Over the past weeks the government has been discussing ways to deal with its massive $14 trillion dollar deficit. The threat from both Republicans and Democrats is the same – if Congress doesn’t increase the amount of debt the US government is allowed to take on (the so-called “debt ceiling”), the entire US economy may collapse. At the same time both Democrats and Republicans say the only way they will agree to raising the debt ceiling is to impose massive cuts to social programs.
So far the Obama administration has said it would agree to as much as $4 trillion dollars in spending cuts and has proposed to cut Medicare (the federal program providing medical coverage to the elderly) and Medicaid (the federally funded health care program for the poor) by at least $340 billion over ten years. And has proposed cuts to Social Security that would push at least 250,000 more people below the federal poverty line in the future.
So there you have it, if the debt ceiling isn’t increased, the economy will collapse even further. And the only way to raise the debt is to make huge cuts to the most important federal programs for working people.
Doesn’t this sound familiar? This was the same doomsday logic that was used to hand over trillions of dollars to the banks in the federal bailout. Then, as now, Democrats and Republicans said if the banks didn’t get our money, the economy would collapse.
It was the same reasoning given right after Obama became president and supposedly bailed out the auto companies. The argument then was if the auto companies don’t get bailed out, it will mean financial ruin for the whole auto industry. But the only way to bail out the auto companies was to impose massive cuts on auto workers. The Obama administration imposed wage cuts, health care cuts, pension cuts, and massive layoffs on auto workers. And a year later, auto companies made record profits because they pushed more work onto fewer workers and paid them less to do it.
This is the same logic being used in nearly every state across the country. If the states don’t balance their budgets, their entire economies will collapse. But the only way to balance their budgets is to impose enormous attacks on working people, through cuts in heath care, education, social services, and further attacks on public workers. This was the argument given by Governor Brown when he passed the latest California budget with massive cuts to working people.
And it is the same arguments being given all across Europe as well – the only way countries will receive loans to help with their debts is if they impose massive attacks on working people and social spending. These so-called “austerity” cuts are what’s happening in Greece, England, Spain, France, Italy, and Portugal, some of which have seen the largest protests in decades.
In case after case, the strategy is the same – the politicians threaten economic disaster unless working people pay with their lives. We have seen the results of these threats, in the US and across the world, banks and corporations, through their politicians, are trying to solve their crisis by making working people pay for it over and over again.
Most of the attacks working people face are cuts to services or wages or health care that were won through social struggles in the 1930s, 1960s and 1970s. This crisis is being used as the excuse to take away as many of these gains as possible. The banks and corporations are making out like bandits, trying to get away with as much as they can. And so far it’s been working. CEO pay has gone up 23 percent last year, with most CEOs making 280 times the average worker. Profits in 2010 were the highest ever recorded in the US. But the ruling elite haven’t gotten enough yet – they seem to want it all.
It was only through massive struggles by working people that we were able to win the gains that are being taken away from us today. And it will take the same level of fight back by working people to hang on to them now.
Holding Our Lives Hostage to Pay for Their Debt
