It’s been a while since Americans felt like their lives might just get better. Maybe it takes hitting bottom after four years of an hideous freakshow and a global pandemic, but it appears that people are starting to believe things are finally looking up:
President Joe Biden completes his first hundred days in office with a country that is more optimistic about the coming year, according to a new ABC News/Ipsos poll.
The last time the country came close to that level of optimism about the coming year was in December 2006, when 61% said they were optimistic about where the country was headed, according to previous ABC News/Washington Post polls. Shortly before the 2016 election catapulted Donald Trump to the Oval Office, only 42% of Americans were optimistic about the future, compared to 52% who were pessimistic.
I’m still shocked that 42% of the country felt optimistic after Orange Julius Caesar eked out his win in 2016. I don’t think I’m over my deep depression about that even now. It was as traumatizing as the pandemic for me.
Anyway:
Only a slim majority (52%) think the federal government should spend to revitalize the economy, even if it raises taxes — including 80% of Democrats and 54% of independents. The question of government spending and taxes largely divides Americans, with 47% saying taxes should stay at the same level, even at the expense of the economy — including 78% of Republicans.
They don’t want to raise taxes? Ok. Let’s just spend the money and put it directly into the hands of the American middle class, working class and the poor. Income inequality is a horrific and growing problem that has to be dealt with if we want a decent society. But if raising taxes adds up to trashing the whole program, it’s better to table it for now and get the economy growing. Politically, taxes are an abstraction — money, jobs, purchasing power, opportunities are not abstract. If the Democrats want to maintain power (which means stopping the neo-fascist right) they have to deliver to voters directly.
I’ll let the Nobel Prize wining economist explain why debt isn’t the issue:
Today’s broadcast, “Who’s afraid of the big bad debt?”, going up shortly. Let me share a couple of slides that may also be relevant to today’s column 1/
First, when people ask how we’ll pay back the debt incurred as we respond to Covid-19, or suggest that debt over 100 percent of GDP would be disastrous, consider the history of the UK in the mid-20th century 2/
Britain emerged from World War II with debt of more than 250 percent of GDP. It didn’t have a debt crisis. And it never paid off that debt, just rolled it over. However, debt as a share of GDP eroded as the economy grew. 3/
CBO currently projects debt by the end of next year of 108 percent of GDP. How hard would that be to deal with? Bear in mind that interest rates have consistently been below the economy’s growth rate, so that with primary (non-interest) balance, the debt ratio would fall 4/
Two scenarios: primary balance, and a primary deficit of 2% of GDP, which is roughly where we were before the 2017 tax cut. In both cases I assume interest rate 1% below growth rate. Deficit scenario would lead to gradually rising debt ratio 5/
But the operative word is “gradually”: even by the year 2050 the US debt ratio would be lower than that in Britain for much of the 20th century. The point is that we shouldn’t panic about debt; we have lots of running room, and won’t need extreme measures to contain it 6/
Originally tweeted by Paul Krugman (@paulkrugman) on May 21, 2020.
Still getting anxious mail from people who worry about how America will pay down its debt. Folks, we don’t have to pay it down. Here’s what happened after WWII: 1/
America never repaid its war debt. It just issued new debt as the old debt came due. But because of inflation and growth, debt as a share of GDP declined steadily, so that by the 60s the war debt was negligible in economic terms 2/
Today, we have an economy where dollar GDP can be expected to grow 3-4% a year, while the feds can borrow at ~1%. This means that debt tends to melt away as a share of GDP unless we run really huge deficits 3/
The usual suspects try to shout down this arithmetic by playing Dr. Evil: We have 24 TRILLION DOLLARS in debt. But if you analyze the numbers instead of hyping them, there isn’t any visible problem 4/
Originally tweeted by Paul Krugman (@paulkrugman) on January 19, 2021.
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