It's Not Whether to Address the National Debt, but How

By Kevin Smith - Sunday, July 11, 2010
On the Thursday before last, I watched the Senate vote on an extension of unemployment benefits for people who are struggling to find jobs in the great recession.
I watched because I have a rooting interest in this issue, because I think that extending the benefits is the right thing to do, and because I’m close to people who are much more invested in the outcome. The measure failed, as it had several times before. This time it missed by just two votes, 58-38.
What that means is that 200,000 Americans a week will be losing their benefits. Two hundred thousand sons and daughters, mothers and fathers, grandmothers and grandfathers like me — hard-working people who lost their livelihoods in the wake of a financial crisis that was not of their making — will soon be running out of the resources to take care of their families.
Minutes after the votes were counted, Senate Minority Leader Mitch McConnell blamed Democrats for its failure, saying that his party wants to extend the benefits but is unwilling to spend the $39 billion that it would take to extend them until November. Instead, Republicans proposed to extend unemployment benefits for another month using stimulus money — money for saving and creating jobs.
McConnell, who was more like a butterfly while the previous president doubled the national debt, has morphed into a deficit hawk, as have all his Republican colleagues in Congress.
That’s not a bad thing. We should be concerned with our spiraling debt. We stand to be the first generation of Americans to leave our children and grandchildren a country in worse shape than the one we inherited. It would be irresponsible not to consider the deficit with every measure that comes before Congress. The question is not whether to address the deficit but how to address it.
Republicans are servicing our debt on the backs of people most at risk, working-class families and people out of work. They’ve used the deficit as cover to block unemployment benefits, a jobs bill and a second stimulus.
That’s especially troubling because we need jobs, and a lot of that stimulus money has gone to states to prevent layoffs. In the absence of a second stimulus, cash-strapped states are cutting funds for education. In the reality of a global economy, Republicans are trying to balance our budgets by making our children and our workers less competitive.
Their solution, their one trick, is to cut taxes. By their reckoning, you can never raise taxes because raising taxes kills jobs and the only way to create jobs is to cut taxes. My Republican friends are confusing cheap with patriotic. The fact is that our federal income tax rates right now are pretty low.
Through most of the 1990s, when we saw unprecedented economic expansion, the top marginal income tax rates were about four points higher than they are now. From 1947 to 1973, the top marginal tax rate ranged from 70 percent to 91 percent. Over those 25 years, the income of middle-class Americans nearly doubled while the incomes of upper-class Americans rose by 85 percent.
If cutting taxes is all there is to creating jobs and wealth, then at today’s 35 percent we shouldn’t be able to print money fast enough.
Instead, we’re mired in a recession. Recent estimates have real unemployment, those seeking jobs and those who have given up, at somewhere between 16.5 percent and 21.5 percent. As invested as the GOP is in making you believe otherwise, we can’t cut our way out of our problems. We have to grow. We have to invest in jobs, in education and continuing education that will keep us competitive in an evolving economy.
We must be ever vigilant on costs and waste, but we must be fair and forthright. We cannot spare our successors the rotten fruit of our excesses by writing off the poor and the unemployed.