WASHINGTON – The media are covering Washington’s latest fiscal crisis basically as a spectacle-the way local news now covers traffic accidents, crime scenes and big storms. But there is a reality underneath the spectacle-the decisions that are made and not made in Washington over the next few weeks will affect what happens in the lives of all of us. Here are some basic facts that can help make sense of all the craziness:
1) Our economy is not growing fast enough to create the jobs necessary to put people back to work.
2) The sequester and other cuts in federal spending slow economic growth and destroy jobs in the short run, and in the long run, hurt our nation’s competitiveness because we don’t invest enough in infrastructure, education and research to keep up with our global competitors.
3) While it is a good idea to borrow money to invest in public goods like infrastructure and education that create jobs when the economy is weak, in the long run that money has to be paid back through a fair tax system.
4) Because so much of the wealth and income in our society goes to big corporations and the one percent, and they have rigged the tax system in their favor, we don’t have enough revenue in the long run to pay for the things we need the government to do-from national defense to keeping the parks open to paving the roads and rebuilding the bridges.
For most of us, this is a bad story. It is a story of lost jobs, falling wages, crumbling communities and fading hope. But for the one percent, things are just fine, thank you. Stock markets are up, real estate prices in wealthy parts of the country are rising again.
And here’s where the radical Republican agenda comes in. It is the agenda of the “I’ve got mine Jack” crowd, the people who don’t care what happens to our roads because they fly in private jets, who don’t care about what happens to our schools because their children and grandchildren go to private schools, who don’t care about whether there are jobs in this country because they live off the earnings of money invested through tax havens. This is the mentality of the Koch Brothers and Sheldon Adelson and the other billionaires who fund the tea party.
The billionaires don’t want to be taxed. They are afraid if the government does its job, they will be taxed. So they want to force the government not to do its job. That means first they are happy to close the government entirely if President Obama won’t agree to pull back on the his commitment that all of America’s working families should have real health insurance. But the billionaires’ demands don’t stop there. They want to end food stamps, and let the poor starve. They want to cut Social Security and Medicare, stop the government from regulating Wall Street, and, surprise surprise– lower their own taxes.
Threatening to close the federal government is deeply irresponsible and will hurt a lot of people. But it’s not the limit of what Congressional Republicans and their billionaire funders are prepared to do to get their way. Their real high card, they think, is the threat to force the United States into a manufactured default, where we as a country refuse to pay the debts Congress has already incurred, even though we have the money to do so. That’s what the debt ceiling is all about. The United States government has borrowed money, and just like anyone else who borrows money, we promised to make payments of interest and principal to our lenders. We are a rich country and we easily can do it-either by raising taxes or borrowing more, but only if Congress votes to do so. If Congress refuses to vote to do either, Congress will provoke a Constitutional and a financial crisis.
It will be a financial crisis because the world financial system is constructed around the assumption that the United States will pay its debts. It will be a Constitutional crisis because the Constitution requires that the United States pay its debts, and it requires that the President spend the money Congress appropriates, and it requires Congress’ approval to raise taxes. The president cannot obey all three requirements if Congress does not raise the debt ceiling.
Here is the strange thing, the rich people who fund the Republican party will be hurt most immediately by this type of crisis-because they own lots of stocks and bonds. They are literally pointing a gun at their own heads and demanding the rest of us do what they want. So what explains their behavior? It’s really rather simple-they are sure President Obama is a grown-up, and will cave into their destructive demands rather than allow the United States to break its promises. They are sure he is both responsible and weak.
Why are they so sure of this? Because this is what happened in the summer of 2011. Congress threatened not to raise the debt ceiling, and President Obama agreed to job destroying spending cuts that have damaged our economy, including what ultimately became the sequester.
But this time, President Obama seems to have had enough. He is saying – and Senate Democrats are backing him up – that there will be no negotiating over the debt ceiling. And that there will be no concessions on health care to prevent a government shutdown.
There will be great pressure on the president from Wall Street and Washington insider types to cave in yet again. But working people have to stand with the president. The stakes could not be higher. The very idea of a working government, one that does the peoples’ business, is at stake. Clearly, there is no end to the destruction the radical elements of the Republican party will do if they get away yet again with holding our nation hostage in this way.
Working people need to bring our own pressure. Our message is clear-repeal the sequester-its killing jobs and growth. No cuts to Social Security, Medicare, and Medicaid benefits. Protect food aid for the poor. And create jobs and raise hundreds of billions of dollars to invest in our future by ending all tax subsidies for outsourcing.
And right now we need to stand with President Obama when he says no to hostage taking, because the only appropriate thing to tell someone who is pointing a gun at their own head and making crazy demands is, “go ahead, make my day.”
Damon Silvers is in charge of developing economic policy for the AFL-CIO. This article is reprinted from the AFL-CIO Now Blog.
Photo: Obama to tea party: “Make my day.”