If you listened to President Obama for the past week, you would think this country was about to implode if we did not 'come to a deal' of sorts with House Republicans. And like the weakling he has been from day one of his presidency, by compromise, of course, he means doing what the Republicans want him to do (be it caving in on shutting down GITMO, civilian trials for terrorist suspects, redoing the Patriot Act to eliminate its civil liberties violations, the public option in health care, support for gay marriage, and now budget cuts of the very programs given to us by the president's party). And what did the House Republicans like John Boehner want? Naturally, to gut social spending and keep Bush's tax cuts for upper income earners. And what did Obama give them? Deep social spending cuts and a continuation of Bush's tax cuts for upper income earners.
And how poignant that we allow Standard and Poor's and Moody's to sit in judgment of the US government, threatening to give us junk bond rating status if a 'deal' was not reached. These were the same crediting agencies who gave AIG, Bear Sterns, and Greece AAA ratings. And instead of being fitted for orange jumpsuits and a life behind bars, we continue to allow the very entities who destroyed our economy and way of life, along with giving them our tax money (under the guise of being too big to fail), to compel us to reduce a debt that is of no consequence to our economic well being.
Why would I write such a heretical thing about our capitalist system? Because from the very start of this country's existence, we have run a huge national debt. The only time in American history we consistently balanced our budgets, year after year, was in the 1830s, which presaged several economic collapses in subsequent years. At the time the US was founded, our debts then were greater (as a percentage of our GDP) than they are today. And the response of then-Secretary of Treasury Alexander Hamilton was to encourage the creation of a national bank (subsidized with tax increases), so to fully fund the debts of our states, exclaiming that our national debt was a blessing to the US. Much like the free trade orthodoxy that pollutes almost every business and economics department of our universities, when in fact the US developed into an industrial superpower as a protectionist state well into the middle part of the 20th century, likewise, the US has never been a nation predicated on balancing its budgets (but was created and has funded itself on debt from the start of our history).
Indeed, during our greatest economic booms, like WWII, we ran annual deficits as a percentage of GDP more than twice as high as we do today. The dollar did not die, our economy did not leave us. We had full employment with federal government expenditures as a percentage of GDP around 45% (today, the media and its lackeys in Congress would have you believe we need to 'cap' that spending at 18% or risk doom).
How could it be that this entire debate is overblown and manufactured? Does it not matter at all that we have $14 trillion of national debt? No, it does not. We are no longer a poor nation of farmers, as we were over two centuries ago. Our GDP is over $14 trillion. Moreover, the debt ceiling is wholly unnecessary to the debt 'crisis', and its existence is emblematic at how it has become what it is at this hour. The only thing that really matters to the US government, other than the value of the dollar, is that we can meet the interest payments on our debt. So long as we can pay the interest, the rest of the debt is of no significance. No one will be collecting, no future generations paying, anymore than the grandchildren of Alexander Hamilton did after he drastically increased our debt burdens to the highest levels in our existence. And that is the sham of the debt ceiling debate. From the beginning, it was something that was contrived, so to use as a trojan horse to give Congress and the White House what they really wanted--cuts in federal spending (and not to corporations).
The most fraudulent of Obama's claims (and the Republicans he is flacking for) is the supposed need to 'reform' Social Security. You will never hear this on Fox 'news' or anything owned by Rupert Murdoch, and probably not even CNN at this point, but Social Security has a $22 trillion surplus. That is right, Social Security has a greater surplus than our entire national debt (157% more, to be precise). So, what is needed but to cut it! It is that same neo-liberal mentality in corporate America that gives us a business community that has since 2009 collected and sat on over $2 trillion, making record profits while refusing to use those reserves to expand or hire (thereby extending our recession). We, the people, the live ones, not the preborn or those with the word incorporated or ascription of millionaire at the end of their names, need more financial discipline, to have our money that we paid into these programs taken from us so that millionaires can continue to get a tax cut. Regardless of how Obama likes to call it, that is what he is doing.
From the start of this debate, the House Republicans controlled and dictated the terms of the agreement. The only real quandary that occurred was within the House Republican caucus, between the teabaggers and House Republican leaders who wanted to 'compromise' by cutting 'only' $2.4 trillion, as opposed to $4 trillion. The Senate Democrats, never mind the House Democrats, have never been a part of the debate or negotiation process with the president (that is, until the last minute for the Senate Democrats). Obama handed to his opponents the terms, accepted whatever agreement they generally came to, and then called it a compromise. If this is compromise, schoolyard bullies everywhere should rejoice. They have just been renamed peacemakers.
Why in the world would anyone support or vote for this? I guarantee you that is a question no one will be asking in the mainstream news. If you have been paying attention to what happened to The Young Turks host Cenk Uygur at MSNBC, and how he was strong-armed from the supposedly left-wing channel for being 'too critical' of the administration, you probably have a good idea as to how this proposal is going to be portrayed in the news media (i.e., like a 'grand compromise' that staves off certain financial collapse).
And to anyone who lives the illusion that this was not driven by the Republicans, and that Obama might not have caved in to the GOP, take this line from a CNN article, on one of the stipulations of the deal:
Obama would be able to request only up to $1.2 trillion in additional debt ceiling if the special congressional committee fails to agree to at least $1.2 trillion in cuts.
In other words, the debt ceiling will not go up until the POTUS goes to Congress and allows them to decide on another trillion in spending cuts. For all intents and purposes, Barack Obama has made himself a hostage of the Republican leaders in the House of Representatives. Remember those Bush tax cuts he campaigned against? He extended them last year, is continuing to support them now, and will not take the issue up again until 2012 (right before the election). Is there anyone reading this willing to bet me that Barack Obama will manifest within himself the gumption to take on this issue in 2012 and repeal those tax cuts? I think you already know the answer, but if any of you are willing to bet me, you are welcome to name the wage because I am more certain of President Obama's continued avoidance and oblique support of those tax cuts than I am of myself still breathing this time a year from now.
Eventually, those of us on the real left (who still bother with electoral politics) must become more openly critical of what is happening. It is not that I think it will matter ultimately, as Barack Obama seems bereft to take a stance on whether water is wet anymore (without fear of someone calling him an Islamic socialist), but if nothing else we must make our voices heard. The teabaggers will feign outrage at not being able to decapitate our government and turn this country into a 19th century mine shaft filled with child laborers and only property owners voting, but the sad truth is this proposal gives the GOP everything it wants with absolutely nothing in return (unless you count saving dollars off the backs of the poor and elderly an accomplishment).
And to think, according to the freepers and denizens at redstate.com, this is what socialism is supposed to look like. It is at times like this I think back to the quote from Gore Vidal that the US has one political party with two right-wings.