Tag Archives: debt

Debtors and lenders.

We’re watching as the richest country in Europe (a.k.a. Germany) is pressuring one of the poorest countries in Europe (a.k.a. Greece) to accept an even deeper regime of austerity than what they have endured up to now, with massive unemployment, economic contraction, and increasing (not decreasing) debt. This is a political effort, not an economic one. Economically it makes no sense; crushing the Greek economy will only harm the Eurozone. The German chancellor is playing to a domestic constituency convinced that Greeks deserve more punishment because they are bad, lazy, corrupt, etc. That’s a deeply nationalist attitude, and I don’t know about you, but German nationalism makes me a little nervous.

Guess which evildoer the Greeks are equating with the GermansThe irony, of course, is astounding. When it faced crisis in the early 1950s, Germany’s creditors – including Greece – agreed to write off 50% of its debt and postpone the other half, allowing Germany to pay it back on a 30-year schedule. Pretty decent terms, considering how Germany acquired much of its debt … namely destroying an entire continent, killing millions, and brutally occupying much of Europe – again, including Greece. Ancient history? Only to American news outlets like NPR’s Morning Edition, where this week correspondents snickered about how Greeks see one German official as a kind of “Darth Vader” figure. (Note to NPR: does Darth Vader’s helmet remind you of anything? Is it possible the Greeks are equating the Germans more with – I don’t know – the murderous German occupiers of the 1940s than with the cartoonish pop-culture Nazi knock-off from Star freaking Wars?)

Then there’s Puerto Rico. Another debt crisis, with no sign of assistance forthcoming from its overlords in Washington. The back story on this is instructive. Puerto Rico has very little room to maneuver economically. It doesn’t control its own shipping. Goods shipped to the island from any nation must first make for Florida and be transferred to American ships before they can be unloaded in Puerto Rico. Just listen to this interview of Nelson Denis on Sam Seder’s Majority Report podcast for the full story of how this island has been screwed by the U.S. again and again. Though it sounds depressingly familiar, I had not heard this history before.

There’s such a thing as odious debt. We just need to recognize that fact and allow countries that have been skull-fucked by us and our allies to start with a clean slate.

luv u,

jp

Six of one, half-dozen of the other.

Consider this an open letter to the Congressional “Super Committee,” or gang of twelve – whatever you may wish to call them. (Keep it clean out there!) While you are considering how best to shaft poor, elderly, and working people (employed and unemployed) to bring greater benefits to our nation’s rich, I ask – nay, demand – that you consider these items:

How we got here. I’ve heard a lot of people in Congress, as well as various talking heads, putting their spin on the orgy of ignorance that led us to the creation of your Committee, as well as the series of missteps that led us to Standard and Poor’s decision to downgrade the nation’s debt rating. The factual answer to those questions is simple – the Republican party, a wholly owned subsidiary of corporate America, was driven by its most radical faction (the so-called “tea party”) to manipulate the once mundane process of raising the debt ceiling for political gain. S&P’s judgment that our government can no longer make rational decisions about its debt is based on their recognition that, from now on, raising the debt ceiling will involve a similar political standoff.

The decision to politicize the debt ceiling legislation – really just an authorization to accommodate borrowing already mandated by Congress through the budget process –  has done perhaps irreparable damage to the faith and credit of the U.S. But even more importantly, it has backed us into a political process that is practically guaranteed to deliver to the G.O.P. precisely what they want: the gutting of Social Security, Medicare, and Medicaid.

Who owes what. I’m not happy with president Obama, but the notion that he and the Democrats are responsible for exploding deficit spending is ludicrous. As the New York Times reported recently, based on figures from the CBO and the Center on Budget and Policy Priorities, $1.44 trillion of the national debt can be laid at Obama’s door; more than $5 trillion is attributable to his predecessor, including the FY 2009 deficit of $1.44 trillion, set before Obama took office.  The Bush tax cuts have contributed $1.8 trillion; unfunded wars in Iraq and Afghanistan have pitched in more than $1.4 trillion. How is this an issue of “entitlements” … unless that term can be used to describe tax cuts for wealthy people?

Seriously… (and apologies to Barney Frank) … are we going to ask 90-year-old ladies living on less than $20k to do without cost of living raises while allowing those who clear more than $250,000 a year to keep an extra $30 per thousand? I think not.

luv u,

jp

Pay days.

Writing this totally on the fly, so try to read fast and skip over any errors in grammar (or judgment). Have a heart, will you?

Tax fraud. It was probably inevitable that, as the sunset for the Bush 2003 tax cuts approached, the chorus of whining from the well-to-do would begin in earnest. Now we are faced with the remarkable phenomenon of hearing politicians who identify the federal deficit as public enemy #1 argue forcefully for an extension of tax relief for millionaires that will add hundreds of billions of dollars to the national debt over the next ten years. I know Americans have a short memory, but some of you out there must surely remember the 1990s. Were rich people overtaxed in those days? They seemed to be living pretty high at the time. Then their president, W. Bush, had the audacity to deeply cut their taxes with one hand while he launched two pointless wars with the other. Having blown a huge hole in the budget, they now want to stretch it wider. Time to come in now, children. You’ve had enough fun.

Job one. The president has been speaking a bit more forcefully about the economy in recent days. That is good, but not good enough. We need a deeper, broader commitment to the notion of full employment in this country, and to back it up with some appropriate action.  Various T.V. pundits blandly claim that there is little government can do, but I disagree. The fact is, government has to take steps to provide incentive to industry to employ workers in this country. They could start with procurement. The entire Federal Government, including the Defense Department, should require all contracts to be fulfilled with U.S. labor. If we need it, let’s build it here. We’ve got the skills, the money, and a workforce more than ready to do the work.

Would this be in violation of our myriad trade agreements? I hope so. Then maybe we could dump out of them altogether. That is the commitment Obama needs to make. Stop making it easy to export manufacturing and other jobs. Use the power of the federal government to drive domestic manufacturing and service employment. And for Christ’s sake, if people are willing to work and can’t find a job, provide them with work.

There’s plenty that needs doing in this country. Let’s get it done… and put people to work at the same time.