Joseph Michaud writes (in “Runaway Debt threatens American Dream,” July 12th) that “fiscal conservatism, that is, paying one’s own debts, was an integral part of the founding of this nation.” This is not altogether true, since slavery kept generation after generation in debt to slave owners like Jefferson, whom he selectively quotes, and created enduring income inequality.
Poorhouses may have given way to austerity programs but, if we look closely, Republicans like Mr. Michaud are eternally fond of punishing the poor and minorities – even if the strategy doesn’t work. Rather than improving health, housing and education – things that would help the most – the Republican approach is to keep the poor in their place and accuse them of profligacy. This goes for people and nations, a connection Mr. Michaud draws himself.
Michaud cites Greece and Puerto Rico as poster-children for the sins of debt. However, from the beginnings of their associations with the European economic union, Greece, Portugal, Spain, Italy, and other Southern European nations were hobbled by an uneven playing field. Greece has actually cut its budget by more than 30 percent yet its economy has also shrunk by a third and unemployment has risen to 27 percent. Austerity has been a failure.
By law, Italian, Spanish and Portuguese companies must pay higher interest on credits than German counterparts. Consequently northern Europeans have more flexibility in pricing and financing than their Southern rivals and can be more competitive. These are some of the built-in inequities in the EU that no amount of “fiscal responsibility” can cure.
A century ago Congress passed the Jones-Shafroth Act which exempted interest payments on bonds in Puerto Rico from federal, state, and local income taxes. These triple tax exemptions created a Ponzi scheme that worked for a time because it was easy to refinance . Financial and banking deals were imposed on Puerto Ricans by American-appointed governors and corporations, the colony is still subject to whatever trade agreements the U.S. imposes, and trade with the rest of Latin America is limited by the Jones Act. Puerto Rico is also limited in its bankruptcy and refinancing options by U.S. law. But, by all means, let’s blame the victim.
Mr. Michaud bemoans the high number of people not paying into the system and the large number taking from it. However, he does not mention that among those paying no taxes are huge corporations like: Bank of America; Boeing; Chevron; Citigroup; ConocoPhillips; Corning; Exxon Mobil; General Electric; Goldman Sachs; and PG&E. Fiscal responsibility also means raising revenue to pay bills. But paying taxes is just not in the Republican vocabulary.
Michaud maintains that there are millions of healthy, young people drawing SSDI. Painting an image of a Welfare Queen sitting around munching on donuts, he writes that “the generous entitlement programs we have established to assist the needy are now serving as an enticement to avoid employment.” Mr. Michaud should get out of his office sometime and try living on the patchwork of assistance that troubled families have to. Reality experienced personally might change his outlook.
At least half of food stamp recipients live – and work – in poverty. With average hourly wages of $9 an hour, each Walmart employee costs taxpayers at least $1,000 per year in public assistance. Walmart alone costs the United States $6.2 billion a year. Walmart employees constitute the largest block of Medicaid and food stamp recipients in most states. One in six of Walmart”s 48,000 Pennsylvania employees are enrolled in Medicaid. Walmart is America’s REAL Welfare Queen.
Apart from the working poor, Medicaid enrollment has also risen due to the greying of America. Younger immigrants, rather than drawing on the social safety net, actually pay into it. Again, something Republicans might want to consider.
Michaud notes that three times as much money is spent on “entitlements” as on defense. Sadly, for decades we have had a defense budget – and then we have had a separate war budget, the Homeland Security and spy agency budgets, and the costs of caring for veterans from all our combined wars of choice. These costs combined – our war addiction – approaches the “entitlements” – which wage earners actually contribute to in addition to paying their taxes. Fiscal conservatives preaching “responsibility” never worry about programs like the F-35, which is a $1.5 TRILLION boondoggle. Or the projected $2 TRILLION dollars that care of Iraq and Afghanistan vets, now still in their twenties and thirties, will cost over their lifetimes.
It’s strange that Mr. Michaud’s piece included the phrase, “the American Dream.” Because of income inequality caused by Free Market fundamentalism, greed, and corruption, the American Dream is more distant than ever from the reach of our children and grandchildren. I only hope that we will restore some of that Dream to everyone – not just for the pampered and the privileged.
This was published in the Standard Times on July 28, 2015
http://www.southcoasttoday.com/article/20150728/opinion/150729577
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