We Don’t Want to be A Loan

In ye olden times, there were no bankruptcy laws. Merry Olde England provided seemingly-permanent hospitality to those who did not pay their bills. Debtors were detained in “debtors’” prisons (see above) until someone made good their obligations. Being in debt was simply a crime. In other societies, debtors were placed into forced and miserable labor until they “earned” their way to freedom, often shipped to distant lands. Many never made it out. Even today there are debtors’ prisons (try the United Arab Emirates on for size) for those who cannot pay their bills.

But there the only penalty for a nation that cannot control its need to borrow is a possible devaluation of the underlying currency and a massive ongoing tax burden on its citizens to pay the escalating and compounding interest (not to mention the need to pay down principal) of such sovereign debt. That tax burden cannot hold to sustainable levels unless there are equally massive cuts in government spending. Military expenditures are often held sacred, so the sacrificial lambs are government services, and usually these cuts fall most heavily on social programs, as well as infrastructure replacement or needed build-outs, government-sponsored research and education.

Government services tend to support the poor or provide a basic healthcare for as many people as possible, but as you can clearly see from GOP-dominated politics, getting people out of any form of protected healthcare (allowing no premium increases for preexisting conditions or complex ailments and eliminating aggregate cost caps on medical services) or any governmental support has become “job one” for the GOP-led Congress and the President.

Outgoing House Speaker Paul Ryan (R – WI) has made it clear that cutting Social Security, Medicare (screw the old folks!), Medicaid, food stamps (and other subsidies for the poor) and further limiting or eliminating the last vestiges of the Affordable Care Act (ACA/Obamacare) are GOP priorities for the coming congressional sessions. My June 22^nd blog, Medicrisis, details some of the recent Trump-administration efforts to unravel the ACA through administrative actions; Trump openly brags of the damage he has done to the program, an effort to provide healthcare to as many Americans as possible.

The Trump administration is also moving to a flank attack on the Affordable Care Act in the courts. “The Trump administration is urging a federal court to dismantle two of the most popular provisions of Obamacare, but to delay taking such drastic action until after the midterm elections this fall.

“Responding to a lawsuit from conservative states seeking to invalidate the Affordable Care Act, the Justice Department told a judge in Texas on Thursday that Congress’ decision to repeal the penalty for failing to buy health insurance renders unconstitutional other Obamacare language banning insurers from charging people more or denying them coverage based on a pre-existing condition.

“The Texas-led lawsuit filed in February claims that the recent elimination of Obamacare’s individual mandate penalty means that the whole health care law should now be ruled invalid. The mandate penalty was wiped out effective in 2019 as part of the GOP tax law passed late last year, H.R. 1 (115).

“The administration's [recent court] filing says it agrees with states bringing the suit that the individual mandate is unconstitutional, as are two of the law’s major insurance provisions meant to protect people with expensive medical conditions. With the filing, the Trump administration is asking the courts to wipe out protections that many congressional Republicans were wary of eliminating in their failed efforts to repeal Obamacare.” Politico.com, June 8^th.

Education Secretary, Betsy DeVos, continues on her mission to extract the federal government from supporting public primary and secondary public education across the land and is endeavoring to tighten up the student loan program to push more costs on post-high school education at every level. Donald Trump is formulating a wholesale transfer of infrastructure projects to the private sector, thus allowing for-profit companies charge the public for the use of increasingly numbers of bridges, highways, dams and other obvious public assets that have traditionally been funded through tax dollars.

But why is all this even necessary? We’ve massively increased defense spending, but it seems pretty clear that the underlying cause has to lie substantially on the GOP’s recent massive reduction in tax revenues, a tax cut that pretty much went to that wealthiest segment of America, in the midst of a great cycle of prosperity for the wealthiest in our country, who really did not need the windfall. What’s even worse, the pledge that that tax windfall would be used to create solid jobs has apparently fallen on deaf ears. Mostly it’s going into stock-backs and dividends, not new jobs. In fact, to make things worse, Trump’s tariff battle is already beginning to cost this nation in both manufacturing and agricultural jobs.

What makes this plutocratic earnings shift even more problematical is the impact on our national debt, noted above. “The tax cuts championed by President Trump are helping push the nation toward an unprecedented level of debt, heightening the risk of another financial crisis, according to the nonpartisan Congressional Budget Office… The budget office’s annual look at the government’s long-term financial outlook paints a grim picture, projecting soaring deficits in the coming years, with debt ultimately peaking at more than 152% of the nation’s gross domestic product.

“‘The prospect of large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges,’ Keith Hall, director of the budget office, said in a statement… The federal debt currently stands at about $15 trillion, or 78% of the size of U.S. economy. If current trends continue, it will roughly equal the size of the economy within a decade, the budget office said. The last time the debt burden hit that level was just after World War II.

“The biggest problem in the coming decade stems from last year’s tax cut. It is estimated to increase the deficit by more than $2.3 trillion over the decade… And that’s under an optimistic scenario. Under the tax law, individual income tax rates are set to increase sharply at the end of the decade, while corporate taxes remain low. If Congress allows that individual tax hike to take effect, the tax cut’s long-term impact on the debt will begin to fade after the next 10 years.

“But if Congress balks at that big tax increase — many members of Congress already have said they want to make the individual cuts permanent — the red ink would be even worse than projected, the budget office said.” Los Angeles Times, June 27^th. So if you think this country is being run for “most of us,” think again. If you are not in the top 5% of earners or wealth-holders, this ain’t your time or your country. Just keep writing those tax checks to pay the interest and principal on all that money you gave to some of the richest people on earth.

I’m Peter Dekom, and we have a form of government that is directed at benefitting a tiny minority of mega-wealthy individuals and companies… at the expense of everyone and everything else.