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The North Wind

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The North Wind is an independent student publication serving the Northern Michigan University community. It is partially funded by the Student Activity Fee. The North Wind digital paper is published daily during the fall and winter semesters except on university holidays and during exam weeks. The North Wind Board of Directors is composed of representatives of the student body, faculty, administration and area media.

Opinion — Its okay to outgrow your college friends
Opinion — It's okay to outgrow your college friends
Megan Poe April 12, 2024

Debt ceiling debate didn’t solve the problem

Guest Column by Aaron Loudenslager

The U.S federal government raised the debt ceiling in early August, and cut the federal deficit by $1 trillion immediately, with over another $1 trillion to be cut in the next year.

A dirty secret of the recent budget deal was that most graduate students lost their federal subsidized loans. This will save our country $21 billion over 10 years, according to the Congressional Budget Office.

Now, the federal budget deficit currently stands at $14.46 trillion. A figure such as $21 billion is only a drop in the bucket compared to the current size of the federal budget deficit. Congress keeps squeezing and cutting programs for students and the poor, which make almost no difference in solving our long-term federal deficit when cut. President Obama extended the Bush-era tax cuts last December, which favor the wealthiest one percent of Americans. According to the U.S. Treasury Department, the tax cuts will cost $3.9 trillion over their 10 year existence. This is $3.9 trillion that could’ve been used to reduce the budget, but I guess the richest Americans needed even more money to survive their rough lives in luxury. There has been a lot of rhetoric from the Republican party, yet according to USA Today, 1,470 millionaires paid absolutely no income tax in 2009.

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If $3.9 trillion isn’t enough of a budget reduction plan for so-called fiscal conservatives, there is a way to reduce about another $7 trillion from the budget over the next 10 years.

Wall Street trades financial derivatives every day. Financial derivatives are financial instruments that allow investors to make speculative bets on anything from simple future contracts to more complicated financial concoctions like collateralized debt obligations and credit default swaps. These financial derivatives are estimated to be worth $700 trillion.

A simple tax on Wall Street derivatives transactions, amounting to only .1 percent, could bring in $700 billion per fiscal year in new federal revenues, and a grand total of $7 trillion over 10 years. These two proposals could reduce the federal deficit from its current level of $14.46 trillion to a new deficit of just under $3.5 trillion. Why can’t our politicians make the super-rich “share” in the sacrifice to fix our long-term federal deficit?

The answer is quite simple. Politicians need cash from rich individuals and corporations to run their political campaigns. In return, these politicians initiate policies that favor the richest people and entities in America, instead of policies that favor the people who vote for them, who are mostly middle and working class Americans.

If our politicians were deeply dependent on political contributions from the middle and lower class instead of the richest Americans, the policies they initiate would look more like my suggestions, which cut $11 trillion from the budget over 10 years, and less like the debt ceiling deal Congress passed, which cuts only a little over $2 trillion from the federal deficit.

What can the American people do to make government work for them instead of rich individuals and corporations? The American people simply must demand more from their Congress and President.
Many of the wealthy individuals in this country, besides libertarian individuals such as David and Charles Koch, have called for increases in their personal taxes. Warren Buffet, currently the third richest man in America agrees with most working class Americans that the rich haven’t “shared” in the sacrifice to fix our national budget deficit.

It is time for regular Americans to demand that Congress fix the deficit on the backs of the super-wealthy, and not on the backs of working class Americans.

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