Kevin Drum misses the mark

I just saw this via Twitter. Mother Jones's Kevin Drum correctly draws our attention to the fact that a large majority of American adults don't want Medicare to be gutted. I find that unsurprising, but it's indeed worth pointing out. But he misses the mark when he suggests that it would be "interesting" to know how "people" (which people? which class? etc.) would respond to the same question were it paired with options such as "higher taxes, lower taxes, etc.". I quote:

I'd like to see a followup that paired each option with the taxes it would require. In other words, your options would be:

• Major changes & taxes about the same as today
• Minor changes & higher taxes
• No cost control & and significantly higher taxes

I'm willing to bet that the results would be roughly the same, with perhaps a chunk of the "no cost control" folks moving into the minor changes column.

But I might be wrong, so it would be worth finding out. These kinds of questions, after all, are pretty useless if they're not tied to anything else. I mean, who wouldn't be in favor of leaving everything the way it is if they don't understand that it might cost them more?

I have two things to say here. First of all, it's ideological and tendentious to put things in such general terms as "higher taxes" or "lower taxes". That's not how things work. The Republicans and Democrats, who've invested a lot of time and energy giving tax breaks to the rich in particular, know this. We need to know who is going to face higher taxes and who isn't. To remove class from the framing of the question is not to make the question more neutral. It is to skew it in a reprehensible way. It is to paper over very real (and, indeed, uncontroversial) facts about the way that wealth and income is distributed in our society. So we need to which taxes are to be raised, and who's going to pay them. Surely Drum doesn't think a flat-tax is better than a progressive tax. But if he thinks that, he should revise his suggestions since they have the same logic as a flat tax (i.e. make it impossible to only increase taxes on the rich).

Working class people justifiably worry about their taxes going up. Socialists don't dispute this. They don't like taxes as such. Now, to ask workers to sacrifice more in taxes isn't always a bad thing, depending on what they get in return (e.g. they pay more in taxes and get guaranteed health care, but cease to pay health insurance premiums that are much higher). But in general, it is a burden on working class and poor people to ask them to sacrifice more of their already small paychecks. Moreover they do all the work in this society and already pay their fair share... it's unjust and absurd to ask them to pay more. But for the well-to-do there is no comparable burden. We can use fancy economics language here: the law of diminishing marginal utility clearly entails that receiving $100 dollars when you're broke is of much greater significance than receiving $100 when you're Bill Gates. By the same token, losing $100 dollars is a tremendous burden to a poor person, but virtually negligible for Bill Gates. It is absurd to ignore all of this and talk abstractly about "higher taxes" as such, as though we were all already equal and on some level playing field wherein the question had the same significance for all of us.

Second, the original Medicare question was ideological as well. It frames things along a one-dimensional axis, where do nothing and do something are the options. I'm a socialist, and I probably endorse a "do quite a lot!" sort of position, but it's unclear that I share any common ground with Neanderthals like Paul Ryan who interpret "do quite a lot" to mean "gut Medicare like a trout". So the "major changes"/"minor changes"/"no changes" axis is already problematic. To be sure, we get some information from the question, since it is surely a more progressive position (in today's context, problematic though it is) to defend the Medicare status quo than to open it up to attack by reactionaries in both parties. But my point still stands: it is tendentious to frame things in this way, and it's not possible to express a preference for vastly increasing Medicare service in such a poll. That it is not on the political agenda right now is a separate problem. What the poll should try to do is find out what people really want- that way we can, in a non-question-begging way, determine the gap (which is sure to be quite large!) between people's aspirations and the reality of our political system.

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Making a Fetish of the Deficit

It is widely assumed in political rhetoric and newspaper articles that there is some intrinsic value that attaches to "balancing the budget" or "reducing the deficit". Some even go so far as to argue that this should be the fundamental goal of policy right now. That is flatly incoherent and irrational. Let me show why even the most hardened right-winger cannot coherently claim that deficit-reduction is an intrinsic good.

If the need to reduce the deficit is, as some say it should be, the most pressing and important task of policy makers, then it should trump all other concerns. Such deficit-hawks should have no qualms whatever about cutting services, closing public schools, letting bridges crumble, and so forth. But, even as hard-line as many of these right-wingers are about austerity, the question still remains: if deficit reduction is a goal that trumps all else, why not immediately end all spending on law enforcement, prisons, airport security, not to speak of the enormous amount of money spent on "national defense"? Why not shut off all public water utilities, turn off all traffic lights, and cut off all electricity in every publicly owned building in the country? Why not, in effect, plunge the country into complete chaos for the allegedly fundamental goal of generating a budget surplus?

