Deficits We Should Really Be Talking About

A sense of hope I felt in 2009 while writing the 2010 Hunger Report, A Just and Sustainable Recovery, is gone now.  I hope it will be temporary. 

It’s the tax cuts. This is a raw deal and threatens to undermine any hope we all may share about a sustainable recovery.

Back in 2009, I believed that the government was going to make the necessary investments to put the country back on track to achieve a more broadly shared prosperity. Those are investments in the physical infrastructure, health care reform, low-carbon energy and, most important of all, education and workforce development:  building the nation’s human capital.

It was clear there would be opposition, but the mood in the country, I thought, had pivoted to a more sustainable view about the kind of future most of us wanted. The excesses of the financial sector and the wide-scale revulsion to them were proof positive that the policies that concentrated the country’s wealth in a decreasing share of the population had to end. 

The tax cuts, of which most will be divided among the wealthiest Americans, will add $900 billion to the deficit. Deficit hawks in Congress, hypocrites for the most part, will surely rail against the size of the federal deficit before long.  Cuts in military spending will be off the table. That leaves other discretionary spending, such as for education, energy, and infrastructure.

President Obama, speaking at a North Carolina vocational school on Monday, the same day he announced the tax deal with Congress, instructed listeners, "In the race for the future, America is in danger of falling behind."

Indeed. The United States has gone from 1st to 9th place among nations in the percentage of its population that graduates from college, and it now ranks 24th in the portion of children who have a high school degree. The main reason the U.S. economy was so dominant for much of the Twentieth Century is because U.S. workers on the whole were so much better educated than other workers across the world.  Here is a graphic that illustrates the educational advantage that U.S. workers held.

 
In North Carolina, the president also said, “The most competitive race is between America and our competitors around the world.... We can win the competition."

The tax deal won’t make that easier.