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They’re Going to Cut What?!

The Editorial Board
January 7, 2011

Deficit Cutting as Class Warfare

An Editorial

“If you rub elbows with a rich man, you get a hole in your sleeve.” — Yiddish proverb, quoted by Khayim Zhitlovsky in 1921

Bill Clinton left the White House in the first month of 2001 with a surplus in the national coffers and with the gross national debt, as a percentage of the Gross Domestic Product (GDP), decreased from 66 to 56 percent. George W. Bush left the White House eight years later with a large deficit in the national coffers and a gross debt-to-GDP ratio increased to more than 83 percent. The main causes? There was Bush’s $800 billion (and rising) cruel fiasco of a war in Iraq, and billions more spent on bribery in Afghanistan. There were those tax cuts for the wealthiest crust of Americans, which yielded trillions in revenue losses over the past decade. There was a constant increase in healthcare costs (and in mass frustration with the bumbling and complicated insurance system that helps drive those costs up). There was a 100 percent permanent increase in the cost of oil and oil products, which drove up the profits of Exxon and other oil giants while ruthlessly sending working Americans further into debt. Finally came our whopping recession, arriving like a tornado during Bush’s final months to shrink tax revenues and expand safety-net spending. After thirty-plus years of financial deregulation, Wall Street divorced itself from economic reality altogether in the housing derivatives market and brought American prosperity to its knees.

And now our leaders propose to cut the deficit by $4 trillion over the next ten years. Sensible economists, of course, are protesting that now is not the time for cutting back on government spending, not when nearly 10 percent of the workforce is officially unemployed and 17 percent have less work than they need. But never mind Paul Krugman — let’s see what the magically bipartisan Bowles-Simpson Commission has to say...

What’s that, Erskine Bowles? A corporate income tax cut, coupled with a gasoline tax of 15¢-per-gallon?

What’s that, Alan Simpson? You want to add two years to the retirement age for Social Security and lower Medicare payments?

How about you, Robert Gates? You want to curb military pay and charge veterans more for their health care?

And you, Mr. Obama? You’re freezing the pay of federal employees?

Anyone who has read the progressive press or even the New York Times in recent years knows the outrageous statistic: that one percent of the population has garnered nearly all of the wealth increase of the U.S. for the past quarter century. According to the Survey of Consumer Finances, sponsored by the Federal Reserve Board, 1 percent of American families now owns 34 percent of the nation’s net worth, while the bottom 50 percent owns less than 3 percent. Yet now, with all that wealth tucked away, we’re being asked to “share the sacrifice.”

Oh, there’s a deficit, all right. A deficit in meaningful leadership. A deficit in political courage. And a deficit in class consciousness, among everyone but the multi-millionaires, from sea to shining sea.