Because nobody, not even the most hardened right-wingers, actually thinks that the mere existence of a budget surplus is necessarily a good thing. Nobody thinks that utter social collapse is an acceptable trade-off for a balanced budget. Because what good is a "balanced budget" if the government can't even fulfill its basic functions? What good is a budget surplus if society is in in complete disarray and the vast majority of people are made very badly off by it?

Thus, if pressed, nobody actually believes that deficit reduction is good-in-itself. At best, it is merely a means to some other goal (whatever that is). Even the ruling class has goals apart from balanced budgets; they could basically care less about balanced budgets themselves. So to fetishize deficit-reduction as an allegedly intrinsic good makes no sense, no matter what your politics are. Such fetishism is irrational because it puts the cart before the horse, it imputes value to something that simply couldn't have the kind of value imputed to it. It confuses means and ends. It is incoherent, because the fetishism of deficits clashes with other commitments that any rational person (yes, even right-wingers) has (e.g. the belief that the function of the state is to create the conditions for ruling class profitability, or that the function of foreign policy is to expand U.S. influence and hegemony abroad, etc.).

Thus deficit-hawking is seen for what it is: window dressing for other goals which are neither defended with argument nor made explicit. It is a red herring that distracts us from issues worth discussing (e.g. should taxes on the rich be increased? what is the basic goal of government in a just society? should the economy meet human needs or should it focus on profit?). In the Marxist tradition, we call such bundles of ideas "ideologies", since they have the function of making unequal power appear legitimate by some unsavory combination non-rational and rational means.

What deficit-hawks would really like to say is the following: we should cut social spending because it does nothing toward restoring profitability to the system and does nothing toward furthering dominance abroad. Whereas bank bailouts and foreign wars are good things, jobs and education spending is not. Thus, since corporate welfare, big ruling class tax breaks, and imperialist foreign policy do fulfill these aims, at very high costs to taxpayers, they are not criticized. But, of course, making an explicit case for imperialist war and corporate handouts is not an easy sell, since these goals plainly brush against the grain of the interests of the majority. Hence it is better to focus our attention narrowly on marginal questions of little significance (e.g. whether the government is "in the red" or not... because who is it that thinks, other things being equal, that going into the red is good?). Better to ask us to fetishize whether the "government is paying its bills like American families are asked to do" than to actually reflect on where revenues come from and where they are best spent.

This ideology is no less dominant in the Republican Party than it is in the Democrat Party. Obama is the most visible proponent of it in the US right now. His debate with Republicans is, basically, over who has the "best" plan for reducing the deficit. It is assumed on both sides that this irrational, incoherent fetishism is a good thing. Any rational progressive movement would challenge these basic assumptions, rather than falling in line, self-censoring and perpetually sending checks to candidates who reproduce these abysmal conditions.

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Obama's Austerity Commission Releases Plan

Details here. Nothing in it is surprising. Basically they want to slash taxes for the richest Americans while forcing the rest of us to work longer, retire later, and accept other punishing cuts to social services. This is the same kind of top-down garbage that has incited mass protests all over Europe.

Those fuckers want to lower the top marginal tax rate even lower than Bush did. In other words, they want it lower than it has been in more than a 100 years:

The top tax rate is currently 35 percent and is scheduled to rise to 39.6 percent in 2011. The commission would cut that rate to between 23 and 28 percent, while shaving between seven and nine points off the corporate rate.

You've got to be fucking kidding me. How, in the midst of the worst recession and budget crisis since the Great Depression, can it really be a serious proposal to reduce the already criminally low tax rates for the very richest?

Increasing the top marginal rate is the easiest way to bring in more revenue to offset the shortfalls caused by the crisis. It's money that is sitting idle in massive surpluses hoarded by individuals who, all by themselves, possess more than millions of Americans grouped together. It is obvious that the top marginal rate should be increased substantially, the only question is how much. But that's not even on the table: now the discussion is going to center on how much extra money to throw at the rich while we slash services for the vast majority.

For the rich and powerful, it is nothing but gifts, free credit, bonuses, and increased "swagger".

