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The Fiscal Myth That’s Killing The Economy, In 7 Steps


The Fiscal Myth That’s Killing The Economy, In 7 Steps

Richard Eskow

A new economic working paper reinforces an important reality: We need more government spending to repair the economy for millions of working Americans. Unfortunately, our political debate is being held back by an economic myth – one that has yet to be challenged in political debate, despite an ever-growing body of evidence against it.

The paper, by Josh Bivens of the Economic Policy Institute, is called “Why is recovery taking so long – and who’s to blame?


Austerity is a means by which a few families that own the Fed steal the value created by our labor. The solution is simple, nationalize the Fed (by which we would regain our sovereignty) and eliminate the root cause of global dysfunction: private control over money creation. http://coloradopublicbanking.blogspot.com/2013/11/7-steps-to-global-economic-and_28.html


We'll never get a political "debate" from this government...


Good to have official analysis from authoritative voices, but I could have told you that. Too much money in a few private reserves, not enough in the hands of citizens who will keep it circulating.


Whenever anybody blames "the Republican controlled Congress" they need to acknowledge why we have a Republican controlled Congress.

When the Democratic Leadership Council (DLC) was formed in 1985, they narrowed the Party's mission to GET MORE CORPORATE MONEY THAN THE GOP. Within one year Congressional Democrats teamed up with the GOP to pass 1986 income tax reform, the most regressive changes to the IRS code in history.

At that time Congress had been controlled by Democrats for more than three decades and that was viewed as an obstacle to delivering enough corporate welfare to earn more corporate money. The DLC play book called for Democrats in the White House to minimize Democratic Party control of Congress by pushing GOP legislation that would assure that many Democrats did not vote in the next midterm election.

Bill Clinton rapidly pushed NAFTA through during his first year as POTUS, resulting in the many voters sitting out and Democrats losing control of Congress in 1994 for the first time in 40 years.

During his first year as POTUS Obama rapidly pushed the GOP's "healthcare reform" relabeled as the ACA, resulting in many voters sitting out and Democrats losing control of Congress in 2010.

We have a GOP controlled Congress because the Democrats need a GOP Congress to deliver for the corporations that fund the Democrats' war chest.


Yes, once the Fed is nationalized, then we switch from Federal Reserve Notes to sovereign US Dollars. Since the concentrations of massive wealth are all "fruits of the poisonous tree," there will be a filtration process for deciding who gets how many USDs in return for their FRNs. http://coloradopublicbanking.blogspot.com/2013/11/7-steps-to-global-economic-and_28.html


From the article Point 6: "There has never been a better time for the federal government to borrow money and invest in the economy. It can obtain very low interest rates, the economy would respond very well to job creation, and we urgently need to spend money on repairing and expanding our national infrastructure."

As Ellen Brown relentlessly points out, there is NO NEED for the US government to "borrow" money from the banksters. The US government can create this money in exactly the same way the banks do: Create it out of thin air, by "loaning" it to itself.

Brown makes several other pertinent points about money creation, and the impacts and beneficiaries of money creation. i'd like Richard Eskow to respond to the points Brown makes, rather than simply accept the privatized conjuring of money in "our" system.


Giving our tax revenues to politicians to play with may not be a good idea. Perhaps a better idea would be to allow each taxpayer to earmark the money they pay toward whatever they choose. I doubt many of us would choose to give it to the Pentagon.


With all due respect, Mr. Eskow, you really need to revisit George Lakoff's material on framing.

The recitation of this talking point hides something fundamental to Republicans: They LOVE spending on the military and it certainly represents a government entity:

"Republicans remain steadfast in their opposition to government spending – even for government jobs like teaching, firefighting, and emergency management."

What does support for macho cops, support for foreign wars (and the MIC), and support for the NRA all hold in common? Answer--They are hyper-masculine collective expressions of Yang. And one could make a good case that Republicans are, identify with, and occupy the Yang side of the nation.

That arguably would make Democrats more Yin; and it's Yin to consider the needs of others. That means social programs, investments in education, Head Start, clean energy, restorative justice, and the arts.

Republicans are very uncomfortable with these more Yin expressions and resonant investments.

I've spoken often about the ways that the balance (implicit to this key dyad) is off and what it means to U.S. society and the world, at large.

When pundits leave out what Republicans are very EAGER to invest in (prisons, war, policing forces, border control, TSA, and so many control programs of law enforcement) they unwittingly omit the other side of the argument and thereby reinforce the Republicans' own frame.

It's a worthless (and inaccurate, from an analytical standpoint) strategy.


I agree with your comment except that it hardly goes far enough.

The REASON for the "Democratic war chest" is tied in with the fruits of all the deregulation that Reagan's anti-govt. rants (along with those of Maggie Thatcher) produced added to the outcomes of Clinton's own ridiculous policies. One of them involved the forfeiture of The Peoples' Media.

Media deregulation allotted the public's airwaves to 5 major broadcast behemoths and they could charge phenomenal amounts for advertisements along with the "face time" any politician required to amass a major following.

Thus the costs of everything from TV ads to real estate (whether purchased or rented) began to escalate. Naturally, that forced candidates to raise huge sums.

Before I moved to Key West in l986, I heard stories of the great real estate deals that the earlier arrivals enjoyed. Small townhouses (which were really 4 cheaply made attached units) sold for about $45,000. Within 8 years the price doubled.

As computers began to create a matrix of real estate data, I noticed that just about anywhere in the nation, rent prices began to exponentially increase. This took place in the l980s and l990s.

Similarly, as entities like the Koch Brothers and Pete Petersen built up political clout and took aim at defunding academia (along with public schools), these educational institutions were forced to take on endowments. That, in turn, made them beholden to their corporate sponsors in a manner that runs parallel to the way political operators become beholden to their campaign donors.

When you make the case for the DLC becoming a money laundering political entity ... it's true but it doesn't explain WHY. And without showing cause, the argument only works to present the fiction that Democrats exhibit moral decay.

I've watched that argument get propped up HERE all the time and it gives the Republicans a free pass. Beyond the horse race level of discourse (or analysis) is the reason why Big Money has taken hold of both parties.

It's ESSENTIAL to explain that!


The neoliberal push to change all public programs and assests to private is another party of the austerity. Changing public service programs and assets to private changes the bottom line from service to profit and you have to ask yourself who loses in that change.


Richard Eskow: "This is the economic debate this country needs. But we won’t get it
until someone challenges austerity economics and the conservative
philosophy behind it – directly, unambiguously and fearlessly."

Oh, you mean like Bernie Sanders? And where were you and the rest of the mainstream media when Senator Sanders was preaching this kind of message for the last year or so? Funny it didn't get any mention in the news then.


Krugman plans didn't go far enough in early 2009 and Obama kicked him to the curb for even suggesting $2 Trillion in various stimulus packages. Now, it's Clintonistas who'll curb him once his support is not necessary. We need $ 5-7 Trillion in repairs and upgrades to this country, in 2016, to increase productivity and lots of other beneficial and healthy things. But, the Uniparty is owned by Economic Leeches and War Pigs. And, that's the hold up. And, it really is a criminal-like holdup. With the police state in cahoots with the leeches and pigs. Vote for Stein and send the leeches and pigs to jail for the armed robbery of the 99s and this country. The crime scenes are everywhere, so quit averting your eyes.