The Budget Hoax: It's About Showering Wall Street with Tax Dollars

There’s a reason why it’s illegal to yell “Fire!” in a crowded theater. Motivated by fear, crowds can do very dangerous things.

And yet here we are allowing Congress to dangerously cut federal spending on which we all rely because, when Wall Street lobbyists yelled, “Fire!” about the state of our nation’s budget, we believed them. And now we are letting Congress trample on our future.

There is no Social Security crisis. And the extent of the federal budget crisis as a whole is being wildly overblown to scare us toward drastic measures rather than rational solutions.

We are being manipulated to give government handouts to the very same big banks and corporate scam artists that crashed our economy in the first place. We are told that what is good for big business is good for America. But these so-called “job creators” are only creating jobs for yacht manufacturers and maids. Check the math. The profits of our nation’s (and the world’s) largest corporations are rising, as are the salaries and bonuses paid to executives. Are they creating jobs? No.

Well, that’s not exactly true. I think Wal-Mart is hiring if you’re willing to work for $7.78 an hour.

Yet big corporations and their lobbyists have been manipulating our government -- both Republicans and Democrats -- to grease the wheels for big business while putting up more and more obstacles for working families, small business owners and homeowners. Yes, working families’ taxes are too high and yes, small business owners struggle under too much bureaucracy. But not big business and the super-rich. No, our government is designed to their advantage.

And so, at their behest, politicians of both parties -- as well as the media owned by the very same big businesses -- tell us the government is broke and our debt level is unsustainable and, therefore, we’re going to have to cut things like unemployment benefits and funding for public school teachers. Wall Street doesn’t care. They can afford private schools. But what are you going to do when your child doesn’t have a classroom?

There’s a reason the Founding Fathers designed things so that the federal government can borrow money and carry debt -- because, at times like these, that’s precisely what’s needed. When the economy recovers, the debt is resolved. For instance, economist Dean Baker writes:

In spite of the deficit hawks' whining, history and financial markets tell us that the deficit and debt levels that we are currently seeing are not a serious problem. The current projections show that even ten years out on our current course the ratio of debt to GDP will be just over 90 percent. The ratio of debt to GDP was over 110 percent after World War II. Instead of impoverishing the children of that era, the three decades following World War II saw the most rapid increase in living standards in the country's history.

Instead, big business interests lobbied for the extension of monstrous tax giveaways to the super-rich, which starved the government. And then they turn around and say government is broke and can’t afford to help poor and working families who are really struggling. It’s like Wall Street took a bat to our collective head and then turned around and said, “Oh, you look hurt!”

Similarly, Social Security isn’t in crisis. If you ignore the “sky is falling” fear-mongering long enough, you’ll quickly learn that Social Security is fully paid for through the next 30 years and considered sustainably solvent beyond that based on current revenue levels. If revenues go up (meaning, if the economy improves), Social Security will be in an even better position.