Misusing the Debt To Attack Social Security

Look out! The big story of the coming year is that the Republicans are coming after your Social Security and Medicare. The Republicans fought Social Security when it was founded; they fought it when it was expanded to include Medicare; they are still fighting the Obama health care program. They are going after Social Security under cover of a fiscal crisis. We may have some serious economic problems, specifically unemployment of almost 10 percent and a runaway financial sector, but we do not have a fiscal crisis.

The important point to remember – the Republicans do not care in the slightest about the debt and deficit. Both the Reagan administration and the Bush administration ran record-breaking deficits and VP Cheney maintained: "Reagan proved deficits don't matter." They really care about cutting Social Security.

Yet it is these same Republicans who have convinced the people that the greatest threat facing this nation is the federal debt and deficit and that the only way the country can be saved is to cut Social Security, Medicare and other parts of the social safety net. The baby boomers in particular are convinced that Social Security and Medicare will not be there when they become eligible.   This is all nonsense concocted to preserve the wealth that was seized since 1980.

The rich themselves don't believe there is any crisis. They continue to bid stock prices ever higher. To the rich and officially, the recession has been over for a more than a year. The only problem is unemployment but that just keeps wages down and profits up. And profits are way up, up, up. The markets are telling us that the corporate community is saying: what crisis?

The fiscal argument against Social Security is simple but flawed. The politicians argue, look at the national debt of $13.9 trillion with debt service of $3.5 trillion. Look at the federal budget: $3.5 trillion in spending, only $2.2 trillion of revenue and the consequent deficit of $1.3 trillion for the year. That is the largest deficit ever and it pushes the gross national debt to $14.0 trillion, which is 95 percent of GDP. Something must be wrong and, they say, that kind of deficit is certainly not sustainable.

The United States of America is not in fiscal crisis. All of those numbers are ginned up to create fear among the people and foment an attack on all government. Over a third of the national debt, $4.5 trillion is held by the Federal Reserve; we owe that money to ourselves. A third of the interest payments are therefore returned by the Federal Reserve to the treasury each year. The Federal Reserve buys up the federal debt and effectively retires it to create our money supply. That is what the Fed is supposed to do.

The fiscal crisis advocates are actually claiming that we as an economy cannot care for our elderly, educate our young or provide for our security. Yet the gross domestic product, in real terms, grew from $5.8 trillion in 1980 to $13.1 trillion at the beginning of 2010. That is an increase of 66 percent in per capita GDP. Admittedly, virtually all of that increase went to the top 10 percent of income earners. But that is the result of a corrupt political system that pays off to the wealthy.

The problem for the Republicans at this point is that they have fired up their base when "an aroused citizenry is the worst nightmare of tyranny." The Tea Party movement is the unintended consequence of their fear mongering. Their overblown crisis rhetoric convinced the Tea Partiers that the country is in danger and its members are rising in defense of their country. They really believe.

In the coming year the Republican party will call for cuts in spending as an excuse to cut Social Security. They will continue the same tactics and crisis mongering. They will again avoid the fact that the Bush tax cuts for the rich are even more important than spending as a cause of the deficit. They will ignore the fact that subsidies like those to the oil companies, agriculture and offshore tax havens are also important in causing the deficit.

Then, we will see the Tea Party, that "aroused citizenry," do its best to entangle the Republican Party in honest attempts to balance the budget and, maybe, rewrite the tax code. The Tea Party and the progressives have a lot more in common than either of them is yet willing to admit.

Politics is the most compelling of spectator sports – because winning and losing has consequences.