For the rest of us, it is layoffs, cuts in transportation, school closings, increased retirement ages, pay cuts, foreclosures and evictions.

The stupid report is titled "The Moment of Truth". Moment of truth my ass. We have the resources to expand services radically... there is no reason that anything needs to be cut, unless we play by the lopsided ruling-class logic that animates Republicans and Democrats alike. This is a lopsided class war against the majority of us.

As a slogan on a placard (being held up in the struggle in the UK) put it: Fight for Every Job! Resist Every Cut! Put People Before Profit!

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Balanced Budgets are Bullshit

It's been said before, and it's still true.

The ideological function of "deficit hawking" is clear: convince people, especially those who already have a preference for increased social spending, that the government is starving and must be scaled back considerably.

I hear this worry often from leftish-liberal people sympathetic to reforms like single-payer health insurance. They say something like this: "well, we simply can't afford that... what about the deficit and future generations?". Many liberals are obsessed with this: one thinks of the deficit-hawking talking points leveled against Bush by Democrats in 2006.

The political consequences of this widespread belief are deeply conservative. Once you convince people of this lie about balanced budgets, they're prepared to draw other invalid inferences, (e.g. "well, either the government goes into the red or we slash spending... hence we must slash spending). And the people I have in mind here aren't hardened capitalists or right-wingers: they are ordinary left-leaning liberals and "progressives" who actually want to see vastly increased spending on education, health-care, public transit, etc.

There are several important things to say here.

First, we must ask why the deficit is as large as it is. Put simply, the deficit is sizable for two reasons: 1) massive tax breaks for the richest of the rich over the last 40 years, 2) transfer of toxic assets and debt from the private financial sector to the Federal Government (i.e. TARP).

For more on 1) see this. We have much lower top marginal tax rates than many comparable capitalist nations in Western Europe. Also- even if we grant the "deficit hawks" their confused claims, we can still just say: if you want to balance the budget, then tax the rich because the surpluses they hoard are large enough to pay for the national debt ten times over. It has recently been estimated that the Bush tax cuts of 2001 alone have inflicted a $3 Trillion loss. The surplus cash is out there, it's simply being stock-piled by the rich. As Rick Wolff has argued, even a modest tax on "intangible property" (e.g. stocks, bonds, etc.) would easily cover the budget shortfalls facing state and municipal governments:

At the present time, the vast majority of US states and municipalities exempt intangible property from property taxes. That is, stocks and bonds are kinds of property not subject to the taxes on other kinds of property (land, houses, etc.). If we imposed a very low rate of property tax on intangible property, it would cover the present and anticipated fiscal shortfalls of US cities, towns, and states...If coordinated across all states and cities (perhaps levied and collected by Washington and then returned to states and municipalities), intangible property owners would have no incentive to move it from one place to another.

For elaboration on 2) read Joel Geier- "capitalist governments transferred private capitalist debt from banks and corporations to the state—losses were socialized for the public to pay for."

The second thing to say is that, contrary to prevailing dogmas perpetuated by both pro-business parties in the US, balanced budgets are not intrinsically valuable. There is no benefit, in itself, to having a balanced budget. If balanced budgets are valuable at all, they must be instrumentally valuable, that is valuable only as a means to fulfilling some other function or task.

Think of it this way: what should the function of government be? Most would agree that the function is to do certain things: provide infrastructure and certain services, create the conditions for people to flourish, lead free lives, whatever. You needn't be a radical to think that (although it's striking how radically anti-capitalist the conclusions are when you take seriously the idea that politics should be about creating the conditions for human beings to flourish.... but I digress).

Now, who in their right mind would say that the function of government is to balance its budgets? That is bass ackwards. It makes no sense. The function of government, even if you ask conservatives, is supposed to be to ensure liberty, provide certain services, etc. Nobody actually thinks, on reflection, that the function of government is just to balance its budgets.

Yet the practice and ideology of "deficit hawking" seems to assume precisely this. It fetishizes something that has no intrinsic value, in order to legitimate the slashing and burning of public institutions and social services.

