Tuesday, May 17, 2011

The National Debt: Cause for Reform or Excuse for Retreat

There is occurring today in our nation’s capital a phony debate about phony issues and phony crises.  We are told that the nation will default because we exceed our debt limit.  Yet how is that limit set - if it were set by the open market (which is what our Republican friends argue everything else should be governed by) it would be based on when investors no longer wish to buy US bonds and carry our debt.  If set by the government it should be based on the budget.  Congress and the President have agreed upon a budget that funds the government through September 2011.  The President has the authority to enforce that budget and if revenues do not equal expenditures to borrow sufficiently to do that.  This phony debt ceiling was enacted a few decades ago as a congressional smoke and mirror.

We are told that the US debt is astronomical because of the many social programs that were enacted beginning with the New Deal and through the Great Society.  And, yet the multi-trillion dollar debt is really due to the Bush wars in Iraq and Afghanistan and the Bush prescription drug add-on to Medicare that were not only not funded by enhancing the revenue streams  but were done simultaneously with the largest tax cuts on the wealthy that were ever enacted.  If we had the tax rates of the Ronald Reagan years not to mention Dwight Eisenhower the so-called debt crises just wouldn’t be a crisis.

We’re also told that Medicare and Social Security are going broke. Why and How?  Well in large part because the federal government has been using the insurance funds of these programs to pay for other things like those unfunded wars.  The so-called short fall in Social Security could be fixed by increasing the income amount (currently first $106,000) on which social security insurance premiums (6 1/2% employees and 6 1/2% employers) are collected.  We could increase that amount and levy a lower premium like 3 ¼% on incomes over $106,000 and without an employer share).  The same concept applied to Medicare insurance would go along way toward insuring that programs’ solvency.

The Republican answer to these problems is gut the programs and let the fittest survive.  The Democratic answer is to raise taxes on the wealthy.  We need to do that.  But we also need to reform the programs along the lines I suggested (and raise the social security age from the current 67 to a future 69 - and perhaps the Medicare age to 67 both effective in 30 years.)  We also need to cut military expenditures and tackle the military industrial complex that has us spending like it was WWII or the Cold War and yet we are not facing those types of enemies today.  We need to stop subsidizing those who don’t need subsidies like the oil companies and the big agribusiness corporations and take the regulatory action that will lower prices of oil and food to the consumers.

The radical right wing Republicans would let our government default on its obligations and plunge the world into a global depression.  They did this under Hoover by causing the Great Depression with a high tariff act and simply made the situation here and in Europe worse. They will tell you that only WWII brought the US out of the Great Depression. I would argue that Republican isolationism, both diplomatically and economically, in the decade after WWI was one of reasons for the inevitability of WWII.

Unfortunately it looks like we will have a Presidential contest next year that will focus on reasons people dislike Obama, the kookiness of the likely Republican candidate, and a myriad of irrelevant issues like birth certificates and marriages of candidates, so the result will not be seen as a decision by the American people as to where they want to go and how they want to handle the nations problems. In 1936 and 1964 this nation held Presidential elections that clearly offered a choice between the conservative philosophy of survival of the fittest and liberal belief in a compassionate and helping government.  And both times liberal compassion not only won it won by the largest of margins.


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