When “Wanted: An Honest Budget” is Business Week’s headline, you know something is wrong.
“White House budget writers of both parties have a long history of fiscal gimmickry,” Business Week complained after the new Bush plan was issued. “But [past trickery] hid mere billions of dollars. Bush’s new spending plan will mask trillions, [largely skipping over] the costs of Bush’s own top priorities, including Iraq, restructuring Social Security, and taming the Alternative Minimum Tax.”
Business Week points to some $1 trillion in spending excluded from Bush’s five-year budget projections, including $80 billion for the Iraq war this year. Exaggerated spending projections, on the other hand, are used to justify cuts in social programs.
Democracy requires full and timely information. Democracy is essential for workers’ parties and unions. On the other hand, while the capitalists claim democracy, they cannot afford the truth.
Now even financiers are complaining about government dishonesty. CEO Bill Gross of Pimco, the world’s largest bond fund manager, has denounced the government’s Consumer Price Index as a “con job,” significantly underestimating inflation.
Violations of democracy historically escalate as a social system’s contradictions deepen. Budget deficits are an important indicator of such contradictions, and the U.S.’s are huge. Now some conservative commentators are comparing U.S. budget accounting with Enron’s.
Gov’t accounting compared to Enron’s
The Enron comparison is worth pursuing. In August 2003, the bankruptcy court’s examiner, conservative lawyer Neal Batson, issued a lengthy report on the Enron debacle. Batson left no doubt that Citigroup and JP Morgan Chase banks “weren’t just at the edge of the Enron deception, but central to it,” as Fortune summarized.
But Batson also pointed to the essential role in the debacle of state and federal government agencies, including the Comptroller of the Currency and the Federal Reserve. The government was a co-conspirator in the Enron scam, an “enabler,” wrote Susan Lee, a member of the Wall Street Journal’s editorial board, in her analysis of Batson’s report.
Where did the roughly $80 billion in total losses from the Enron bankruptcy (and similar losses from WorldCom’s) disappear to? Much had been pushed off by the big banks onto workers’ pension funds and weaker financial institutions, here and worldwide. But billions more were pushed off ultimately onto the U.S. government, including the mis-named “Pension Benefit Guaranty Corporation” (PBGC). And this takes us back to lies, the budget and democracy.
Completely excluded from discussion, and in some cases from the budget itself, are trillions of dollars in direct and indirect U.S. government debt. Ultimately, those debts are owed either to workers in the form of health, education and pension obligations, including Social Security, the PBGC, Medicaid and Medicare, or to capitalists in the form of Treasury bonds and other debts.
Canceling debts owed to workers to cover debts to capitalists
In the last analysis, the Bush budget deceptions, including but not limited to the points Business Week complained about, revolve around capitalist attempts to cancel debts to workers in order to cover debts to capitalists. The deception grows as the contradictions of the system deepen.
The Iraq war itself is ultimately about plunder and cheapening of labor everywhere (not least through expensive oil), in an ultimately doomed attempt to service debts to capitalists. Bush, the front-man for the capitalist families who control Citibank, Chase, Exxon Mobil, Chevron Texaco, Bechtel, etc., is not going to speak the truth.
The struggle for truth, for full and timely information, is part and parcel of the struggle for democracy and socialism.
economics @ cpusa.org
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