Beyond austerity

There is a historic debate taking place in Congress that could determine what kind of America we will have for the foreseeable future. We can choose to reduce government investment in the well-being of average Americans, rebuilding the middle class and protecting it from the ravages of globalization or we can continue to transfer the wealth of the nation to an economic elite that has acquired an ever growing share of the wealth produced by workers and used it to increase their influence over a government designed to be of, by and for the People rather than corporations.

If your opinions are based on what you read in the corporate media, you are likely to believe that there is a debt "crisis" that can only be addressed with a mix of tax increases and entitlement cuts. We have been told there is a deficit "crisis" that will require sacrifice for all of us. The truth is that the fiscal cliff that could occur when expiring Bush tax cuts and across-the-board spending cuts automatically take place at the end of 2012 presents a great opportunity. If we address the real problem of excessive debt by making changes that end the growing inequality between average Americans and the investor class, we can rebuild the American economy while expanding the social safety net that is being threatened by austerity measures designed to protect the wealthy at the expense of the rest of us.  

Analysts agree that the combined effect of higher taxes and the slashing of entitlement spending would have the immediate effect of reducing the deficit by about $1.3 trillion. It would also throw an estimated 4 million people out of work, reversing the anemic employment gains since the Great Recession began in 2008. This in turn will reduce tax revenues, making it even harder to pay for remaining entitlements just when they will be needed more than ever. Nonetheless, it is argued that these draconian cuts would eventually lead to the elimination of federal debt, albeit at the cost of Greece-like austerity.

What proponents of austerity do not seem to realize is that they risk awakening average Americans to the fact that the entire economy operates in the interest of the wealthy investor class at the cost of sacrifice by the rest of us. In Europe, this has sparked riots and an international strike. With 80% of Americans favoring increased taxes on the wealthy, politicians who support austerity may just cause a class war the likes of which they cannot imagine. Fortunately, some members of Congress understand that the only way to build the economy and pay down the debt is to strengthen the middle class and the social safety net for the poor.

There are many benefits to increasing entitlements. Increasing payments to people on marginal incomes will increase the circulation of money, which has a multiplier effect of about $1.60 for every dollar spent. The poor and middle class spend most of their income, while the wealthy hold on to their wealth, investing in industries that profit them but do not produce American jobs and increasingly do not pay taxes. Offering security to older Americans through guarantees of Social Security payments and Medicare allows more to retire, opening up jobs for young workers who will be expected to pay for these benefits yet are asked to sacrifice them for themselves.

Reducing Social Security is unnecessary and manifestly unfair. Removing caps on FICA payments would ensure Social Security solvency forever and assure that the wealthy pay the same proportion of their income to the system as people who work for a living. Since life expectancy for US workers has fallen for the first time in history, the idea of making them work longer for Social Security and Medicare benefits is reprehensible.

Medicare represents the largest non-military expense to taxpayers. The simple solution is to cut overall costs of health care by creating a truly universal health care system. In other nations, this has cut costs by nearly half. The problem is that both parties are so dependent on campaign contributions from the medical-industrial complex and other corporate interests that neither is willing to work for a real solution to the problem of health care costs that are approaching 80% of GDP.

Ultimately, it is We the People who will determine what kind of future our children have, if we stand together to demand an end to a system that favors the few at the expense of the many. We can hold our elected officials responsible if we put aside partisanship and vote for candidates of any party who support a constitutional amendment to clean up campaign finance by banning corporate campaign expenditures and limiting contributions from the rich. The Pledge to Amend campaign is how we take back America for the People.