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Photograph Source: Jay Tamboli – CC BY 2.0

The news sure makes it sound like President Biden and Republicans have been haggling over the national debt. But that’s not what’s really happening — not at all.

President Biden wants to spend more money and run up the deficit, the story goes. Republican House Speaker Kevin McCarthy wants to rein the Democrats’ “addiction to spending” and reduce the debt.

This is wrong — enormously so — for several reasons.

She’s right!

Republican tax cuts for the rich have been the single largest driver of the federal deficit over the last two decades. The Bush and Trump tax cuts together are responsible for 57 percent of the increase in our ratio of debt to GDP, the Center for American Progress found — and 90 percent outside of emergency spending during the recession and pandemic.

The other major driver of debt? Unfunded wars and military spending.

So Republicans rejected a budget proposal that would bring down the deficit. And they rejected addressing either the high-end tax cuts or out of control military spending that drives the debt — in fact, they’re pushing for more debt in both categories.

What does that leave? The barely one-third of discretionary spending that covers education, corporate regulation, scientific research, many anti-poverty programs, and other worthwhile items.

And unless they get those cuts, they’ve threatened to default on America’s debt by refusing to raise the debt ceiling.

The debt ceiling doesn’t reduce the debt by one dime — it only determines whether we pay the debts we already owe. Republicans raised it three times under Trump without complaint even as he ran up one of the biggest deficits in history.

Defaulting would do nothing about the debt — but it would destroy millions of jobs, wipe out trillions of household wealth, and send interest rates skyrocketing for home, car, and credit card loans.

The current debate has nothing at all to do with debt. It’s about whether we invest in programs the American people count on — or if we kneecap those programs to fund more tax cuts for rich people and handouts to military contractors.

Let’s choose wisely.


This content originally appeared on CounterPunch.org and was authored by Peter Certo.

Citations

[1] Deed - Attribution 2.0 Generic - Creative Commons ➤ https://creativecommons.org/licenses/by/2.0/[2] McCarthy says Democrats 'addicted to spending' | Just The News ➤ https://justthenews.com/videos/mccarthy-says-democrats-addicted-spending[3]https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/[4] Donald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years — ProPublica ➤ https://www.propublica.org/article/national-debt-trump[5] White House warns debt default could wipe out 8 million jobs, plunge stock market | CNN Business ➤ https://www.cnn.com/2023/05/03/economy/white-house-debt-default/index.html