Strike Debt!

A Fiscal Cliff For The 99%

By Andrew Ross

Forget the game of smoke and mirrors that was played out on Capitol Hill on New Year’s Eve. The American people were run off a cliff many years ago. The only thing that keeps us from falling hard is the suspension of disbelief in the myths peddled as fiscal common sense in Washington and Wall Street. Each new artificial deadline to put the almighty dollar’s house in order is an opportunity to shore up policies that are still delivering upwards of 90% of all U.S. income growth to the 1% and a burgeoning sludge-pile of debt to the rest of us. Tickets to the debt-ceiling pantomime are now being sold. No one should expect anything other than another two months of the same role-playing, while media pundits obediently circulate the same myths about the need to rein in public spending and free up the corporate powers to follow their benign, “job creating” instincts.

For some time now, Warren Buffet has been enjoying his role as the only prominent plutocrat who will openly concede that his side has been winning the class war hands-down. Speaking “truth from power,” he has all but pleaded with the nation’s legislators to raise taxes on himself and his peers. And wasn’t that exactly what happened on New Year’s Eve? For some of their number, yes, but the terms of the deal should be bluntly spelled out. We will pay more taxes, Buffet submitted, as long as you don’t interfere with the system by which we lay our hands on the wealth in the first place. In other words, we have reached the point so elegantly summarized by the aristocrat Don Fabrizio in The Leopard: “If we want things to stay as they are, things will have to change.”

Restoring 2001 income tax rates to high-income households is the smallest price to pay for preserving the debt-system and increasing the power of creditors to extract rents from every waking moment of our lives. The demand for government to run budget surpluses, which led to the “fiscal cliff” face-off, is a naked maneuver to open up more and more of our social needs to Wall Street’s predatory loan-making attention. Sovereign governments (and especially the one in Washington) are perfectly capable of expanding the money supply to adequately fund these needs. After all, this is exactly how Wall Street’s needs were taken care of in the wake of the 2008 crash, to the tune of $12 trillion. But instead of relying on government’s fiscal powers to secure the lives of the citizenry, the banks want to monopolize the money flow in order to increase their control over society. The means to that end is crystal clear. Bind everyone to indebtedness in every possible way–every household, business, municipality, and non-government institution.

One of the most cynical ways of spinning the deficit-reduction game is to compare the debts of the 99% with government debt. Despite the evidence that household budgets bear no resemblance at all to public budgets, the claim that ordinary people have somehow been living beyond their means has been marshaled to introduce harsh austerity measures in Southern European countries like Greece, Spain, Portugal, and Italy. In the case of the American economy, the analogy is even more baseless. Washington harbors the world’s reserve currency, and the buoyancy of its Treasury bonds depends on an informal trade arrangement with China that is unique, historically, among powers militarily at odds with each other. Which family budget has anything remotely equivalent at its core?

And yet, in the course of the next two months. we will be hearing a lot more empty talk about why everyone needs to tighten their belts. The faux urgency about “fixing the debt” should be revealed for what it is. A bait and switch tactic to pass on, under the guise of cutting “entitlements,” the mounting costs of wars, regressive tax cuts (most of the Bush cuts were made permanent on Monday), corporate welfare, and bank bailouts for Wall Street’s ill-guided monetary speculation

Worst of all, the bluster about the need to share the fiscal pain—delivered in the pithy, coercive invitation to “Come Together” inscribed on Starbuck coffee cups–is a distraction from the debts that really needs to be fixed. These are the ones that are weighing down so heavily on the shoulders of the living. A government that will not protect its citizenry from the onerous harms imposed by creditors has all but forfeited its legitimacy. This may be the real lesson to emerge from the coming rough-and-tumble over raising the debt ceiling. Let’s make sure that we use the occasion to broadcast that the 99% has been bumping up against its own debt ceiling for some time now.