Conservative and corporate elites are stoking the turmoil, and using fear to panic a public into accepting harsh measures that would be otherwise unacceptable.
By Robert L. Borosage
August 8, 2011
Global economic turmoil is getting worse. Europe’s financial crisis now imperils Spain and Italy. The folly of premature austerity savages economies in Great Britain, Europe and, increasingly, the United States. China and the emerging economies are slowing down. This economy seems stalled at best. People are sensibly scared, worried about their jobs, their homes, their lost savings, their prospects.
Conservative and corporate elites are stoking the turmoil, and using fear to panic a public into accepting harsh measures that would be otherwise unacceptable. The stock market tanks after the debt ceiling debacle. Standard & Poor’s, the discredited and corrupted rating agency, rushes to downgrade U.S. debt, with such haste it doesn’t even get its math right. China’s news service announces the U.S. must roll back its bloated “welfare state” and its bloated military. The talk shows are inundated with pundits expounding the urgent need for the U.S. to get its deficits under control to regain its credit status.
One theme emerges; the Gang of 12 – the Super Committee created in the debt ceiling deal – is portrayed as our last hope. It is charged with identifying $1.5 trillion in deficit reduction over 10 years by some combination of cuts from Medicare, Medicaid and Social Security and increased tax revenues. Only if it acts responsibly, we’re told, and the Congress passes its measures under expedited procedures with no amendments, limited debate, and no filibuster, do we have a chance.
Pressure builds on the congressional leaders to pick responsible legislators to the committee, like the previous Gang of Six in the Senate, who will combine cuts in Social Security and Medicare with increased revenues. Republican leaders pledge to appoint members who will oppose any increase in taxes on the rich or the great corporations. Medicare, Medicaid and Social Security – the core promises we make to the elderly, the disabled, the dying – in our society are at risk. In an era of Gilded Age extremes of inequality, the largest and most effective anti-poverty programs are targeted for deep cuts.
Ignore the hysteria. Fight back against the shock doctrine. All of this is utterly wrong-headed. America doesn’t have a serious debt crisis. We have a jobs crisis. We’re digging out of a severe financial collapse and need to build a new foundation for the economy, for we can’t go back to the old economy that was built on debt and bubbles.
In the long term, the scary deficit projections are almost completely due to our broken health care system. Make reforms that move us closer to the norm of industrial countries in health care costs and we have no long-term debt problem. That requires taking on drug companies, private insurance companies, hospital complexes, the inane way we let powerful interests rig the rules for their profit. We’ve got to get the costs under control, not push the rising costs onto the most vulnerable.
In the short term, we need a strategy for reviving the economy so that it works for working people. That requires a serious strategy for making things in America again, combined with a commitment to balance our trade, confronting the mercantilist nations like China that trample global trading rules. It requires incentives and investments to capture a lead role in the green industrial revolution, moving to clean energy and reducing our dependence on foreign oil while addressing catastrophic climate change. It requires investment in strengthening the sinews of growth – investments in education and training, in research and development, in innovation, as well as building a modern infrastructure for the next century, updating the decrepit systems now crumbling around us. With interest rates near zero, despite the hyped rating agency fandango, there has never been a better time to borrow long term to build now.