FacebookTwitterGoogle+RedditEmail

Feigning Panic at the Cliff Edge

by DAN DeWALT

Thank God for the fiscal cliff. With the election over, the media needed something upon which they could incessantly fixate, and our daily updates on the fate of the cliff-hanger negotiations are plenty of fodder to hold us until we have the final Christmas sales figures to talk about.

But let’s take a quick stroll down memory lane to a little over a year ago. At the time, Republicans were using the threat of not raising the debt ceiling limit as a bludgeon to beat the Democrats into submission on the subject of tax breaks for the very rich. Contrary to his earlier vows, Obama caved, the Bush tax cuts were saved, other Republican demands were met, and all that the Democrats got out of the deal was raising the debt limit and a further extension of unemployment benefits. But the Dems were quick to protest that they did get something else; the Republicans promised to negotiate in the future to resolve their differences and come to a budget agreement. Most importantly, we were told, if the negotiations did not succeed, the Democrats had engineered a result that would cut spending across the board (including defense cuts) but which would spare important social programs like Medicare and Social Security. Liberals like Vermont’s Peter Welch touted the tough terms of the deal, bragging about how it was about time that defense is not to be exempted from the common fiscal sacrifice that we all should be prepared to make. He also was pleased that they had saved Social security and other programs from further cuts.

Fast forward a year and the same Peter Welch was lamenting about what a mistake it would be if we went over the “fiscal cliff” that his once admired bargain was threatening to bring about. In fact, congressional lobbyist largess recipients (CLLR, formerly known as congress members and senators) from both parties were crying out about the dangers of defense cuts of this magnitude, (especially ones that would affect jobs in their districts) and warning that barreling over this cliff would plunge us back into recession or worse. To be fair, some of them, including Welch have recently acknowledged that we could probably survive the economic fallout and indeed use the cliff dive to finally cut the Bush tax breaks for the wealthiest (since the Republicans seem not to have realized that they lost the presidency as well as losing seats in both houses of Congress). But almost without exception, our pols want to avoid this “drastic” measure and instead engage in negotiations to find a compromise agreement.

The Democrats seem to have forgotten that they already forged a compromise agreement, and that the fiscal cliff is the result of already giving in repeatedly to Republican demands that have unnecessarily slowed our economic recovery. During the 2011 negotiations, the Republicans knew that a bird in hand is worth more than any number in the bush, and bragged that they got everything that they wanted at the time. They knew that if/when the sequestration failed and the fiscal cliff was looming into view, they would be able to start negotiations all over again and today they are still issuing the same shrill and wrong-headed demands while the Democrats still wring their hands and search their souls for more compromise victims that they might find in the budget. Already we’re seeing trial balloons including cuts and changes to the very programs that we were told were saved by the negotiations that set up the dreaded cliff.

The saddest aspect of all of this play-acting is that the entire concept of the dangers of deficit spending is one that hasn’t made sense ever since we went off of gold or silver standards and chose instead to base our currency on the “full faith and credit” of the U.S. government. The world monetary system operates by taking a leap of faith approach in valuing world currencies. Our currency is sound as long as we say it is and as long as our economy is functioning at a level which continues to generate commerce and wealth and investor confidence. So when CLLRs gnash their teeth and rend their hair while crying about raising the debt ceiling, the rest of the world looks on in dumbfounded amazement. We have long established that we have no treasury that actually backs U.S. debts. If the government decides to raise the debt ceiling, it simply does so, and as long as the world still has “faith” all is good.

The U.S., like the banks and corporations that control it, is too big to fail, at least for now.

It’s interesting that it was the Democrats who wailed about deficit spending under Ronald Reagan, but the Republicans and the rest of the country ignored them. Now the Republicans are doing the same thing, but they have done a better job of ginning up worries among the general public and are using that leverage to create the sense that this is a much bigger problem than it is. Certainly, we need to balance spending and revenue, but the current debate is all about politics and not about economics. There is a bevy of economists who hold this view, Nobel prize winners Paul Krugman and Joseph Stieglitz among them, but the political caterwauling has drowned out their more measured words.

