So here's an animated cartoon that at least gets the gist of the story right--the GOP tea-partiers in Congress are trying to hold the US economy hostage with the debt ceiling decision. The minority party says that if the country doesn't do what it wants, it will not support a debt ceiling increase.
http://www.nma.tv/obama-faces-gop-debt-ceiling/
What does the GOP want? Let's consider the list.
1. No tax increases, even for the wealthiest Americans who are getting more than ever but paying less in taxes.
This is a class warfare position. The House GOP argues that increasing taxes on private equity and hedge fund managers, for example, would harm the economy because the tea partiers treat these elite classes as the only true entrepreneurs. The people who are being protected are the carried interest elite who get their compensation as mostly capital gains and often deferred, through a gambit of treating a profits interest in a partnership as though it were an investment of their own money even though it is not after tax dollars; the wealthy families who own most of the financial assets of the country; the wealthy families whose estate taxes have been reduced to a dribble by the Bush tax cuts and the new temporary estate tax 'compromise' enacted under the same type of economic terrorism; and the corporate managers who benefit from the many corporate loopholes so that most corporations pay almost no taxes and those that do pay taxes well below the statutory corporate rate.
This is class warfare because the US is a tax haven for the wealthy who can often 'monetize' their financial assets to provide money to live on without actually selling them, thus paying no taxes and passing the assets to their heirs with almost no taxes then either under the new estate tax. Meanwhile the middle class pays substantial income and payroll taxes and sales taxes.
The wealthy can well afford to pay more in taxes. The wealthy should pay more in taxes, because taxes represent one of the few ways that we can help reduce the huge inequality that has boomed under the four decades of reaganomics. Vast inequality of income such as we have in this country today creates social strife and balkanizes the population because the 'haves and have-mores' don't give a damn about the have-lesses.
2. Substantial spending reductions--even in programs that actually bring money into the Treasury by holding tax cheats and securities cheats accountable.
Consider, for example, the House-passed bill's REDUCTION of funding for SEC enforcement. Note that the SEC enforcement office isn't paid for by tax dollars. It is paid for out of penalties, fines, assessments, etc. But the budget sets the limit on the amount of money that can be collected. So the GOP House just voted a $135 million subsidy to the big banks that are guilty of getting us into this mess in the first place. See the article today in the New York Times.
Enforcement at Treasury is a great investment for taxpayer dollars. With adequate tax enforcement, we have a fairer system that is less able to be gamed by the wealthy and sophisticated, meaning that ordinary taxpayers are not as likely to bear the burden of their own taxes AND the tax cheats' unpaid tax burden. But the GOP isn't interested in funding the IRS at all. Remember that this House GOP is dominated by government haters who think private companies can do everything better than government. That's absurd, of course. It has never been the situation in our history, since we have always involved government in various ways in making the kinds of systemic infrastructure that supports business. We have learned over time that private actors charged with self-regulation do not regulate--they rip off. That is apparently the kind of universe that the House GOP tea partiers want.
3. Spending cuts that are set without regard to programming needs but in terms of an arbitrary figure as a percentage of GDP.
What's even worse than the fact that the Republicans are (i) playing economic terrorism with the debt ceiling, (ii) refusing to consider any revenue increases -- after themselves being responsible for the revenue shortfalls that began in 2001 with the passage of Bush's 2001 $1.3 trillion tax cut package and continued with each additional tax cut especially the 2003 package and the 2004 corporate wish-list package, and (iii) insisting on ridiculous spending cuts that don't even save taxpayer money?
How about the idea of deciding how much you are going to borrow and/or tax based on a phony notion of how well the economy is doing, and without thinking about what the essentials are that you need to cover? That is what the tea partiers are up to when they say that spending or borrowing should be no more than some arbitrary percentage of GDP.
The right-wing as a group tends to like absolutes--they treat government as the problem, not the way that democracies give people a voice in the solution to problems that they cannot resolve by themselves; they want all wealthy people's income to be tax free--that is what zero capital gains taxation means, of course; they want all corporations to be able to shift resources wherever without any repercussions, speculate at will, and then be rescued by the federal government if they get into trouble (that is what the GOP really means by 'free market'--freedom of those that have to rape and exploit for profit, with the knowledge that ultimately there will be a soft landing provided by the very system that they have defiled); they want the entire nation to adhere to the set of moral rules that they have adopted for themselves, in their fundamentalist mixture of constitutional revisionism, seizing of the government for promulgation of their evangelical brand of christianity, and their dogmatic refusal to look at economic reality because of their clinging to a utopian, 'free market' notion that allowing brute capitalism to operate without protections for ordinary people enhances rather than destroys individual liberty.
So these absolute-thinking ostriches who disregard the failures of the Friedman 'free market' ideology want to impose an austerity program on the poor and the elderly and those in the middle class who dare to support unions and think that they are entitled to the pension benefits that they have already earned (especially those that they bargained for and took lesser wages in order to secure).
The austerity program they are interested in is one that will have short-term benefits for the elite class the GOP represents in this class warfare. They want to cut Social Security, so that there will not be a demand to have the wealthy contribute more to the program . They want to cut Medicare, so that they can push all Americans into privately run health insurance--the system that we already have and one that has failed utterly to provide decent health care to all or reasonably priced health care to anyone. They want to cut Medicaid, so they can shove aside the poor and vulnerable and blame their inability to afford health care on their 'irresponsibility'.
4. A continuation of the misinformation and propaganda campaign that has misled the American public about debt, deficits, monetary systems, spending and taxes.
You'll note that the rhetoric advanced by the right often compares the US government to a family. It suggests that borrowing to make ends meet is irresponsible, and therefore the only solution is to quit 'cold turkey'--to have the US cut spending drastically, no matter the consequences.
That is a false analogy and a false cure.
It is a false analogy because the US government is a sovereign that has its own monetary system. Families and local governments and states cannot adjust the supply of money to suit the economic needs. Families can only earn more to have more. States, of course, can tax more, but the tea partiers--aided by the Koch Brothers and all of the well-funded propaganda tanks on the right like the Cato Institute, the Heritage Foundation, the American Enterprise institute, Grover Norquist's ill-named "americans for tax reform', etc.--have been able to mislead most Americans into thinking that taxes kill jobs or that Americans are terribly overtaxed and there are few politicians with the decency and courage to vote for the tax increases they know is necessary.
Folks, the US is a tax haven. We pay way too little in taxes. That's why our bridges are falling, our highways are full of potholes, our health care is inferior to, yet more expensive than, most of the developed world's, and our infrastructure basically is stagnating like the middle class itself. We should be building super-fast trains to connect the country and connect within cities. We should be creating a stellar publicly provided, free, wireless communcation network. We should be spending more money on schools, to ensure that our children enter their adulthood prepared for a better life. Instead, we are letting roads crumble. Instead, we are privatizing our schools in order to let profit-makers make profits off of teaching the best students while breaking unions and thus making even higher profits, and while leaving the poorest students in the public schools. Instead, we are continuing with a patchwork health care system that doesn't put the public in the center by recognizing that access to decent health care throughout life is an inalienable human right that government should foster.
It is a false cure, because the 'free market' ideology pushed by Hayek and Friedman and the rest of the Chicago (and Austrian) school is based on false assumptions about society. The version of free market economics that the tea party GOPers are espousing is one that is so radically unrepresentative of the way real economies work that those tea party advocates like Michele Bachmann can actually say (apparently with a straight face) that they don't think it would matter much if the debt ceiling isn't raised and the US defaults on its debts.
That's Economic Terrorism, GOP style (meaning served with a large dose of corporatism and elitism).
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