World Politics News   Articles for World Politics Course

The American people have been subjected to an intense campaign designed to persuade them that the Federal budget deficit represents a serious threat to the future of the country. Axios reports on the latest analysis on the subject by the Congressional Budget Office:

“The federal deficit is on track to be 5.8% of gross domestic product (GDP) in the 2023 fiscal year, before declining to 5% in 2027 — but the shrinkage will be short-lived.

• It will grow every year after before reaching 10% of GDP by 2053, per the CBO.
• From 2023 to 2053, deficits will average 7.3% of GDP — more than double their average over the past half-century.
• Federal debt held by the public will hit 98% of GDP this year, and is on track to surpass an all-time high in 2029 when it reaches 107% of GDP.”

This projection assumes that there will be no tax increases in the future and that the political sentiment in the US makes tax increases impossible. In 2021 the Gallup Organization found that:

“Gallup, over the years, has done interesting research on the “rich,” and the conclusion I keep coming back to is that Americans, in some ways, like having a rich class. The majority of Americans themselves would like to be rich someday. Further, Americans believe that having rich people in society is good for that society.

“Americans thus do not harbor the heavy resentment toward the rich that might be assumed from their agreement that income inequality should be reduced. It appears that while Americans think the rich should pay more into the tax system, Americans don’t broadly view them as evil or as of no benefit to our society. Demonizing the rich thus may not be the most advisable course of action for politicians — even as they propose to raise their taxes.”

The taxes on the poor and middle class in the US are unquestionably high (and many of those taxes, like Social Security, are deliberately regressive so that those taxes barely touch the rich). But there is an incredible pool of wealth that the Federal Government has decided to exempt from taxation. According to The Guardian:

“The world’s 722 biggest companies collectively are making more than $1tn a year (£780bn) in windfall profits on the back of soaring energy prices and rising interest rates, according to research by development charities.

“The companies made $1.08tn this way in 2021 and $1.09tn last year, according to analysis of Forbes magazine data by the charities Oxfam and ActionAid. The collective profits were 89% higher than the previous four-year average covering 2017-2020.

“Windfall profits are defined as those exceeding average profits in the previous four years by more than 10%.”

The article goes on:

“Katy Chakrabortty, Oxfam’s head of advocacy, said ‘These eye-watering excess profits are not only immoral, We are also seeing increasing evidence that a corporate bonanza is supercharging inflation, leaving millions of people in the UK and around the world struggling to pay their bills and feed their families.

“’When the windfall profits of 18 food and beverage corporations are more than twice the amount needed to cover the shortfall in life-saving assistance to tens of millions of people facing hunger in east Africa, it is clear governments need to act.

“’We need to see windfall taxes introduced across the board and an end to this racket, where rich shareholders are rewarded at the expense of everyone else.’”

We need to ignore the political tripe spouted by those who seek to avoid inconveniencing the rich. There is plenty of money to protect the poor,