The corporate mouthpieces are telling us that “entitlement” programs like Social Security, Medicare and Medicaid must be cut to reduce the federal budget deficit. They tell us the deficit is the people’s fault and we have to be impoverished to pay it off. They tell us that “austerity” will create jobs. These are all lies.
The $85 billion in “sequester” federal budget cuts that went through March 1 (the first of 10 years of cuts) are going to hurt and kill people, especially the unemployed and the poor, and cost jobs. And even worse cuts lie ahead. As we go to press, the Democrats are trying to strike a “grand bargain” with the Republicans to cut entitlements in exchange for minor tax increases on the wealthy.
The truth is the deficit developed over the last 40 years primarily as a result of tax cuts, loopholes and bailouts for the rich and the corporations, and a vast hike in military spending. U.S. military spending rose 80 percent from 2000 to 2011. The military consumes almost $1 trillion a year out of a $3.6 trillion budget. And though sequestration would cut $1 trillion in military spending over the next 10 years, the military budget would still rise by 20 percent over that period.
Almost half the 2001 Bush tax cuts went to the richest 5 percent. According to Mother Jones, “Between 2001 and 2010, the Bush tax cuts added $2.6 trillion to the public debt, 50 percent of the total debt accrued during that time. Over the past 10 years, the country has spent more than $400 billion just servicing the debt created by the cuts.”
To sum up: The corporate ruling class launched the permanent “war on terror,” went on a military spending binge, and borrowed trillions to pay for it. Add in the cost of bailouts and subsidies to big business, tax cuts for the rich, and the reduction in tax revenues caused by the recession, and you have a giant deficit.
The bulk of the public debt that was sold to finance the deficit is held by large banks, insurance companies, large corporations, wealthy individuals and central banks around the world. We are being told that the wealthy bondholders must be paid, and the people must go hungry to cover the bill.
Here’s the facts: The people didn’t cause the deficit and there’s no reason we should pay it off. And the deficit didn’t cause the economic crisis, so austerity won’t solve the crisis. It will make it worse. At the root of the crisis is labor-replacing technology that is eliminating jobs and destroying the markets for goods and services in the process. The elimination of jobs means the death of capitalism, and the crisis is about to get worse. We need a new economic system (a cooperative society), not austerity.
In the meantime, let’s take money from the military, the rich and the corporations to serve people’s needs and put people to work. And let’s get busy building a political party that represents the people, not the corporations.
Such a party will be a step forward in the fight for a new society that is run by and for the people, where no one is in poverty and everyone has a chance to contribute and reach their fullest potential. Time to take the offensive. The future is up to us.
