Arianna Huffington Downplays Federal Budget Deficit

In her 04/07/13 “Sunday Roundup”, Arianna Huffington states the following:

On Tuesday, President Obama announced a federal effort to map the human brain in unprecedented detail. With any luck, it might help explain the kind of loopy thinking we saw demonstrated at the end of the week. On the one hand, we had the latest jobs report, which showed a country still in crisis, with the addition of only 88,000 new jobs, and the share of the population in the workforce falling to the lowest point in decades. Yet the leaked details of the president’s new budget show a focus not on job creation but on cutting the deficit by $1.8 trillion over the next 10 years (in addition to cutting Social Security benefits). So amidst hard evidence of our profound and continuing economic crisis, we get a budget offering a solution to a different (and far less pressing) problem. It’s enough to set what Obama called “the three pounds of matter that sits between our ears” spinning.

So, how does eliminating the budget deficit prevent the creation of jobs? Ms. Huffington doesn’t say. However, she appears not to notice how the existence of a budget deficit might hinder job creation.

American companies are reluctant to hire new workers if those companies anticipate a tax increase on the part of the federal government, and (to the best of my knowledge) Democrat lawmakers have suggested an increase in taxes in order to reduce or eliminate a budget deficit. As long as a budget deficit hangs over the heads of lawmakers like the Sword of Damocles, the possibility of a federal tax increase remains.

 

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