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.

Yet there are some who want to manufacture a crisis to ram through an ideological agenda. Wall Street has wanted to privatize Social Security for years -- not because they give a damn about improving our quality of life in retirement but because they want to get rich off the fees they could charge. For decades, big business has wanted to gauge workers of wages and benefits and undermine the right to collectively bargain. From Wisconsin to Ohio and elsewhere, they’re using the “fiscal crisis” as a fig leaf excuse to do so.

It’s a simple formula: Make a big fuss that the system is broken and that “reform” is needed to fix it. But in case after case, monied interests are using that formula to actually break things that were never broken -- to help themselves and hurt you.

Wall Street could tell the truth -- that they royally and recklessly screwed up and are too busy continuing to hoard profits rather than stimulate growth, and the only way to recharge our economy is with robust, public spending that creates demand. Ah, but that would only help people like you and me, who could get small business loans or jobs repairing roads, who could send our kids to good public schools and maybe even pay less to private health insurance companies. In other words, government actually doing what it takes to spend money and fix the economy would cut into the power and profits of big business.

If at this point you are arguing with me in your head, please note that you are siding with Wall Street fraud artists and against the interest of not only yourself and your neighbors but your children and your grandchildren for generations to come.

Those who are trying to convince us that our government is broke and cannot afford to borrow more are, consciously or unwittingly, reinforcing the vastly unequal society that we have become, where the size of the silver spoon in your mouth when you’re born matters infinitely more than how hard you work.

Yes, our level of national debt is in the long-term untenable. And yes, the fact that large swaths of that debt is owned by China and Saudi Arabia is deeply problematic. The solution, however, is to use government spending on innovation and new industries not only to kickstart a private sector that has been reluctant to create jobs but also retool the American economy so we actually make things again and have a broad middle class with good wages and benefits that can afford to buy the stuff we make, creating the kind of demand we need for long-term sustainability. But Wall Street and big business lobbyists don’t want you to own your own business, make a good salary and have a nice house with a reasonable mortgage. How would they make money on that?

After enough times running scared, maybe soon we'll figure out big business is really just crying wolf.

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

DonateDonate by credit card


Thanks for your support!

Did you enjoy AlterNet this year? Join us! We're offering AlterNet ad-free for 15% off - just $2 per week. From now until March 15th.