Preparing the Lambs for Slaughter: The Debt Knife Awaits

In order to maintain the appearance of democratic legitimacy in our increasingly authoritarian state, the theoretically sovereign (but actually emasculated) people must be guided in the “right” direction by their oligarchic masters. A classic method of manipulation, deployed shamelessly by the Junior Bush Administration to garner support for its entirely unnecessary and grossly immoral wars, was to incite fear among the populace. Forgetting FDR’s admonition to see through the debilitating irrationality of that emotion, the American people largely endorsed the Iraqi bloodbath, emblazoning their gas-guzzling SUVs with the symbols of blind adherence to conventional, putatively patriotic wisdom, and paying no attention to the red stains on their hands. For a predatory regime, this willingness of the people to support manifest evil boded well for future assaults against human dignity and justice, both abroad and – when the moment was ripe – at home.

We now stand at just such a moment, but in this case the tractability of the people will be used not to kill, maim, and dispossess innocents in faraway places, but to further impoverish and suppress ordinary citizens right here at home. The plutocratic elite that has been steadily amassing an extraordinary share of our national wealth and income finds itself on the verge of a great additional uptick in its fortunes. And, ably assisted by an army of propagandists in the corporate media, it will be able to pull off this coup without needing to worry about a latter-day recrudescence of Shays’ Rebellion. The people, to borrow a phrase from Robert Bork, will slouch towards Gomorrah of their own volition.

A Transcendental Debt Meditation

As a typical corporate rag, the Leesburg Daily Commercial has been providing loyal service to the owners of America. One would have to be brain-dead (or as deliberately duplicitous as Robert Short) to fail to notice the pattern: Cal Thomas, Cal Thomas, Cal Thomas; Star Parker; Cal Thomas; Deroy Murdock; Cal Thomas; Russ Sloan. The names of the propagandists really don’t matter any more, and the Daily Commercial has almost admitted as much through its increasingly slipshod type-setting, wherein “Name Here” appears next to the mugshot of the blowhard du jour. These various personalities are members of a plutocratic cult, and merely add a superficial flavor to the same crap. Their incantation goes something like this:

Entitlement spending is out of control. Government debt is too high. The rich are carrying everyone else on their backs. Om!

Rich people are job creators who must be rewarded, not punished. The industry and virtue of the rich make America great. Om!

The poor have only themselves to blame, contribute nothing to society, and deserve no better.  The unemployed are lazy and worthless. Om!

Spending is out of control. Government debt is too high. But we must reduce the crushing tax burden on the rich so they will continue to create wealth for us all. Om!

Spending is out of control. Government debt is too high. But the world is a dangerous place and we need our military to protect us from evil. Om!

Cut social spending; cut social spending; cut social spending. Ommmmm!

Did you get the message yet, sheeple? Do you know where you’re supposed to go? Can you see the pen up ahead? And do you know what’s going to happen to you once they’ve got you in there? At a bare minimum, you’re going to get fleeced.

Marching to the Drums of Class War

The propagandists’ reaction to our nation’s little New Year’s drama has been most amusing to behold. Cal Thomas feigned outrage that the deal did nothing to address the debt issue, doing his part to maintain the illusion of crisis that is so important to the plutocratic cause. According to his ever-so-slightly tinctured narrative, the spendthrift Democrats keep suckering well-intentioned but credulous Republicans into accepting tax hikes in exchange for spending cuts that never materialize. Let’s just forget that Republicans like spending Aircraft Carriermoney, too, especially on highly profitable weapons systems that are designed to kill human beings with industrial efficiency. It is only the spending on social welfare programs that is blowing up the budget; the $1.3 trillion spent on the empire each year (which just so happens to equal the budget deficit itself) could not possibly be part of the problem, could it? The fact that Social Security contributed absolutely nothing to the current fiscal situation, is solvent for many years to come, and could easily be solvent for decades thereafter with an increase in the current earnings limit on FICA taxes – a limit which makes the payroll tax profoundly regressive – will be drowned out by the incantations of the cult members. The fact that the nation’s insistence on providing healthcare services through a for-profit model makes our per-capita costs far higher than those of other OECD countries, while delivering poorer results, will be left out of the case against Medicare. And the intellectually bankrupt practice of ignoring dwindling tax revenues (due to both the Great Recession and supply-side mania) as a contributor to fiscal imbalance will continue, replacing a two-sided equation with a single, cynically selected variable.

