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Progressive Failure in Debt “Crisis” Debacle: Looking to the Future


The debt crisis brouhaha recently seen in Congress offered opportunities to the progressive forces of which we failed to take advantage. Both Democrats and Republicans have taken a beating in subsequent polls for their behavior, but to date, there’s been no noticeable turn to the left of the Democratic Party. 

Moreover, the agreement that finally was passed and signed by President Obama actually did little to solve the problem. This charade will re-emerge later this year, and will be even more disastrous. It will continue the attacks on the “middle class” and the “have-nots” below them across the board, leaving the rich and their allies basically untouched. This will give us another “opportunity,” but only if we recognize why we did so poorly in this first round.

I argue there are three issues that must be addressed:  the debt situation itself, the scope of our analysis, and a program bold enough to confront the real issues.

The debt situation itself

The United States government really does have a debt problem. The reality is that the US has been politically unwilling to raise the revenues to cover its expenditures.

Every year, the Federal government proposes an annual budget, which sets government procedures and policies, which include expenditures and income. (It’s basically no different than a family budget, yet with a LOT more zeros!) After the end of the fiscal year (on September 30), the government determines whether it ran a surplus or deficit for the year. Except for the last four years of the Clinton Administration, the government has been in deficit every year since 1970.

However, these surpluses and deficits are added into the cumulative account of surpluses and deficits, known as the National Debt, and that has been exploding over the past 30 years. From 1789, when this country was founded to 1981 – from the beginning of George Washington’s term to the end of Jimmy Carter’s, a period of 192 years – our national debt did not reach $1 trillion dollars: it actually was $907 billion, or roughly $ .9 trillion (hereafter, T). This included debt from the War of 1812, the Civil War, World War I, World War II, Korea, and Vietnam, as well as everything else carried out by the government, such as rural electrification under the Tennessee Valley Authority. However, with the election of “fiscal conservative” Ronald Reagan and with no major wars, our National Debt grew from $ .9 T to $2.7 T between 1981-89: the National Debt doubled in eight years! It has continued upward – with the major exception of the second Clinton Administration which left surpluses – to where it is now over $14 T. Before the big budget “deal,” it was expected that the National Debt would reach over $29 T by 2021.

So, not only was the National Debt growing exponentially, but this also means that the amount of interest payments needed to cover the interest due investors – sort of like the amount needed to meet one’s “monthly minimum” on our credit cards – was increasing as well. Thus, even more of the budget was going to have to be devoted to paying off investors, including a number of foreign governments, although up until the present the Federal Reserve’s efforts to keep interest rates low were very effective.

Something had to be done; hence, the effort to address the debt.

However, what got purposefully hidden in the process, especially by The New York Times, was that this debt crisis really only developed since 1981. And that over $10 T of this debt was due to military-related expenditures, for operations (including our multiple wars) as well as weapons systems. And, needless to say, the Times didn’t bother to point out that the US spends more money every year than our 14 closest military “competitors” combined, and almost as much as every other country in the world combined.

The opportunity to place this whole nightmare into an "Empire or our people" frame to help people understand what really has been taking place was never seriously advanced as far as I can tell, and certainly not on a sustained basis.

Progressives' scope of analysis

What explains this failure on our part? Quite frankly, it was the “national” lenses worn by most of us, as well as by many of our most prominent researchers and analysts.

We, as Americans, are taught throughout much of our schooling that the United States is an “exceptional” country; that we operate differently – and better! – than other countries. This suggests quite strongly that to understand what is going on in this country, we need only to focus on developments in this country.

In reality, the idea that the US is “exceptional” in this way is a lie. Ever since Europeans first came to this country, developments in North American have been part of a global process: we affect other countries and we are affected by other countries.

This can be seen particularly when we look at US foreign policy since the end of World War II. Basically, the US has been trying to dominate the world, trying to ensure unimpeded access to every bit of the globe for multinational (mostly, but not totally, US) corporations, regardless of impact on human beings and/or the environment. Held back by the Soviet Union from 1945 until its demise in 1991, the US emerged from the “Cold War” as the single dominant country in the world; a dominance that was basically uncontested until “W” decided to invade Iraq in March 2003.

To attain this level of dominance, the US created an Empire. This was not an obvious empire such as the Romans established, but was an empire based on political (including militarily), economic, and cultural domination over other countries and their peoples. This form of Empire benefitted the US:  the advantages were greater, while the direct costs were lower.

