At The Edge Of The Fiscal Cliff
Demand MORE Social Security & Medicare
As the federal government approaches the “fiscal cliff,” a package of tax increases and spending cuts that would further undermine an already anemic economic recovery, the likely hazards of a bipartisan effort to reduce so-called “entitlements” like Medicare and Social Security have been covered extensively here. And the smiling faces that emerged from first discussions between President Barack Obama and House Speaker John Boehner are not reassuring. But most opposition to such a Great Betrayal are geared to merely preserving what is left of the safety net.
It’s time to go on the offensive!
The neoliberals Obama appointed as a majority on the Simpson-Bowles Commission claim the government must balance the budget by slashing Social Security, Medicare and Medicaid, instead of restoring progressive taxation. Bill Black, author of The Best Way To Rob A Bank Is To Own One, calling this the Great Betrayal, points out that only a Democrat can make it politically safe for Republicans who hate the safety net to unravel it, by legitimizing the claim that it must be cut. And if Obama weakens the safety net, ostensibly to save it, the effect would be to legitimize future Republican assaults on the safety net.
The really illegitimate “entitlements” are all but beyond criticism. Yet Stage One of the negotiations should rightfully be the end of subsidies to which recipients and constituencies who tend to feel entitled but really are not: to agribusiness, Big Oil, businesses that ship jobs overseas, and all those hundreds of U.S. military bases around the world. Yet they all belong in the “canceled” column, along with most of the unconscionably gigantic budget for “defense” (sic: war). We could make an all but immediate down payment on the deficit by stopping the cash flow of $2 Billion a week to the war in Afghanistan. And the bulk of “defense” spending, our 5,000 nuclear warheads and our ongoing wars do not enhance our security, but instead undermine it by bankrupting our government and helping recruit new generations of terrorists. Cutting these could save hundreds of billions easily.
Progressive taxation, based on ability to pay, and a financial transactions tax could raise billions more.
Having saved all that money in Stage One, we could deal in Stage Two with the genuine entitlements by increasing, not cutting, Social Security benefits and Medicare payments; lowering, not raising, the retirement age for Social Security, and extending Medicare coverage, for starters, to all those age 55 or over. These simple steps would provide real stimulus to the economy and by enabling and hastening retirements, produce millions of job openings for younger people who need work.
Still think we can’t afford it? Then perhaps you didn’t notice that, as economist Michael Hudson observes, “After the 2007 crash the Fed printed $13 trillion on its computers to give to bankers. It can do the same for Social Security….It can [also] pay state and local pension obligations in the same way it has paid Wall Street’s 1%. The problem is that the Fed is only willing … to save bondholders and the banks’ high-flying counterparties, not the 99%.”
Handling the deficit by attacking the social safety net connects with the effort to undermine and privatize another collective enterprise, the U.S. Postal Service. As others have pointed out, the USPS is doing fine financially in its operations but is being forced by legislation Congress enacted in 2006 to funds its retirement program for the next 75 years. And now we have efforts to diminish service, as by closing a local mail processing center here in Springfield, Oregon and stopping Saturday delivery. That’s how privatizers work: First undermine the effectiveness of the program, then claim it can be done better by “private industry.”
The safety net and the Postal Service are under attack for the same reasons: Each promotes the common good and stands for the proposition that we have interests in common that we can and should address collectively, through government as well as other forms of social organization. Each exemplifies and implements the notion that we should care about and for one another, and need not engage in a perpetual war of each against all. These core ideas, along with the living standards of the 99% (more precisely, the 99.9%), have been under relentless attack for decades. It began with deregulation of key industries and an ongoing effort to crush unions and the working class, and is now moving on to programs that promote the general welfare, not only Medicare and Social Security but Medicaid, Head Start, food stamps, college loans, unemployment benefits, and others.
Homelessness and suicide are on the rise. But these are symptoms of much larger problems. The basic story is that for about the last 30 years, incomes of everyone but the very rich stagnated. People compensated by working two jobs, longer hours, and then, by borrowing on the value of their homes, which was rising with the bubble that popped a few years ago. Now the middle class has lost trillions in what people thought was their net worth, and our politics have been so structured that the very rich continue to get richer while millions are impoverished, unemployed, underemployed, and ultimately homeless. We’re becoming a Third World country.
But I say Yes, We Can! afford a humane society. All we have to do to build upon the framework we now have for one is to de-fund programs that undermine our security and humanity, and tax citizens who can best afford it and processes, like financial transactions, that are most entitled to taxation. We could also use the $40 billion a month the Fed is currently spending on, as Mike Whitney has noted in detail, what amounts to garbage. And the first beneficiaries should be the core elements of the safety net: Social Security and Medicare.
A movement that united and mobilized to achieve such demands would be better informed and empowered and in a better position to achieve more fundamental change, while people who are struggling for the means of sustenance can’t even think about such things. And if we add Jobs For All to the existing and expanded safety net, we’re on the way a comprehensive program with enormous appeal to the entire 99%. But we have to begin by climbing out of the trenches and taking the offensive.
 See Bill Black’s essay at http://neweconomicperspectives.org/2012/11/wall-street-uses-the-third-way-to-lead-its-assault-on-social-security.html and buy a copy of his book at http://www.alibris.com/booksearch?keyword=The+Best+Way+To+Rob+A+Bank+Is+To+Own+One&mtype=B&hs.x=17&hs.y=12
 And by the way, military Keynesianism doesn’t work: Military spending is not an effective general economic stimulus or job creator. There is research suggesting military spending is one of the least effective ways to create jobs via the “Keynesian multipliers” flowing out of government expenditures. See Franklin C. Spinney, “Will Military-Industrial-Congressional Complex Heave the Middle Class Off the Fiscal Cliff? America’s Defense Dependency,” at http://www.counterpunch.org/2012/11/16/americas-defense-dependency.
 More details are in Bill Moyers’ January 13, 2012 interview, “Jacob Hacker and Paul Pierson on Engineered Inequality,” vimeo and transcript both available at http://billmoyers.com/segment/jacob-hacker-paul-pierson-on-engineered-inequality/. See also “America the Third-World Nation in Just 4 Easy Steps,” 10 November 2012 By Thom Hartmann and Sam Sacks, The Daily Take | at http://truth-out.org/opinion/item/12664-america-the-third-world-nation-in-just-4-easy-steps.