Like their crazy willingness to cause a new financial meltdown by refusing to extend the debt limit – which they did repeatedly under George Bush- the Congressional Republicans now propose a balanced budget amendment to the constitution as a part of the deficit “deal”.
They claim it would be positive based on the reality that most states have such laws. Well now lets see. In 2007/2009 when finance capital looted the economy, the U.S. government bailed out the banks and prevented a second great recession. The U.S. government used deficit financing to keep 100,000 teachers in classrooms and over 25,000 police on the streets. They did this by deficit financing. That is, they did not balance the budget. If they had balanced the budget we would have had a second Great Depression.
( Recall that they created the conditions for the great finance robbery by their prior fantasy that finance capital would regulate itself in a free market and we did not need a Glass-Steagal law any longer.)
Republicans are holding the country hostage by refusing to raise the debt ceiling; they will only do so if the federal government caps domestic spending at a fixed percentage of GDP and passes a balanced budget amendment. Both of these policies would have disastrous long-term results for the U.S. economy.
The Republicans’ concern for the “deficit crisis” is hypocritical. Conservative policies of tax cuts for the rich and deficit-financed military expenditure are the real causes of our deficit problem, not excessive government spending on health, education, and child care. Nearly half of the total $14.2 trillion total debt owed by the United States government derive from loss in government revenue due to the Reagan and Bush tax cuts for the wealthy and corporations and by their administration’s huge increases in military spending. And, we owe over 50% of the deficit to ourselves.
To see if no deficit spending makes sense, try this test. How would you buy a home or a car? Since you could not go into debt – you couldn’t buy a home.
The anti-democratic tendencies of fast food thought and sound bite discourse is clear in the Republican proposals for a balanced budget amendment. Over simplification of complex economic issues is wrapped up in language of sensationalism, while eliminating any pretense to thoughtful argumentation on the reality of our economy. Instead of reading books they listen to talk radio.
The mass media repeat the mantra being produced by the “noise machine” funded by the corporate right-wing that pretends that the U.S. has a real deficit crisis that can be solved only by slashing needed government programs and thereby throwing the most vulnerable groups in society under the bus. The rational solutions of raising tax revenues from the wealthiest individuals and most profitable corporations and slashing unneeded military spending in order to fund vital social programs and provide the infrastructure for future growth are rejected out of hand.
What should we do? Well. Lets try a little more democracy and less dependence upon a legislature owned by corporate and banking interests. And for our local Republican Congressmen- lets urge them to read a book on economics before they make things worse.
The Economic Crisis: Sources
Gar Alperovitz, America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy. (2005) John Wiley and Sons
Dean Baker, Plunder and Blunder: The Rise and Fall of the Bubble Economy, (2009)
William K. Black, The Best Way to Rob a Bank is to Own One. 2005.
Campbell, Duane. Choosing Democracy: a practical guide to multicultural education. (2010)
Engler, Mark. How to Rule the World: The coming battle over the Global Economy. (2008)
Justin Fox, The Myth of the Rational Market: a History of Risk, Reward, and Delusion on Wall Street. (2009)
Jeff Faux, The Global Class War: How America’s Bipartisan Elite Lost Our Future- and What It Will Take to Win It Back. ( 2006)
Simon Johnson and James Kwak, 13 Bankers : The Wall Street Takeover and the next Financial Meltdown. 2010.
David Harvey, The Enigma of Capital and the Crisis of Capitalism. (2010)
Paul Krugman, The Return of Depression Economics and the Crisis of 2008. (2009)
Kuttner, Robert. A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the struggle to contrl our economic future. 2010.
National Commission on the Causes of the Financial Crisis. The Financial Crisis Inquiry Report. 2011.
Nomi Prins. It Takes a Pillage: Behind the Bailouts, Bonuses and Backroom Deals from Washington to Wall Street. (2009)
Joe Schwartz, The Future of Democratic Equality; Rebuilding Social Solidarity in a Fragmented United States. (2008)
Joseph E. Stiglitz. Free Fall, America, Free markets, and the Shrinking World Economy. (2010
Some on line resources on the economy,
Chicago Political Economy Group. www.cpegonline.org
Economic Policy Institute. www.epi.org
United for a Fair Economy. www.faireconomy.org
Center for Economic and Policy Research. www.cepr.net
New Deal. www.newdeal20.org
To calculate the benefits that the rich in your state received from the Obama/Republican compromise. Citizens for Tax Justice. http://www.ctj.org/
And, my blog. www.choosingdemocracy.blogspot.com
More resources at www.fightbackteachin.org