However, over time, more and more countries have reached a level of development that has resulted in increased competition with the United States, challenging it in one way or the other, especially economically (think of China, for example), but sometimes politically (like Venezuela under Hugo Chavez). While not necessarily coordinated, these increasing challenges have been reducing the United States’ power to shape world events as it had. Hence, the increased military-related spending over the past 30 years as the US elite has attempted to compensate for their reduced standing in the world.

And whether one accepts the analysis of a US Empire or not, the overall reality is that to understand what is happening in the United States, developments must be placed in a global context. I'm not saying that everything is caused by external forces. I am saying, however, that we have to recognize that the US is located within, and affected by, global processes, and to ignore them means that we only get a partial and incomplete understanding of things affecting our people.

This brings me to comment on the analyses provided by people like Paul Krugman and Dean Baker, who are probably two of the most progressive economists that have a wide public presence. I have not read all of their work, but I've learned from both, especially Baker.  Both have provided, over time, excellent analyses of various, specific public policies, and Baker’s work on the housing crisis has been exemplary.

However, I cannot remember seeing either of these men write abut the debt “crisis” from a global perspective. And I specifically have not seen either writing about the military-related expenditures, and their impact on the budget and the National Debt. And without that, one simply cannot explain how the National Debt has increased over 14 times in 30 years.

Now, it could be simply that I am wrong. However, while my Ph.D. is in sociology and not economics, I've been periodically examining the changes in the global economy and their affects on American workers. In 1984, I published my first article in a (student-run) academic journal. Already by then, I concluded that US corporations were outsourcing labor-intensive work overseas, and replacing US-based workers with computers, robots and other automated equipment; for those who were able to keep their jobs in the US, wages and benefits would decrease over time as unions were weakened and corporate power expanded. Unfortunately, this analysis has become even more accurate over time. (The median wage in real money for a US production worker in 2006—those of the bottom 80% of the workforce—was lower than her/his contemporary in 1973 once inflation was removed, according to Krugman.) My latest article, presented in the US but published in 2009 in a peer-reviewed journal in India, shows that the family incomes of the lowest 80% of Americans actually decreased between 2001-05 (the first G.W. Bush administration)—and the analysis stopped just before the Great Recession so the results were not affected by the downturn. (Available on-line at www.zmag.org/znet/viewArticle/21584.)

The point I'm trying to make here is that to understand developments in the US, we specifically must include a global perspective; and that has not been done sufficiently to date.

A proposed program

I think progressives need to advance a bold program if we are to have a chance to change the scope of the discussion, much less win the majority of Americans to our side. To do this, any realistic program, in fact, must be bold—no half-stepping: it must gain the attention of the American public. It must include a global perspective. And it must be based on a realistic analysis, no matter how possibly controversial it may be.

My proposal: to cut US military-related expenditures by 90 percent, this year.

My god, we can’t do that, you think. But why can’t we? Nick Turse recently published an article, pointing out that the US military is currently operating in over 120 countries, in addition to our “known” wars in Iraq, Afghanistan, Pakistan, Yemen and Libya (http://www.tomdispatch.com/blog/175426/tomgram%3A_nick_turse%2C_uncovering_the_military%27s_secret_military/). Despite what we’ve all have been taught about the US having a positive or benign role in the world, the reality—as William Blum continues to show (www.killinghope.org)—is that the US has been terrorizing people around the world since especially 1945. Cutting 90% of US military expenditures would benefit the large number of people around the world.

Yet that’s “hippy” stuff, one sniffs. However, I don’t think so. Large majorities of people are telling pollsters that the US needs to get out of Iraq and Afghanistan. And still with 10% of today’s expenditures, the US military could still protect this nation from any credible threat: think Trident submarines with their hundreds of nuclear-armed missiles.

If we progressives were to demand a 90% cut in military expenditures, with tax increases on those making over $250,000 a year, and demanding that these monies be channeled into providing jobs, revitalizing our towns and cities, providing national health care and enhanced educational opportunities for people, and confronting global climate change, we would have a program that would distinguish us from the two corporate parties, one that when realized could make a major impact on the well-being of Americans (and people around the world), and that we could use to reshape the political dynamics of the United States.

It’s either advancing something on this level, or we can keep complaining about the publicity given the Tea Party. It’s our choice.

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Kim Scipes, a former Sergeant in the US Marine Corps (1969-73), is an Associate Professor of Sociology at Purdue University North Central in Westville, IN. His latest book is AFL-CIO’s Secret War against Developing Country Workers:  Solidarity or Sabotage?  (Lanham, MD: Lexington Books, 2010), which will be issued in paperback in August 2011. 

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