Well, there they go again. Less than a week after its chief economist apologized for wrongly imposing austerity on European nations – hey, sorry about that, unemployed millions! – the International Monetary Fund is misleading another country into the miasma of austerity economics: ours.
The IMF released a report that rates nations on their “profligacy” and places the United States at or near the top. Among other things, this demonstrates that their grasp of language rivals their grasp of economics.
To be “profligate” means that you’re “wildly extravagant” and “completely given up to dissipation and licentiousness.” Synonyms for “profligate” include “debauched,” “degenerate,” “depraved,” “dissipated,” “dissolute,” “iniquitous,” “lax,” “lewd,” “libertine,” “licentious,” “loose,” “promiscuous,” “reprobate,” “shameless,” “unprincipled,” “vicious,” “vitiated,” “wanton,” “wicked,” “and “wild.”
I don’t think they’re suggesting that the halls of Washington rival Caligula’s court. Nobody’s marrying their sister, opening a brothel, or installing a horse in the Senate. (Although, to be fair, it couldn’t do much worse than the current minority.)
The Real Debauch
The far right (which is to say, all of the American right) will love this idea, of course. It plays into all their worst prejudices. But is the United States government really on a wild spending spree?
Poverty’s at record levels and so is unemployment. The truth is, we don’t have a spending problem at all. Then what is our problem? This is: We’re coddling corporations and indulging the wealthy.
Repeating the IMF’s poorly-chosen label is like calling Mom and Dad “profligate” for trying to feed Grandma after their billionaire nephew stole the car, the home and the bank accounts.
We’ve got the charts to prove it.
The IMF report calls us “profligate” because of the imbalance between the amount of money our government collects and the amount it spends. But, as Howard Schneider notes in The Washington Post, Denmark offers much better social benefits than the U.S. and isn’t called “profligate” because it collects the revenues to pay for it.
Still, the term’s a loaded one and shouldn’t have been used. It won’t lead to a serious debate about tax revenues in this country, and we’re certainly not having one now. We’re fixated on spending, and the revenue side of the discussion has been narrowed so radically that the only debate going on in Washington is over which six-figure incomes will be taxed at a historically low rate of 39.5 percent.
Let’s go to the charts. First up:
1. We spend very little on government in this country.
And remember, we spent a trillion dollars on the wars in Iraq and Afghanistan during this period, along with a lot of other unnecessary military spending. (The Pentagon takes roughly one-fifth of the government’s budget.)
2. Government spending went up after Wall Street crashed the economy, because it had to. (Revenues went down, too.)
(via Business Insider)
3. But taxes in this country are actually low …
Source: Center for American Progress
4. … especially for the well-to-do, who are paying historically low rates …
5. … and especially for the really rich, who are paying much less than in the past (even at the new tax rates) …
6. … while also reaping most of the benefits of our so-called ‘recovery’ …
7. … as everybody else loses out.
8. We don’t have our jobs back.
Courtesy Bill McBride, Calculated Risk
9. To make matters worse, governments (federal, state and local) are cutting jobs rather than adding them – and our deficit debate is about how many more to cut.
(via New York Times)
And as you can see, the jobs we are getting are going to the financial and professional classes, or to low-paying types of employment.
10. There’s a relationship between unemployment and deficits …
(courtesy Business Insider)
… and yet the so-called ‘deficit hawks’ are ignoring unemployment and cynically hawking even lower corporate tax rates. Nobody’s calling them on it, even though ….
11. … the corporate taxes we collect now (as opposed to the pre-loophole ‘statutory tax rates) are extremely low.
12. They’re also targeting Social Security benefits, which don’t contribute to the deficit and are already lower than most developed countries’ …
13. … while ignoring the trade deficit, which spiked in Friday’s report.
And yet they’re treated like serious commentators, rather than cynical corporate hacks, by most (if not all) of the mainstream media.
14. They’re successfully distracting us from our real problems.
The Federal deficit is getting much greater coverage than any other topic. It received nearly twice as much coverage as the trade deficit, even though the trade figures that were released showed a surprising setback for the United States that means more unemployment and less growth. The “deficit” topic got more than twice the coverage unemployment received, and nearly three times as much coverage as “long-term unemployment.”
“Wealth inequity” and “wage stagnation,” which are destroying the American middle class, didn’t even make the grade.
At this rate, only concerted action can stop the trend toward more of the same austerity madness that has wounded Europe, and us, thanks to the misguided guidance we keep receiving from institutions like the IMF. The organization will no doubt “apologize” for this absurd report someday too – long after the damage has been done.