Third, as I talk about in the link provided at the beginning of the post, the idea that there is something morally suspect about not balancing budgets is preposterous. Often this conservative complaint is made by way of the following analogy. "My family has to pay all of its bills at the end of the month, so the government should as well!" Two things on that: first, the analogy between the state in advanced capitalist societies and a typical bourgeois family unit is not a good one. Second, even if we grant the analogy, the argument still falls apart. As so many people are now realizing with the mortgage crisis, very few Americans actually own their homes (or their cars or college educations for that matter). Almost everyone debt finances those purchases. Likewise small businesses debt-finance much of their undertakings, just as larger firms do as well. Debt-financing is pervasive in contemporary capitalist societies, so it's a little dense to single the government out and claim that it is doing something illicit that "regular people" don't do.

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Priorities

The Democrats may lose their control of Congress in November. But they've had firm control of the White House, the House, and have held filibuster-proof supermajorities in the Senate for two years. This is not counting the fact that the Democrats had control of Congress from 2006-2008 as well.

During the time that the Democrats have had crushing majorities in the Congress, military spending has increased, while deep cuts and layoff have been made to the public sector all over the country. Democratic leaders, we do well not to forget, have recently been mulling over making deep cuts to Medicare and Social Security.

Just think about the following for a moment.

Obama's 2010 budget, titled "Restoring Responsibility" increased "official" military spending by over 6% from the bar set by Bush's 2009 budget.

That brings the total official military spending to $680 billion for 2010. If we include "defense related" spending, totaling over $300 billion, that brings the grand total very close to $1 trillion.

But wait, there's more.

As everyone knows, the US government spends billions each year in military/economic aid to, by and large, three countries: Israel, Egypt and Colombia. In the last 10 years, Israel has averaged about $2.5 billion a year, Egypt about $1.7 billion/yr and Colombia $1.5 billion/yr. Egypt and Colombia, of course, are ruled by repressive right-wing regimes who ruthlessly use state violence to insulate their governments from democratic challenges.

So add about $6 billion more to the bill. But this isn't the end of the story.

Let's not forget about the "National Endowment for Democracy". Created by Reagan in 1983, and ostensibly administered by private institutions, the NED is entirely funded by allocations from Congress, to the tune of a couple hundred million dollars a year. Obama increased the funds that the NED receives. Eva Golinger has done an excellent job of tracking the expenditures of the NED in Venezuela, where the US government routinely allocates millions of dollars to right-wing opposition candidates and oligarchs seeking to topple the Chavez government. This is basically the name of the game for the strangely named NED: destabilize societies abroad that challenge the dominance of the US empire and do the dirty-work previously undertaken by the CIA under the auspices of privately-administered "democracy building".

All of this money is spent while we're told that there is no money to spend on the things that matter. We're routinely told to accept cuts and layoffs as though they were facts of nature. We're encouraged, at every turn, to focus on the national debt and worry so much about the deficit that we are prepared to accept punishing blows to living standards, social services, public infrastructure, schools, transportation, and so on.

But we're told all of this while the US government, no matter which of the major pro-business parties holds power, spends non-negotiable sums totaling over $1 trillion each year on foreign war, occupation, weapons of mass destruction, anti-democratic aid to tyrannical governments, empire, and imperial activities abroad.

Shouldn't the people the United States, not a small ruling class of elites for whom imperial ventures abroad matter quite a deal, have a say in how this chunk of the social surplus is spent? If our society was democratic in any meaningful sense, wouldn't we have a way of impacting whether or not our government spends $1 trillion on war and occupation at the same time that it makes punishing cuts to already inadequate social institutions?

Our electoral mechanism gives us literally no say in this matter. Go ahead, select the one with the "D" or the "R", but either way the figures listed above are taken as givens.

If the Republicans take back Congress in November, what is really going to change? What will we have lost? What do the answers to those questions say about the Democrats and our system in general?

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Nice article skewering decifit-hawking

Read the article here.

What's all this "we" when people talk about the deficit? It's not as though Goldman Sachs talks in terms of "we" when they're deciding how to divide up quarterly profits. As Joel Geier put it in a recent ISR article, "The debt bubble has not be solved, it has merely been transferred from private hands to the state... The state nationalized private capitalist debt". Large capitalist firms externalized the costs of their risky speculative behaviors by moving their toxic assets from their rolls to the state. But they sure aren't externalizing their profits any time soon.

It's not as though there isn't lots of wealth in this society: the annual amount spent "rescuing" ailing financial institutions on the one hand, and in useless foreign occupation and war on the other, is enough to fully fund, many times over, things lie single-payer, plug state budget shortfalls, etc.

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