Is it possible that much of the hype about the national debt may amount to what Alfred Hitchcock called a MacGuffin (“the empty pretext that serves to set the story in motion, but has no value in itself“)? The real story in the national debt is the bipartisan attempts, not just in Washington, but in Springfield and City Hall, to transfer the high social costs of foolish decisions made by a few financial and political elites from those very elites to the rest of society (re: pension cuts, social security cuts, medicare/medicaid cuts, etc.).
Of course, there’s nothing inherently wrong in cutting wasteful spending, even if those cuts come from staple domestic programs. However, to argue for cutting programs that are already inadequately funded on the basis of conventional claims about government profligacy and yet say nothing about the profligate government spending going directly onto the highly leveraged (i.e., debt-ridden) books of predatory financial monstrosities (i.e. too-big-to-fail banks) that pretty much caused the recession that, in part, led to the huge government deficits in the first place…Well, Michael Hudson (former Wall Street financial analyst, University of Missouri-Kansas City economics professor, author of The Bubble Beyond and Finance Capitalism and Its Discontents) explains this lunacy better than I can. Click here if the video is taking too long to load.
To reinforce Hudson’s point, here’s a handy illustration.