You’re pretty stupid if you think this debt ceiling debacle is about you or me. Chances are you are just like me and are nowhere near being wealthy. We don’t count in this whole debt ceiling debate. Sure, we will suffer if the debt ceiling is not raised: we will probably double-dip into another recession, interest rates will rise on all our loans, the world markets will stumble (hence worsening our situation), and your cat will croak. But though we will curse our lame-ass government for not doing its job and wreaking havoc on us, we are not at the center of the debt ceiling debate. The filthy rich are, and you should know how and why they are in a squeezy place right now.
We like to think that this society runs such that our legal system, our police, and our military are set up to defend all of us good citizens in the name of good ethics. We want to believe that they are set in place to uphold communal morality, the rightful place of fairness, and the pursuit of everyone’s happiness. Wrong. It is set up to protect wealth, plain and simple.
· For those who have plenty of wealth, the legal system is on your side. With enough money, you can buy your way to being legally blessed.
· Laws themselves are made so that anyone trying to take wealth from someone else in any way, shape, or form is “wrong.” Oh, immigration reform comes to mind as a prime, in-vogue example. But all the laws about private property, fraud, domestic disturbances, hacking, identity theft and more are meant to protect wealth and the people who own that wealth.
· The police are the local arms of the law to enforce these wealth protection measures. Ever notice that the police pay A LOT of attention to the poorer parts of our neighborhoods and cities? You know, gotta keep the riff-raff under control so that wealth can sleep well.
· The military are the national and international arms of the law to enforce these wealth protection measures. Ever wonder why our military is so invested in the Middle East? Answers: oil wealth and protection from terrorists who want to take and harm our wealth.
Who really benefits most from these services? The wealthiest of course! The wealthiest want these services running quite smoothly and in accord with their interests (ahem, corporate, finance, and tax laws, cough cough). Those who have more, have more to lose. However, who shoulders most of the cost of these services? We do. Everyone who is not the wealthiest. There are so many tax loopholes for the wealthiest of the wealthy and capitalists to pay little (or even nothing!) in taxes, leaving all of us piddly-pids to fund the very system that allows them to amass their wealth and protect it. As of 2007, over 80% of federal tax revenues came from income and payroll taxes – OUR income and payroll taxes! Thus, the really wealthy have a great gig going, which is why this debt ceiling thing is creating quite the kink for them.
The Dems want to raise the debt ceiling with spending cuts and increased revenues. “Increased revenues” is poli-talk for raising taxes. Specifically, Dems want to raise taxes on the wealthiest of the wealthy (and so do the vast majority of Americans for that matter) and close a slew of corporate tax loopholes. The wealthiest certainly don’t like that! So that option blows for them.
The Repubs want to raise the debt ceiling (well, the saner ones do…), but they want to do so ONLY with spending cuts. They “no way, no how” want to repeal the Bush tax cuts on the wealthiest nor increase taxes on corporations. They would rather default than increase taxes on the wealthiest. Why? Because the wealthiest have their paws in deeper with the Repubs than the Dems, and no new taxes has been the mantra. That has worked well for the wealthiest in the past because they firmly have someone in their corner. But the Repubs’ tune is not so sweet for the wealthiest at the moment. No matter what, the filthy rich need the debt ceiling raised for the possible damage that might happen otherwise; they’d be hit hard if the economy tanks again. So the wealthiest aren’t so taken with the Repubs on a possible default. Wall Street is speaking loudly that the debt ceiling must be raised.
Putting all this together, here is the story. The debt ceiling debate has stalled over the Dems’ insistence of raising taxes on the wealthiest. If the Dems get their way, the wealthiest will have to pay more taxes. If the Repubs hold strong against the Dems, the debt ceiling will not be raised and havoc might leak all over the economy and the markets to the detriment of the wealthiest. That is the squeeze the filthy rich are in. Should they just take the increased tax rates so that the debt ceiling is raised (the safe bet), or should they hope that the Repubs will prevail? It’s a true gamble.
The point not to overlook is that this gamble is squarely a game being played with the wealthiest in mind. Everything in our society revolves around the wealthiest. Why would this be any different? If our political system, if our economy, if our entire infrastructure weren’t focused on the filthy rich, we wouldn’t be in any hot water right now. Did you know that if the Bush tax cuts were never put in place that we wouldn’t be in any financial crisis right now whatsoever? And that’s counting the two wars we are funding. The wealthiest want to continue living their lifestyles such that they continue to make money hand-over-fist and have us pay for all the services and infrastructure that protect that wealth. That is having the cake and cookies and eating everything in the bakery to boot!
The only way WE win (that is, the non-wealthiest) is if the Dems win this thing and the debt ceiling is raised because our government agrees to cut spending and increase revenues (i.e., increase taxes on the rich).
Regardless, why shouldn’t we raise on the wealthiest anyway? If this society revolves around them, shouldn’t they bear the biggest brunt of its functions? Hell yeah!
UPDATE (8/1)
The Dems cave again! A deal has been struck between Obama and top Repubs to raise the debt ceilings with a bunch of provisions to cut spending. ONLY SPENDING!!!!!!! What horseshit. They just couldn’t get ANY tax increases for the wealthy in the deal, could they? They couldn’t close any corporate tax loopholes, could they? The filthy rich will be partying tonight!!
We are but pawns in Richie Rich’s game. Call me the “red token.”
A good start but you have to take it further.
ReplyDeleteRepealing the Bush tax cuts or closing corporate tax loop holds will not solve the problem of the national debt. A combination of tax increases and reduction of entitlement programs have to be a part of the solution, if there is one.
Over the next 10 years the government will spend $45.7 trillion. That includes the $25.8 trillion in mandatory spending on programs such as Medicare and Social Security and the $14.5 trillion in spending on programs that Congress appropriates each year – called discretionary spending – that makes up the rest of the federal government from the Pentagon to food stamps.
Revenues are made up of individual income tax ($19.9 trillion), corporate income taxes ($3.9 trillion), Social Security taxes ($12.2 trillion) and other revenues ($3 trillion). The difference between revenues and spending for the next ten years is about 6.7 trillion.
As you can see from these numbers, we need both reduction of spending on entitlement programs and increase in taxes across the board. The Dems will have to reduce entitlement programs and the GOP will have to raise taxes for any plan to work. They are both just kicking the can down the road until after the 2012 elections.
However, the current debt of 14 trillion (still increasing) remains.
Here are some facts, 53 percent of this debt is owned domestically. I have a 1,000 US Treasury T bill so Uncle Sam owes me. The rest of the debt is owned by foreigners. China owns about 9.8, Japan 9.6 and England 5.1, so US owes a lot of money to the Queen. The oil nations own 2.1 percent. We owe Brazil 1.2 percent.
Thus, the problem cannot be solved by simply taxing the rich more or removing corporate loop holds. Deep cuts have to be made in entitlement programs! The GOP will have to give in to an increase in taxes on everyone, not just the rich. Wall Street has to chip in!
Americans will just have to get used to paying higher taxes at local, state, and Federal levels period.