What to do? Ignore the news for the next few weeks, and if you find yourself wandering in the vicinity of the fiscal cliff, grab a stuffed lemming and toss it over the edge. Maybe we’ll get lucky and some members of Congress will follow it over.

Dan DeWalt is an activist and journalist based in New Fane, VT.

This article originally appeared on This Can’t be Happening!

More articles by:
May 26, 2016
Paul Craig Roberts
The Looting Stage of Capitalism: Germany’s Assault on the IMF
Pepe Escobar
Hillary Clinton: A Major Gold-Digging Liability
Sam Pizzigati
America’s Cosmic Tax Gap
Ramzy Baroud
Time to End the ‘Hasbara’: Palestinian Media and the Search for a Common Story
José L. Flores
Wall Street’s New Man in Brazil: The Forces Behind Dilma Rousseff’s Impeachment
Patrick Cockburn
The Battle of Fallujah: ISIS Unleashes Its Death Squads
John Feffer
The Coming Drone Blowback
Alex Ray
The Death Toll in Syria: What Do the Numbers Really Say?
Richard Pithouse
We Shall be the Prey and the Vulture
Binoy Kampmark
Trump and the Polls of Loathing
Manuel E. Yepe
A Cruise Ship Without Tourists Arrives in Havana
Jack Rasmus
Greek Debt Negotiations: Will the IMF Exit the Troika?
Ajamu Nangwaya
Pan-Africanism, Feminism and Finding Missing Pan-Africanist Women
Howard Lisnoff
Israel, a Palestinian State and Anti-Semitism
May 25, 2016
Eric Draitser
Obama in Hiroshima: A Case Study in Hypocrisy
Ryan Mallett-Outtrim
Does Venezuela’s Crisis Prove Socialism Doesn’t Work?
Dan Arel
The Socialist Revolution Beyond Sanders and the Democratic Party
Marc Estrin
Cocky-Doody Politics and World Affairs
Sam Husseini
Layers of Islamophobia: Do Liberals Care That Hillary Returned “Muslim Money”?
Susan Babbitt
Invisible in Life, Invisible in Death: How Information Becomes Useless
Mel Gurtov
Hillary’s Cowgirl Diplomacy?
Kathy Kelly
Hammering for Peace
Dick Reavis
The Impeachment of Donald Trump
Wahid Azal
Behind the Politics of a Current Brouhaha in Iran: an Ex-President Ayatollah’s Daughter and the Baha’is
Jesse Jackson
Obama Must Recommit to Eliminating Nuclear Arms
Colin Todhunter
From the Green Revolution to GMOs: Living in the Shadow of Global Agribusiness
Binoy Kampmark
Turkey as Terror: the Role of Ankara in the Brexit Referendum
Dave Lindorff
72-Year-Old Fringe Left Candidate Wins Presidency in Austrian Run-Off Election
May 24, 2016
Sharmini Peries - Michael Hudson
The Financial Invasion of Greece
Jonathan Cook
Religious Zealots Ready for Takeover of Israeli Army
Ted Rall
Why I Am #NeverHillary
Mari Jo Buhle – Paul Buhle
Television Meets History
Robert Hunziker
Troika Heat-Seeking Missile Destroys Greece
Judy Gumbo
May Day Road Trip: 1968 – 2016
Colin Todhunter
Cheerleader for US Aggression, Pushing the World to the Nuclear Brink
Jeremy Brecher
This is What Insurgency Looks Like
Jonathan Latham
Unsafe at Any Dose: Chemical Safety Failures from DDT to Glyphosate to BPA
Binoy Kampmark
Suing Russia: Litigating over MH17
Dave Lindorff
Europe, the US and the Politics of Pissing and Being Pissed
Matt Peppe
Cashing In at the Race Track While Facing Charges of “Abusive” Lending Practices
Gilbert Mercier
If Bernie Sanders Is Real, He Will Run as an Independent
Peter Bohmer
A Year Later! The Struggle for Justice Continues!
Dave Welsh
Police Chief Fired in Victory for the Frisco 500
May 23, 2016
Conn Hallinan
European Union: a House Divided
Paul Buhle
Labor’s Sell-Out and the Sanders Campaign
FacebookTwitterGoogle+RedditEmail