If Republicans were serious about restoring fiscal balance, they would take a few pages out of Dwight Eisenhower’s book. The myth of the Laffer Curve would be consigned to the scrapheap of history in favor of a return to a truly progressive tax code that recognized ability to pay as a central tenet. This reappraisal would include a much higher tax burden for corporations, which once contributed more to the U.S. Treasury than individuals but now pay far less and enjoy so many favors that many of the biggest conglomerates actually receive net refunds. (Russ Sloan writes about them every week, doesn’t he?) Meanwhile, on the spending side, Ike’s warnings about the evil of the military industrial complex – a lecture that is dusted off and recited at the start of every Congress and then spat on by almost every member except the retiring Dennis Kucinich – would see the country convert itself back from the empire it should never have become into a peaceable republic that minded its own business. This, of course, is about as likely as a heartfelt apology from the NRA. The Republican Party has a higher calling than fiscal rectitude: after-tax profits. And it understands, despite all the rhetoric to the contrary, that government spending doesn’t just create jobs; it makes certain people rich. Spending to alleviate poverty is expendable; spending to create and maintain the wealth of the corporate oligarchy is sacrosanct.

Even more important than this obvious reluctance to walk the fiscal walk is the failure of both parties to publicly worry about the massive private debts that have accompanied the financialization of the economy. The public debt is not nearly as much of a drag on the economy as the The Bubble and Beyondpropagandists want us to think, especially when the government can borrow at such low interest rates. The real drag on the economy, as we have highlighted before, is the problem of debt deflation. As Michael Hudson, professor of economics at the University of Missouri, has explained in devastating detail, the asset-price bubbles blown up by reckless bank lending have allowed the banks to collect ever-greater shares of national income in the form of debt service. And the reason we never hear about this – or the $13 trillion in assistance to the banks literally printed by the Federal Reserve since the (latest) bubble burst – is because the plutocracy wants us to be indebted to the banks. That is how they own us and control us.

The debt and the deficit of the federal government are, above all else, ideological hammers being swung with ruthless intent against the people. The goal here is not fiscal balance; it is wealth concentration.

Deus ex Machina: Enter Barry “The Knife”

The New Year’s deal simply decoupled the tax issue from the spending issue. We all know that the spending issue is going to come back again and again, as we lurch from one carefully-erected cliff to the next. On the tax side, surely an objective analysis would conclude that the right-wing scored far more points than what is left of the left. The Bush tax cuts – quelle surprise! – were made permanent. The marginal-rate increase on high-earners that Obama campaigned on was watered down considerably (yet Obama still had the nerve to claim that he had fulfilled his promise to the American people). There was no “Buffet Rule” surtax on millionaires. The planned increase in the estate tax was largely neutered. And while the right “compromised” by finally making the ultimate sacrifice, pace Grover Norquist, of allowing tax rates to rise on the wealthy (by an unconscionably confiscatory additional 4.6% on ordinary income and 5% on capital gains, which remain tax-favored) the payroll-tax holiday was unceremoniously cancelled, delivering a hefty – and regressive – tax increase to people who really do earn their money. So much for Bill O’Reilly’s claim that Barack Obama won reelection by promising gifts to voters: once back in the Oval Office, he promptly reduced the take-home pay of everyone earning less than $110,100 while softening the blow to upper-middle class folks in the $200,000 to $400,000 range. Nice one, Barry. What else have you got up your sleeve?

In the coming battle over the debt-ceiling, the corporate media’s risible characterization of Barack Obama as a progressive is going to be enormously profitable for the plutocracy. Obama has already indicated in multiple ways that he is going to participate in “reforms” to our country’s most popular social programs. With regard to the debt ceiling itself, the Administration has taken off the table two of the main weapons that could effectively counter the blackmail of House Republicans. Obama will neither avail himself of the constitutional argument that the 14th Amendment requires the government to pay its debts, nor will the government issue platinum coins. Meanwhile, Obama’s comments on the work of the Simpson-Bowles Commission make it clear that the programs once regarded as the third rail of American politics are very much in play. Above all else – above the welfare of the people, above the legacy of FDR’s party – Barack Obama seeks the approbation of the establishment. What the establishment wants is a Grand Bargain that will sell social-welfare cuts as a necessary sacrifice for national prosperity. The fact that these cuts guarantee the continued deepening of profound income inequality does not matter to this alleged socialist. But his ability to do what no Republican could get away with – gore the Democrats’ sacred oxen – matters a great deal to the plutocracy. Obama began his first term by exonerating and rescuing Wall Street, which was obviously the most important issue for the plutocracy at that time. No thinking person should expect him to be any less obliging in his second term.

The Capitol’s theatrics take on a rather different hue when viewed through this prism. The much-ballyhooed divisions within the Republican ranks enable the President to play his favored role as independent arbiter, thereby disguising a massive, plutocratic wealth grab as the result of statesmanlike conciliation. When faced with such an intractable and unruly minority in the House, what choice does the poor president have? He’s been so terribly constrained throughout his presidency, hasn’t he? If even the Speaker can’t bring these Tea Party radicals into line, how can we expect the president to prevent some painful cuts to programs he really wants to preserve? And while the president did win against Mitt Romney, the people returned most of these Republican House members to their seats, so clearly the will of the nation ultimately supports a deal of some sort. The president is a good man trapped in a bad environment; how sad that such a clever man wasn’t able to do all the great things he could have done. He did the best he could under the circumstances.

Wake up and smell the bullshit, people. The nation’s long debt meditation is about to produce a truly altered state.

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