Where Deficits Are Going To Come From Next

Dave Johnson wrote earlier about the Republican origins of our current deficits, but the next wave of deficits will probably come from the next wave of option ARM mortgage defaults. (via Atrios) That'll mean decreased local government revenues, more job losses, more unemployment expenditures.

More families will have a harder time paying for college, so fewer young people will get to go. More construction jobs will be lost, so those people who didn't get to go to college will have fewer living wage jobs to apply for.

The affected families will have less money to spend on goods and services, whether through increased debt or reduced income. They'll have fewer options and, because they're poorer, their economic activity will support fewer job opportunities for other Americans.

And then when a grifter, like lobbyist Jamie Gorelick dangles a handful of jobs in a toxic industry in front of the Senate, a case can be made that those job opportunities are so important to those few, desperate, captive employees of the student loan industry that the economic health of millions of students must be sacrificed on their behalf. The defense industry pulls the same stunts, as does the coal industry.

So as Dave Johnson said earlier, once again, and with feeling, the United States needs a sensible industrial policy that's more concerned with creating new opportunities and a dynamic marketplace than it is with propping up rent seekers. Otherwise, countries that refuse to allow crony capitalists to cannibalize middle class prosperity are going to pass the US by, that's just how it goes.

Every level of the US government is going broke because the American public is going broke. The government has revenue problems because workers haven't gotten real raises in over 30 years and their households are in deficit. And now the Senate is refusing to use their power to bring back the living wage economy that underwrote the nation's prosperity for decades following WWII, though hopefully they can be convinced to reconsider.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future