Being Responsible vs Economic Anarchy?

In the late 1960s I led a discussion at a California junior college regarding the then current condition of California’s public schools. This was the era of the SDS, the Black Panthers, the Weather Underground and other militant, anarchists, groups that were making a name for themselves. In the spirit of that time, many of those participating in the discussion were of the mindset that the state’s schools simply needed to be shut down, torn down, and rebuilt from the ground up. It would result in educational anarchy, a decades worth of young people might not have access to any formal education, but many present believed that out of the mayhem would arise a new and much better public education system. 

When I observe what is going on in Washington today, regarding the nations economic problems, it seems that radical conservatives, the Tea Party, have adopted the position of yesterday’s Weather Underground. Shut the damned thing down, set it on fire, and maybe out of the ashes an economic-political phoenix will arise that is of their design and under their control.

The radical right appears blind to what the vast majority of economist, regardless of economic persuasion, think devaluation and default would lead to. They seem willing to risk devaluation of America’s credit rating in spite of the genuine threat of increased interest costs to every individual, family or business needing to borrow money.

They appear willing to accept what would befall the nation’s and world’s economies if America, for the first time in its history, were to default on its debts. The US dollar is the principle reserve currency in the world. The world’s business is conducted by the exchange of the US dollar and if the nation whose good faith and credit backs it defaults, the economies of the world would quickly collapse. Especially given the already weakened economic conditions of so many nation’s economies.

I don’t know what the future will hold or what the best way to get out of our current situation is. But, I’m pretty sure that any solution that doesn’t get us into 2013 and a post-election environment, won’t produce any meaningful fix. We have to negotiate in a time period where the politicians aren’t thinking about their own reelections and who will occupy the White House next. We also cannot make changes that are so monumental and abrupt that they further wreck the economy. We slowly got ourselves into this and we must, just as slowly, get ourselves out.

There also has to be a genuine acceptance of putting “everything on the table.” The Democrats can’t refuse to make the necessary “tweaks” to entitlement programs to make them solvent and the Republicans can’t continue deferring to defense contractors and keeping military expenditures off the table. There also can be no solution that doesn’t include increased revenue and that, in my mind, should include reversing the Bush tax cuts on both the middle-class and the wealthy.

Most everyone agrees that the federal tax code is far too complex and full of loop holes. Any fix will have to include cleaning up the tax laws and plugging up the escape hatches that corporations like GE have, for years, used to avoid paying any Federal taxes.

Since every tax exemption, in reality, is a tax cut, possibly we need to begin taking a hard look at some of the common exemptions that have become sacrosanct for many Americans. We could take a second look at child deductions, mortgage deductions, interest deductions, etc. Possibly we should consider placing a minimal tax on even the poorest Americans so they feel they have a stake in what the politicians are up to. At the same time why shouldn’t unearned income be taxed at the same rate as earned income? Why should a person who does nothing but clip coupons from dividend payments not pay the same tax rate that a guy who erects steel on a New York skyscraper?

In the end, the Tea Party and their willingness to dynamite the economy for their own ideological purposes, needs to have their fuse dampened. The GOP needs to become a real party again in the tradition of Teddy Roosevelt and Dwight Eisenhower. Men who were Republicans for all the right reasons and not afraid to tell the power lobbies and their corporate backers to back off.

And, the Democrats could take a few lessons from their past. They, for decades, have declared themselves the party of the people, but in recent years they’ve forgotten too many of the people in exchange for the campaign dollars the fat cats are more than willing to pony up.

There are no innocents in what we as a people face today. Both major parties have played a role in getting to where we are and both need to begin acting responsibly and doing what is best for the nation and not what is politically expedient for themselves. Both, also, need to stand up to the insanity represented by the extremists on the right. Just like in the 60s it would have been insane to have bulldozed our school system it would be just as insane to permit the good faith and credit of America to evaporate for the sake of political ideology and gain.

We the people aren’t innocent either. For years we have bought homes we couldn’t afford, bass boats we neither need nor can afford, purchased 10 mpg, $40,000 vehicles financed for seventy-two months, maxed out too many credit cards, and leveraged ourselves way beyond our means to pay. All the time, turning a blind eye on what Wall Street bankers and brokers were doing to tighten their grip on our politicians and the largest upward transfer of wealth since the late 1800s.

 

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