Cutting deficits and the national debt will create jobs.
This is the most fashionable load of bull excrement being sold by Teapublicans. But nothing could be further from the truth.
Certainly, the debt has a chilling effect on the long-term prospects of our economy. But the debt does not constitute a crisis. In fact, the total debt equals roughly one year of the US GDP. To relate that to a familys finances (as Teapublicans are so fond of doing), its akin to a family earning $100,000 per year holding a $100,000 mortgage.
Now lets look at what severe cuts to our deficit and debt will do to our economy in the short term.
When the government cuts spending it cuts the budgets of government agencies. That forces those agencies to lay off many of their employees. So, inevitably, there’s a net loss of jobs. Further, the decrease in employees results in less oversight of banks, food and drugs, Medicare payments, etc. – all of which make our economy and taxpayers less safe.
Moreover, government cuts can have a negative effect on private companies that act as vendors to those agencies. For example, large cuts to the Department of Defense will cause the DOD to suspend weapons acquisition and development. That means defense contractors will have to make dramatic cuts to their payroll.
Part of the reason for our jobless recovery from Bushs Great Recession is that state and local governments are experiencing a loss of revenue from taxpayers. As a result, those governments have been laying off workers even faster than private companies can hire them.
So, in the short term, what do you expect a $1 trillion cut to our deficit will do to our economy? Obviously, it will cost tens of thousands of people their jobs. Maybe yours!