .
.
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Sheri
Dec. 4th, 2012 at 9:16 pm
My response to the poster who suggested Rachel run for congress…
No not ever no! Rachel has far more power and influence than any one Congress person.
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Paws
Dec. 4th, 2012 at 3:00 pm
Rachel never fails to put things into perspective. Right now, we need to keep the economy moving forward or we’ll end up back in a recession. It still amazes me that even after the election, the GOP is trying to continue forward with all its same ideas – the very ideas the people voted against because these ideas do NOT work and will NOT help the economy.
They’re going to talk themselves out of existence and I, for one, won’t shed one tear over it.
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Kenneth Hicks
Dec. 4th, 2012 at 3:10 pm
The deficit is a problem that can be worked on over time. As Rachel maddow points out, one of the best ways to attack a deficit is through economic growth. How Republicans have turned the equation around is by trying to compare the US deficit to a household budget. It is disingenious, to say the least, but has managed to get too many voters thinking the wrong way around.
Some companies are responding the proper way: flush with cash and record low interest rates, Bershire Hathaway, under the direction of Warren Buffet, has invested over $9 billion this year in long-term assets like communications and construction. That the Fortune 500 continues to sit on over $2 trillion in cash is astounding in its short sightedness.
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lm945
Dec. 4th, 2012 at 3:30 pm
Rachel and the rest of the media need to remind the American people why the Bush tax cuts were designed to sunset in the first place.
It was to avoid the Byrd Rule. The Byrd Rule allows senators to block legislation if it will significantly increase the federal deficit.
Republicans knew what would happen when they passed the tax cuts. They have no call to whine and lie about it now.
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Anne
Dec. 4th, 2012 at 4:01 pm
We need only to look at the example of Greece to see just how bad an idea austerity is. Not only would the GOP ideology be counterproductive to the kind of growth that in turn shrinks the deficit, but their ideas have already been tried and found to actually increase the deficit. It’s funny how when they had the White House, deficits didn’t matter, but they do when the president is a Democrat.
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Shiva (Moderator)
Dec. 4th, 2012 at 4:05 pm
austerity certainly wouldn’t work, however it would do exactly what it is intended to do. It is intended to make slaves of the Greek people to the wealthy and it would make us slaves to the wealthy as well.
Unfortunately the wealthy don’t understand that without us being employed any type of long-term Wealth for them is nothing but a dream
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Basheert
Dec. 4th, 2012 at 4:48 pm
Rachel keeps everyone honest. She is WAY too smart to be in Congress .. and her influence would be attacked and diluted.
The GOP couldn’t stand to have someone as smart as her calling them out on all of their lies. It is very important that they keep lying to the American people because the only way they get what they want is by fear.
POTUS must stand firm. He was elected to do a job – not give in to GOP smears and attacks. We’ve had quite enough of their little jibs and jabs over the last 4 years thank you
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Evermore Jones
Dec. 4th, 2012 at 6:05 pm
For sure austerity never works! These repubs are history because they don’t know their history. They obviously haven’t read about the history of the Great Depression and what made it so bad in the first place. It was austerity!
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Sandra
Dec. 5th, 2012 at 1:35 pm
Deficits and debts don’t matter when the R’thugs are in control, they borrow and spend. Now they not in control, suddenly they care about the debt and the deficit, conveniently forgetting they and their Republican President racked up both thus creating the crisis. Hypocrites.
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Gary Reber
Dec. 4th, 2012 at 8:05 pm
To avoid the meltdown of the American economy, we need to reform the tax system to encourage both production and consumption. For example:
• Make dividends tax deductible at the corporate level, but fully taxable at the individual level unless used to make debt service payments on a loan used for capital acquisition.
• Treat all income the same, whether from wages, dividends, or inflation-indexed capital gains.
• Eliminate virtually all personal deductions, tax credits, and so on, but give each person an exemption large enough to meet ordinary living expenses, including education and healthcare.
• Impose a single rate tax on all income above this exemption, no exceptions.
• Allow a limited tax deferral, say up to $1 million over a lifetime, on income used to make debt service payments on dividend-paying capital assets.
We also need to change how we finance economic growth, i.e., shift from financing using past reductions in consumption (savings), to using future increases in production (earnings). Businesses can then expand by issuing new shares or other means of sharing ownership, which people could purchase by monetizing the present value of the shares they are buying, i.e., buy a share in a business on credit, and pay for it out of the future earnings attributable to the share itself.
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
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Shiva (Moderator)
Dec. 4th, 2012 at 8:14 pm
I couldnt agree more.
Income is income no matter how its derived
I would even say no deductions and lower the rate even further
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harris stein
Dec. 4th, 2012 at 8:28 pm
Middle class homeowners who own one home and live in that home and are current on their mortgage payments must be able to deduct the mortgage interest and property taxes beyond any standard deduction on their taxes.
The ultra wealthy are gaming the system when they list several homes in different family members names and then use the mortgage interest deduction to game the system. This must stop.
Also the cap on the amount of income subject to FICA and medicare tax should go up to $200,000. Right now it is $106,000. Just doing this will preserve social security and medicare for 100 years or more.
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Shiva (Moderator)
Dec. 4th, 2012 at 8:35 pm
If you consider, taking away deductions for everyone would lower the rate dramatically. I think we are trapped into thinking we must have deductions. With the wealthy and poor paying the same rate treasury income would skyrocket and we would all pay less
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harris stein
Dec. 4th, 2012 at 8:33 pm
When done correctly, tax policy can stimulate economic growth. However, robbing Peter to pay Paul, in effect taking money out of the middle class economy and giving it to the ultra wealthy to put away in bank accounts, aka austerity, doesn’t work and never will.
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Jeff
Dec. 4th, 2012 at 10:04 pm
I would also add the stipulation that investment income only be given a tax break if it is invested in this country. we need to do something to stop the shipment of our good paying jobs to third world countries before we all wind up working at wal mart or mcdonalds.
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PAULA DENMON
Dec. 5th, 2012 at 12:40 am
I believe that severely limiting deductions would kill charitable giving, and I know that a low cap on the deduction of home mortgage interest would send the real estate industry back into a tail spin. President Clinton said that it was imperative that it get back on a strong track.
I believe that raising the rates on those who earn over $250,000 is the right choice along with raising the minimum tax on investment income. Those rates just don’t need to be less than the plumber and teacher pay. I want the President to hang tough!
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Mark Benford
Dec. 5th, 2012 at 6:09 pm
Stimulus idea that would reduce taxes for companies that take advantage:
Payrolls are currently considered costs, and are deductible from revenues to determine taxable profit for companies.
Allow additional deductions for companies that increase pay of workers (or hire new workers):
Additional 20% of new or increased employee compensation amounts up to Company’s median pay.
Additional 20% of new or increased employee compensation amounts up to US median pay.
These deductions would be beyond the fact that the entire pay is currently deductible.
If you want to add a stick to the carrot, make employee compensation (including salary, bonuses, and current value of new stock and option grants) > 10x median company pay NOT deductible.
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Rita
Dec. 6th, 2012 at 8:08 pm
Rachel Maddow has more courage than 100 Glenn Becks/Limbough put together! She has FACTS, not a greasy white board or a radio show based on hate. Her demeanor has always been classy and elegant, and thankfully, she avoids the fire and doom the republicans scream about.
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