SAM URETSKY

Suffering Deficit Fools

One of the greatest mistakes that President Bush made was believing that the United States was so big, rich and powerful that it couldn’t be broken. He was wrong, and proved it. Then President Obama made the mistake of thinking that the situation was so dire that the Republicans would recognize the danger and work with him to fix the problem. He was wrong too.

President Bush famously said “There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on, shame on you. Fool me, you can’t get fooled again.” Still, President Bush fooled the American people twice, and President Obama seems to be among the most frequently foolish.

The latest is the proposal submitted by the co-chairmen of the National Commission on Fiscal Responsibility and Reform. The Commission was appointed on Feb. 26, which should have been late enough for President Obama to understand the economic problems he was facing, and modified his selections accordingly. The proposal isn’t a final report, it’s titled “Co-Chair’s Proposal” but the PowerPoint presentation issued Nov. 10 shows such a severe lack of understanding of both the condition of the economy and basic economics that it represents a national hazard.

Robert Reich, President Clinton’s Secretary of Labor and currently a professor at the University of California at Berkeley, has made the point that in our current state, the American middle class is no longer large enough or well off enough to revive the economy.

The economy is ultimately driven by demand, by people with money to spend. When there are buyers, companies increase production, buying equipment, supplies and hiring people. When there are no buyers, there’s no reason to expand production.

With growing unemployment, underemployment and consumer debt left over from the heady days of yore, the remaining middle class is no longer capable of buying much more than a dozen eggs and a container of milk. Among co-chairmen Erskine Bowles and Alan Simpson’s dumbest ideas is the retreaded notion to cut back on Social Security. Of people aged 65 or older, over 30% receive 90% or more of their income from Social Security — and nationally, about 17% have no income other than Social Security.

In Louisiana, hotbed of conservatism, over 56% of the elderly would be below the poverty line without their Social Security checks. Alabama, Texas and Florida come in close to 50%. Co-chairman Simpson, who called the AARP the “greedy geezers of America” and described Social Security as “a milk cow with 310 million tits,” seems to have a low opinion of his fellow Republicans.

One of the key proposals of the Bowles-Simpson plan is to raise the eligibility age of Social Security to rise with average life expectancy. But average life expectancy rises with income, so that this, like so many of their other notions, is biased in favor of the well off. Also, people with desk jobs can work longer than people doing heavy manual labor, assuming they can stay employed.

Some of the other proposals, like “Integrate children of military personnel into local schools in the United States,” don’t seem too bright either. Are the local schools going to pick up the extra students without asking the federal government to pick up the costs? Then there’s paying for the tax cuts for the top earners by cutting the Earned Income Tax Credit so that people with full time jobs can still be living in poverty.

Again, this isn’t a real report — it’s just the suggestions of the two co-chairman, neither of whom seem to understand that the best way out of the deficit would be to expand the economic base — rebuild the middle class so that fewer people need help and more people are paying taxes.

The well-off may be called on to give up their tax cuts and corporations may be called on to bring jobs back. (N.B. — the Honda Ridgeline truck uses engines and transmissions built in the United States, albeit in non-union factories; GM trucks use transmissions from Canada and Mexico. Cadillacs for the Chinese market are built in China, so shouldn’t cars built for the US market ...?)

Suggest that the wealthy pay a fairer share of taxes and you’re accused of class warfare — but we’ve had a class war, and the rich won. Without a Marshall Plan for the middle and working classes, the United States is sunk — and Bowles-Simpson would just speed up the process.

Sam Uretsky is a writer and pharmacist living on Long Island, N.Y. Email sdu01@mail.com.

From The Progressive Populist, December 15, 2010