By GREGORY N. HEIRES
Don’t buy into the political hype about the looming “fiscal cliff.”
The Right is using “deficit hysteria” to set the tone of discussions with the Obama administration over what to do about deep automatic budget cuts set to go into effect next year, the end of the Bush tax breaks and the restoration of a 2 percent payroll tax cut.
If conservative politicians get their way, working families and the poor will once again be called upon to make unnecessary sacrifices while the wealthy get away without paying their fair share.
Rather than focusing on spending cuts, the Washington elite should be discussing the country’s jobs crisis and infrastructure development. The government could wipe out much of the deficit by creating millions of decent-paying jobs, restoring the Clinton-era tax on the rich and ending the war in Afghanistan.
What’s going on in Washington is an example of what author Naomi Klein calls “Disaster Capitalism”: creating or taking advantage of a crisis to ram through a conservative agenda, such as austere economic policies, privatization, dismantling unions and deregulation. This was first carried out in a big way after the U.S.-supported coup in Chile to overthrow the democratically-elected government of socialist Salvador Allende in 1973. It’s what’s going on today in Western Europe, where governments are answering the call of international bankers and their allies to erode the living standards of Europeans by defunding the welfare state, reducing incomes and cutting pension benefits.
Do we want this in the United States, where our social welfare benefits already lag significantly behind what’s on the chopping block in Europe?
By giving President Barack Obama a second term, a majority of Americans expressed their desire that the government preserve and protect our greatest entitlements—Medicare and Social Security—while raising taxes on the wealthy.
In a positive sign, Senate Majority Leader Harry Reid would like to keep Social Security out the discussion about the so-called fiscal cliff. This makes sense since the Social Security payroll tax doesn’t go into the general fund and therefore doesn’t affect the deficit. Besides, the funding shortfall of Social Security is years away and can be largely dealt with by lifting the cap ($110,100 in 2012) on the payroll tax. (If that were done, the program would be solvent for 75 years.)
The financial pressure on Medicare is real. But the government should look to alternatives before slashing benefits deeply.
Consider:
- computerized fraud and abuse adds 10 to 26 percent to our annual health costs, according Malcolm Sparrow of Harvard University and
- the country loses vast sums because of waste, such as the duplication of tests, unnecessary treatments and excessive expenditures on drugs.
And Obamacare calls for major cost controls in Medicare. These should be allowed to occur before further reductions are implemented.
During a fragile economic recovery, Keynesian policies—spending on infrastructure, helping the unemployed, providing financial assistance to state and local governments, and investing in education—make more sense than adopting European-like austerity measures.
It’s time to put an end to the vicious attack on the living standards of the poor and middle class that has occurred in recent decades. With economic inequality at its worse since the Great Depression, a little redistribution of wealth and income is what the country needs.
www.thenewcrossroads.com Posted November 19, 2012
