November 16, 2012
Beware a phony political crisis
Ever since Fed chair Ben Bernanke coined the term “fiscal cliff” earlier this year, the beltway media and chattering class have had a field day pushing the false notion that the United States is headed off a cliff. In reality, the showdown over looming tax rises and spending cuts come January 1, 2013 is a “manufactured crisis”, says AFL-CIO president Rich Trumka.
“The most frustrating thing about Washington, D.C., is the way political insiders create a self-reinforcing reality out of nonsense. Take what the media are calling the “fiscal cliff.” There is no fiscal cliff! What we’re facing is an obstacle course within a manufactured crisis that was hastily thrown together in response to inflated rhetoric about our federal deficit.
“But all the deficit chatter has distracted us from our real crisis—the immediate crisis of 23 million unemployed or underemployed workers.
“It’s time to protect Social Security benefits. It’s time to protect Medicare and Medicaid benefits. And it’s time to raise taxes for the richest 2%, to stop tax breaks that encourage companies to send jobs offshore and to close loopholes that allow some people and corporations to hide income in offshore tax havens.”
What’s all the fuss about, then?
The fuss is the result of the debt-ceiling debacle last year, during which House Republicans threatened to bankrupt the federal government to force a debate on the deficit after the election. Deficit hypocrites want to scare the country into accepting exactly what a majority of voters rejected just last week – extend tax cuts for the richest 2% of taxpayers by slashing the social safety net for the other 98% – including Social Security, Medicare, and Medicaid. The irony is that President Bush’s tax cuts – not our social programs – are the #1 driver of our country’s budget deficits.
This simple fact reveals the true intentions of “deficit scolds,” says Nobel Prize-winning economist Paul Krugman:
“It’s not just the fact that the deficit scolds have been wrong about everything so far. Recent events have also demonstrated clearly what was already apparent to careful observers: the deficit-scold movement was never really about the deficit. Instead, it was about using deficit fears to shred the social safety net. And letting that happen wouldn’t just be bad policy; it would be a betrayal of the Americans who just re-elected a health-reformer president and voted in some of the most progressive senators ever. […]
“Contrary to the way it’s often portrayed, the looming prospect of spending cuts and tax increases isn’t a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.’s attempt to take the economy hostage. And just to be clear, the danger for next year is not that the deficit will be too large but that it will be too small, and hence plunge America back into recession.”
Don’t believe the myth
In creating the phony political crisis of a “fiscal cliff”, House Republicans overplayed their hand. Not only did voters reject Romney-Ryan economics in the election, Republicans agreed to a deal last year that lets ALL the Bush tax cuts expire on December 31. NOTHING in that deal affects the “Big 3” of Social Security, Medicare, or Medicaid. That means that on January 1 there will be no cuts to those programs, and cuts to these programs should not be part of any new deal.
A bad budget deal for working families is no deal to be had at all, and all Congress has to do to avoid a bad deal is to do nothing at all. How easy is that? Come January 1, House Republicans will lose their leverage, and we can have a serious discussion about lowering taxes for 98% of Americans and reducing spending.
Sign our petition and call your lawmakers!
What should you do? Keep hammering home our message to your member of Congress.
1. Let the Bush tax cuts expire for the wealthiest 2% of Americans.
2. Make no cuts to Social Security, Medicare or Medicaid benefits.
Sign the petition: www.aflcio.org/ProtectOurFuture.