The right wing complains constantly about the Welfare State and there is a kernel of truthiness in what they’re saying. Two dollars of every ten that makes up the average American’s income is some form of government benefit be it unemployment, social security, food stamps or disability payments. The fact is that after 30 years of falling wages and the theft of middle class wealth there are simply a large number of the formally middle class around (also know as poor people).
The percentage of income that comes from government benefits would be far less if incomes reflected real productivity as well there would be a smaller need for benefits if Americans received their due for their work. But as the super rich receive an ever larger portion of the national income they don’t use their money to “create jobs” but rather to buy up assets and take them out of production. Efficiency of scale means less people making good wages and moving into the roles of the working poor. Jobs that are outsourced contribute nothing to our economy and reduce the money available to pay those who do work.
Then there are people like Mitt Romney that simply crate up factories and ship them to China. In fact the few large-scale steel construction projects that are being built in the US are being fabricated in China and shipped here to be installed by Chinese workers on American soil. The American officials authorizing these projects don’t have much choice as even if they could get away with politically or legally having a “buy American” policy there simply are no large American steel companies that they can buy from.
The next big emerging problem is that with no real economic recovery we have no choice but to keep providing money to the large segment of newly poor Americans or face the economic consequences. Funding for extended unemployment will stop December 31 and a couple of million people will fall from being merely poor to desperately poor. Throw in the cuts Republicans want to make to other programs as well as to the government payroll and this will cause the economy to go right off the cliff in 2012.
Obama appears to be beating the Republicans over the debt ceiling but he can’t defy gravity and the Republicans have already pushed the country off the cliff. We’re just standing in mid-air like a cartoon coyote and at the end of the year we will have no choice but to look down. Already people who could spend money aren’t because of uncertainty. I don’t mean corporate uncertainty, they are certain about what they are doing, except for retailers corporate profits are at all time highs and their bank accounts are incredibly fat. I mean the real creators of jobs, people who buy things. Everybody from the welfare recipient who simply doesn’t have money to spend to the middle aged person who heard Obama say he might agree to raise the age of Medicare still higher and simply stops spending money out of fear he won‘t be able to pay the doctor.
But is Obama the Coyote or the Road Runner? The day of reckoning is now pegged at August 2nd and Obama said today that the benefit checks like Social Security and for payments for Veterans that are due the very next day WILL NOT be forth coming without an agreement. The hard math is that 44% of the current budget authorized by Congress comes from borrowed money. The popular lie in the corporate media is that money comes from China but I’ve yet to see a Government check payable in Yuans, the borrowed money really comes from rich Americans and their corporations who pay no taxes.
Obama must, according to the 14th Amendment pay the debts of the United States “without question” so that means 50% of the spending of the non-debt obligations authorized by Congress cannot be met without further borrowing. Obama could take the 14th Amendment that to mean he must “spend” the money authorized by Congress and ignore the debt ceiling but he seems to take the meaning to be he must now choose what debt obligations to meet and what people to leave destitute.
If Obama were to meet the debt payments and the entitlement obligations of Social Security, Medicare, Medicaid and the alike, then the rest of the Government would cease to function. Soldiers, FBI agents, Border Patrol, CDC doctors, VA personnel and the like will go without pay for awhile but at some point reality must hit home. Mitch McConnell says no deal is possible with the current President of the United States. He must seriously believe that the government will simply live off the land like Sherman’s Army for the next 18 months? Will they loot and pillage towns selected by zip code in a lottery? I personally prefer singling out red states for utter devastation.
In fact Republican Senate Minority Leader McConnell has a uniquely political solution that tops anything Republicans have come up with so far. He would support a resolution that authorizes Obama to raise the debt ceiling unilaterally so that Congress plays no role in it and technically condemns it. Obama will uphold the Constitution, carry out the will of Congress, save The Republic and the world economy but Republicans will condemn him for it in the very authorization do the deed. Only in a madhouse, or in America, or are the two that the same thing? Americans must choose while they still can. www.prairie2.com