By Cliff Montgomery – July 29th, 2011
The American economy is at the crossroads, you are told by the billionaire and millionaire shareholders runningthe corporate media.
We are in a crisis of untold proportions, they say.
America is broke, they lie.
But, they add, the problem is not that they flatly refuse to pay their fair share in taxes–apparently the peoplewith most of the money refusing to paying their taxes has nothing to do with an exploding public debt.
Nor is their complete lack of serious domestic investment over the last 30 years, or an economy now based onreckless Wall Street gambling, the real culprit. No, they insist, spiraling private debt didn’t create public debt.
The real problem is a democratically-elected president who–for a few months in 2009– actually worked to puttaxpayers back to work with their own tax dollars. Oh, and old taxpayers selfishly keeping themselves alive withtheir tax dollars…that’s a big problem too.
Aren’t you getting a little tired of the spoiled billionaires who were bailed out by you screaming that you are theproblem? Like Doctor Frankenstein, they create a monster and then refuse to acknowledge the hideousnessof their creation. They blame you for their foolishness, their fraud, and their mistakes.
Aren’t you tired of always being told that you are nothing but a burden to society, by the people who arenothing but a burden to hard-working Americans (provided you didn’t lose your job precisely because of alltheir Wall Street gambling…)?
It all sounds to us at The American Spark as if our responsibility-shirking wealthy fatcats are simply trying touse a good dose of “shock and awe” on average U.S. citizens.
Naomi Klein, journalist at The Nation magazine, has developed a fascinating thesis called The Shock Doctrine,which “explodes the myth that the ‘global free market’ [triumphs] democratically,” according to Klein’s websiteon the subject.
Through this doctrine, “America’s [so-called] ‘free market’ policies have come to dominate the world throughthe exploitation of disaster-shocked people and countries.”
Klein also has produced a fascinating book on her thesis.
The Shock Doctrine appears to be the the real basis of this so-called ‘debt crisis’, say the experts at TheCenter For Economic and Policy Research (CEPR), a major economic think tank.
“Policy debates in Washington are moving ever further from reality,” states CEPR, “as a small elite is moving tostrip benefits that the vast majority need and support.”
“The battle over raising the debt ceiling is playing a central role in this effort,” adds the think tank.
While “the United States is currently running extraordinarily large budget deficits,” CEPR points out that “thereason for the large deficits is almost entirely the downturn caused by the collapse of the housing bubble.
“At the beginning of 2008,” CEPR has recently stated, “the Congressional Budget Office (CBO), the country’smost respected official forecasting agency, projected that the budget deficit in 2009 would be just 1.4 percentof GDP.”
“The reason that the deficit exploded from 1.4 percent of GDP to 10.0 percent” says CEPR, “had nothing to dowith wild new spending programs or excessive tax cuts.
“This enormous increase in the size of the deficit was entirely the result of the fallout from the housing bubble,”points out the think tank.
But “the claim that the deficit is a chronic problem and not primarily the result of a severe cyclical downturn,”states CEPR, “also opens the door for cuts to the country’s major social welfare programs.
These programs are hugely popular, and “enjoy overwhelming support among people in all demographicgroups, including conservative Republicans.”
“There is no way that an ambitious politician would ever suggest major cuts to these programs apart from acrisis,” the think tank tellingly declares.
Thus “the crisis over the debt ceiling is the answer to the prayers of many people in the business community,”who “desperately want to roll back the size of the country’s welfare state,” but “know that there is almost nopolitical support for this position,” states CEPR.
“The crisis over the debt ceiling gives [the wealthy] an opportunity to impose cutbacks in the welfare state bygetting the leadership of both political parties to sign on to the deal,” which leaves “the opponents of cuts withno [apparent] political options,” declares CEPR.
“To advance this agenda they will do everything in their power to advance the perception of crisis,” states thethink tank. “This includes having the bond-rating agencies threaten to downgrade U.S. debt if there is not anagreement on major cuts to the welfare state,” states CEPR.
But the bond-rating agencies are hardly dispassionate judges. These same questionable agencies “showedan extraordinary willingness to allow profit to affect their ratings,” as “they gave investment grade ratings tohundreds of billions of dollars of mortgage-backed securities during the housing bubble.”
“Given their track record,” added CEPR, “there is every reason in the world to assume that the bond-ratingagencies would use…the threat of downgrades for political purposes.”
Thus “the battle over the debt ceiling is an elaborate charade that is threatening the country’s most importantsocial welfare programs,” adds CEPR.
“There is no real issue of the country’s credit-worthiness,” or “of its ability to finance its debt and deficits anytime in the foreseeable future.”
“Rather, this is about the [U.S.] business community…taking advantage of a crisis that they themselvescreated to scale back the country’s social welfare system,” points out the think tank.
