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Fri, Jun

The Really Real Debt Crisis

VOICES

ACCORDING TO LIZ - Whack-a-doodle Republicans, not content with trying to undermine election results, now want to trash the global economy by defaulting on the national debt. 

Which is a BS concept. 

The crisis is not the national debt, which in no way is even approaching dangerous let alone critical levels. 

It is in the hostage-taking by fringe elements and the possible capitulation to their demands by the man who is purportedly the leader of the free world. 

A world clearly free from sanity. 

With only a week to go before a possible default, instead of offering olive branches, the MAGA-nuts are fanning the flames of friction and dissonance by demanding increases in pet programs including more for the military and the reinvigoration of Trump’s wall. 

Not only is this incredibly reckless for the future of our country’s economy, these posturings and whines by McCarthy’s band of raving radicals are the actions of spoiled children determined to get their way. And who are quite prepared to wreck the whole world’s economy if they don’t get their own way. 

To add almost $5 TRILLION in spending to benefit the inheritors of a lousy few multi-billionaires’ estates, extend the Trump tax breaks for the wealthy, and unconscionably puff up Pentagon spending to increase the threat of war so armaments manufacturers and others sucking on the military-industrialist complex’ teat can profit and more mothers can send kids to their deaths as IED fodder. 

There is no “ceiling.” The money has already been appropriated and spent. No law can change that, it’s a done deal. What the crazies’ Congress is really trying to do is claw back spending that benefits ordinary Americans so that their silver-spoon manipulators can enjoy even greater gains. 

As Biden points out:MAGA Republicans are threatening a default that could cost us millions of jobs and trigger a recession, all because they are demanding deep cuts that will hurt hardworking families—even while they protect tax breaks for the wealthy and corporations."

 

 Given that Democrats in the past have been better at capitulating than not, let’s hope the President doesn’t blink in his stare-down with McCarthy. Or, these are the catastrophic consequences we will face from a MAGA Republican-fueled recession: 

  • over 7,000,000 Americans out of work
  • more than double the current unemployment rate, pushing it above 8%
  • skyrocketing interest rates
  • $10 trillion in lost household wealth
  • over 20 million at-risk Americans kicked off Medicaid, leading to another health crisis
  • more than a million women, infants and children booted from the WIC program
  • services such as Meals on Wheels cut for over a million low-income seniors
  • in excess of 430,000 low-income families evicted from Section 8 housing
  • rental assistance slashed for 640,000 families
  • 200,000 children bumped off Head Start
  • 180,000 kids denied childcare
  • 80,000 jobs gutted from the Department of Veterans Affairs, significantly delaying care for millions of veterans
  • millions more Americans left without the services of Community Health Centers
  • 6.6 million students’ Pell Grants decimated
  • 80,000 young Americans deprived of the opportunity to attend college 

To save a few phenomenally wealthy dynasties from estate taxes and to allow Trump’s billionaire buddies to continue to pay reduced taxes, their sponsored MAGA-militants are busily trying to shuffle the cost onto the backs of ordinary people. 

Escalating interest rates combined with lower economic growth will further exacerbate the deficit thus created. As revenues decline, our government and our fellow Americans will have to borrow more and more to survive transferring money from assets and jobs into lenders’ profit. 

McCarthy’s MAGA-minions are backed by the Foundation for Government Accountability, a conservative think tank funded by far-right billionaires who stand to benefit the most from keeping the Trump tax cuts for the uber-wealthy in place. These are the same folks promoting roll-backs on child labor laws to increase the supply of cheap labor. 

By playing up the work requirement to voters who don’t want to see others get something for nothing, these conservatives are building support for the MAGA-maniacs and their own obscene income on the backs of the poor. 

Undoubtedly they are a few bad apples but imposing onerous work requirements on millions of economically suffering Americans feels more like the bullies who have won seats in the lottery of Congress are seizing the opportunity to kick the most vulnerable when they already lie bleeding. 

This rightwing rogue element of the House is so intent on imposing its will on those it casts as “bad guys” that it doesn’t realize or care that it (and the American people) will be beholden to those funding this attack for years to come:

  • the private military contractors who are already price gouging the Department of Defense wasting our tax dollars
  • the fossil fuel industry, jonesing to increase domestic exploitation of oil and coal reserves by expediting permitting and acceleration construction of pipelines, refineries and other polluting projects
  • the 0.01% - do billionaires really need tax breaks to improve social inequality? 

The tail wagging the dog of the Republicans in Congress forced the passage the grotesquely named Limit, Save and Grow Act by a vote of 217-215 in April. Part of this bill calls for rescinding $71 billion earmarked to modernize IRS operations... but the Congressional Budget Office has determined that such a cut would increase the deficit by $120 billion… or more depending on how effective bean-counters for millionaires are at hiding their employers’ income. 

Back to the debt ceiling; it was raised three times under President Donald Trump, by some $8 trillion, with no strings attached. And it’s the Bush and Trump tax cuts for the wealthy that have driven up the deficit that Republicans now claim to care so much about. 

Brinkmanship over the debt ceiling has been a partisan ploy, primarily by Republicans, since the days of Reagan, almost exclusively fueled by soaring national debt due to... ta-da, Republican tax cuts for the wealthy and big corporations. Reagan’s massive military expenditures and enormous tax cuts had doubled the nation’s debt in under five years. 

So, is the debt ceiling real? No. 

But what is, is the posturing by McCarthy and his horde that is seriously undermining the credibility of the U.S. government and confidence in its ability to pay its debts, a metric more important than the actual debt level. 

Furthermore, it is removing the remnants of the leadership America once held in the international arena. If the U.S. budget falls prey to the purveyors of profits at all cost, endless wars and the acceleration of global warming will continue, and global peace and the war on climate change will go down the drain. 

What can Biden do? 

The language in the 14th Amendment of the Constitution is unequivocal: "The validity of the public debt of the United States … shall not be questioned." The country must pay its bills. 

Bernie Saunders and other progressive politicians, concerned that the limited social net that now exists will be rent asunder, are urging President Biden to use the 14th Amendment to avoid the disaster that would follow – on Wall Street, to the international economy, to the environment, for all Americans who struggle to get by from day to day – if the government was to default. 

That route may not be the best choice, but it is not the nuclear option of caving in to the demented destructive demands of the Republican extremists.

(Liz Amsden is a contributor to CityWatch and an activist from Northeast Los Angeles with opinions on much of what goes on in our lives. She has written extensively on the City's budget and services as well as her many other interests and passions.  In her real life she works on budgets for film and television where fiction can rarely be as strange as the truth of living in today's world.)