The American ruling elite is engaged in the greatest robbery of working people in US history. In the bank bailout of 2008-2009, the financial aristocracy effectively transferred to the federal government its bad debts and losses from a decade of reckless speculation. Now the working class is being compelled to pay the price for Wall Street’s looting of the Treasury through the destruction of Social Security, Medicare, Medicaid and other social programs in education, the environment, transportation and housing.
When they hear Barack Obama, John Boehner and other political and media representatives of big business declare that “there is no money” to sustain vital programs on which tens of millions of working people depend for their survival, workers should think back to the financial crisis that erupted less than three years ago. There was no suggestion then that “there is no money” to save the banks from collapse. On the contrary, staggering and essentially unlimited sums—as much as $23.7 trillion in combined cash, loans and guarantees from the Treasury, Federal Reserve and other institutions—were made available to defend the capitalist system and the financial interests of the super-rich.
There is a strong element of political manipulation in the current conflict over the federal debt ceiling. The congressional Republicans initially sought to use the legislation to raise the debt ceiling—a routine bookkeeping measure carried out dozens of times over the last four decades—to curry favor with ultra-right Tea Party elements. By holding the debt ceiling bill hostage, they would force the Obama administration to carry out deeper cuts, just as they did in April and May by blocking passage of the budget for the 2011 fiscal year.
These calculations were upset, however, when Obama proposed even greater spending cuts than those demanded by the House Republicans, tied to a small increase in taxes on the wealthy. He even proposed to put cuts in Social Security on the table, leading to House Republican complaints that they had been “outflanked” by the White House.
Obama clearly welcomes the element of crisis, injected by the August 2 deadline, to create the political atmosphere in which such massive cuts can be implemented.
In this conflict, the Obama administration represents the spearhead of the US ruling class assault on working people. His proposals for closing a few tax loopholes that benefit corporations and the wealthy were largely regarded by the financial aristocracy as a minor inconvenience that would provide a political cover for the overall budget cutting. The measures were supposedly a demonstration of “shared sacrifice,” as though millionaires paying slightly more for a corporate jet could be equated with an elderly couple compelled to choose between paying rent and paying medical bills, or a student forced to drop out of college for lack of a Pell Grant.
Moreover, the multimillionaires have been assured that any small charges on their wealth incorporated into an eventual deficit-reduction package will be more than recouped in tax reform proposals that will slash overall tax rates on corporations and high-income households.
No one should be under any illusions about the dimensions of the cuts that are being worked out in Washington. The Obama administration’s focus is on implementing changes that will be devastating to the working class. These cuts will plunge millions of working people into conditions of poverty, hunger, disease and premature death.
As far as the ruling class is concerned, this is a once-in-a-lifetime chance to fatally undermine social programs, particularly Social Security, Medicare and Medicaid, which the financial elite regards as an intolerable burden. To the extent that Obama has taken the lead in this attack, he clearly feels himself strengthened politically, while the congressional Republicans are in visible disarray.
via www.wsws.org
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