The Rich Take The Gold And We Get The Shaft
By Ron Forthofer
05 August, 2011
Countercurrents.org
Hooray -- the media circus about the latest insanity from inside the Washington Beltway is finally over. Unfortunately, this latest and totally unnecessary political theater over the debt ceiling means that life will become harsher for most of us, particularly for those barely getting by now.
The public already has been hit by the loss of millions of jobs, millions of foreclosed homes, and trillions of dollars of lost wealth. Public services, needed more than ever now to deal with the effects of the Great Recession, are being cut due to decreased revenues at the state and local levels. The public is now being expected to sacrifice yet again as it will face additional reduced services and protections due to cuts to important federal discretionary programs. Adding insult to injury, the new bill fails to include any tax increases on the wealthy or the closing of tax loopholes that they use.
Besides targeting programs benefiting the public, this abject 'surrender' by President Obama and the Democrats on the debt ceiling deal doesn't even offer any hope of new jobs, thus dealing another blow to the suffering public and economy. Even the Financial Times editorialized on August 3rd about the lack of a short-term stimulus in the bill.
Obama admitted that the American economy "didn't need Washington to come along with a manufactured crisis." He added: "And it was something that we could have avoided entirely." Obama should know since he played a major role in allowing this situation to become a crisis.
In his July 31st column titled "The President Surrenders", liberal economist Paul Krugman wrote about Obama: "First of all, he could and should have demanded an increase in the debt ceiling back in December. When asked why he didn't, he replied that he was sure that Republicans would act responsibly. Great call.
"And even now, the Obama administration could have resorted to legal maneuvering to sidestep the debt ceiling, using any of several options. …
"At the very least, Mr. Obama could have used the possibility of a legal end run to strengthen his bargaining position. Instead, however, he ruled all such options out from the beginning."
Krugman was dismayed at Obama's ineptness in handling this issue, and he characterized the outcome as a 'catastrophe'. Instead of strengthening the economy, Krugman viewed Obama's surrender as probably making our long-run deficit problem worse, not better.
However, others are not so kind, or perhaps as naïve, as Krugman. On August 1st Mike Whitney and on August 2nd Andrew Levine (both at counterpunch.org) questioned the idea that Obama surrendered. Instead they believe that Obama, the 2008 Wall Street choice, got the deal he and Wall Street wanted.
According to the White House website, this deal includes 'responsible entitlement and tax reform' in the second deficit reduction phase. This statement should be serve as a strong warning to defenders of Social Security and Medicare. Supporters of these two vitally important insurance programs must immediately mobilize and mount another campaign to protect them. We must let Congress know that these programs should not be cut; instead, these programs, as well as Medicaid, need to be strengthened.
For a rational alternative to this inside the Washington Beltway insanity, check out the People's Budget at http://cpc.grijalva.house.gov/index.cfm?sectionid=70. This sensible plan would protect the public interest and create jobs while eliminating the budget deficit in ten years. The plan is not perfect, but it clearly demonstrates how revenue can be raised, not on the backs of the hard working public but, among several steps, by revising the tax code and by enacting a financial speculation tax on derivatives and foreign exchange.
Perhaps pressure from the public can still force the politicians to serve the public interest and to save the nation from the oligarchs.
Ron Forthofer, Ph.D. is retired Professor of Biostatistics at the University of Texas School of Public Health, Houston, Texas; former Green Party candidate for Congress and for Governor of Colorado [email protected]
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