Wednesday, November 28, 2012

When Austerity Attacks

Coming soon to a country near you (likely your own): “Austerity Attacks II: The U.S. Version.”

In all seriousness, lawmakers seem poised to bring the same devastating budget-cuts and austerity measures that have crippled Portugal, Spain and Greece here to the United States. Under the pretense of averting the “fiscal cliff,” Congress is eyeing so-called “entitlement” programs like Medicare, Medicaid and Social Security.
And here you thought these programs would be safe under President Obama. Silly liberals.
Let’s fill in the details for the uninitiated. The so-called fiscal cliff—for those who have been living under a rock for the past two months—is the dramatic, sound bite-worthy name given to the series of spending cuts (including the Bush-era tax-cuts for the very wealthy) which are set to automatically expire at the end of 2012. Economists (well, some of them, anyway) fear a failure to determine which spending programs to maintain will send the U.S. “over the fiscal cliff”—i.e. the shit will hit the fan, economically speaking. President Obama has signaled for weeks now that he is willing to work out a “Grand Bargain” to avert economic disaster. Many fear Social Security and Medicare/Medicaid—the crown-jewels of not just liberalism, but social democracy--could be part of this bargain.

As I said, not every economist is convinced the fiscal cliff is really as menacing as the cable news talking heads make it out to be. As Nobel Prize-winning economist, Paul Krugman points out in the New York Times (11/09/2012), the fiscal cliff “isn’t really a cliff.”
“It’s not like the debt ceiling confrontation where terrible things might well have happened right away if the deadline had been missed,” he writes. “This time nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013.”
Author, James K. Galbraith takes this criticism even further. In an article for AlterNet (“Six Reasons the Fiscal Cliff is a Scam,” 11/22/2012), Galbraith calls the debate “policy-making by hostage-taking,” and a “contrived crisis.”
He writes, “Stripped to essentials, the fiscal cliff is a device constructed to force a rollback of Social Security, Medicare and Medicaid, as the price of avoiding tax increases…”
A trumped-up crisis or not, there are a few things readers should know.
First off, it is important to understand these programs are not really “entitlements” as they are routinely referred to by critics so much as earned income benefits. Social Security and Medicare are programs Americans pay into, through paycheck deductions, throughout their working lives.
Furthermore, Social Security does not contribute one dime to the federal deficit. And, contrary to Republican talking points, there is nothing wrong with Social Security's overall sustainability. The program may need some minor tweaking down the road, but all reports indicate it is structurally sound for the foreseeable future. Medicare, likewise, is projected to remain financially viable until at least 2024, and even then there will still be enough left in the fund to pay 87 percent of benefits.
Indeed, I suspect much of the misinformation about how we can “no longer afford” these cherished programs, which are crucial to helping provide for the elderly, the poor and citizens with disabilities, is being promoted by free-market-obsessed elites who never approved of them in the first place. Now they see their opportunity to obliterate them forever.
Second, there are two main drivers of this fiscal disaster which the media seem all too willing to overlook: The Bush tax-cuts for the rich, and our two unfunded wars in Iraq and Afghanistan. Raise taxes on the wealthy and bring our troops home from both countries (yes, there are still “non-combat” forces in Iraq), and there would be no cliff.
It angers me to no end when the uber-rich mock and deride the “freeloaders”— “parasites” in their Randian lexicon—as a financial drain on the system, when most of them are getting unwarranted and undeserved tax-cuts.
Yet Wall Street robber barons—the very same people who crashed the global economy—under the guise of a group called Fix the Debt have no qualms about publicly calling for cuts to Social Security, Medicare and the like. One such member of the Fix the Debt crusade, Goldman Sachs CEO Lloyd Blankfein stated on a recent appearance on CBS Evening News (11/19/2012):
“The entitlements and what people think they’re going to get…they’re not going to get it.”
But wait, you ask: Surely Blankfein’s view was juxtaposed with a critic of cutting benefits, right? You know—in the interest of “objectivity” and all that?
Well, I must have missed that segment of the program. In fact, throughout all of last week, CBS’s Scott Pelley only spoke with corporate CEOs from the Fix the Debt clan. No contrarian voices were featured. Hmmm… I wonder if this is an example of the media’s “liberal bias” I constantly read about in the Portland Press Herald’s letters to the editor section?
Medicare, Medicaid and Social Security are part of the New Deal promise to society’s most vulnerable that they would be taken care of. They are not “handouts,” and those who receive them are not “moochers.” To jeopardize these federal programs while millionaire CEOs continue to rake in record profits, and many global corporations avoid paying income taxes entirely is unconscionable.
The ever-growing income disparity in this country is not only immoral, it is ultimately unsustainable. As John Steinbeck observed in The Grapes of Wrath, the poor, exploited masses will not tolerate their oppression forever. “How can you frighten a man whose hunger is not only in his own cramped stomach but in the wretched bellies of his children?” he wrote. “You can’t scare him—he has known a fear beyond every other.” 

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