THIS PAST SUMMER’S wholly manufactured “debt crisis” contains important lessons for those concerned about the poor. Right-wing Republicans committed to radically cutting government services, including Social Security, Medicaid, and Medicare, misused a usually routine vote about raising the national debt ceiling, the amount of money the Treasury Department is allowed to borrow to pay its bills. Since everyone knew our bills would have to be paid and the debt ceiling eventually raised, the ceiling wasn’t the point. Cutting government spending was.
As damaging as the specific budget cuts will be, however, the implications of the process are much wider.
First, in addition to the agreed-upon $2.1 trillion in government spending cuts, more are virtually certain. Most economists state that the initial government financial stimulus two years ago was inadequate to revive the economy; most also acknowledge that another, similar or greater, stimulus is necessary and that now is absolutely the wrong time to decrease government expenditures. Despite that, President Obama and a majority of Congress have accepted without question the need to reduce the deficit immediately. Republicans have absolutely ruled out significant tax increases. Given their willingness to threaten the country’s economic stability, new taxes are unlikely. So simple logic requires that if the deficit must be reduced and income can’t be increased, spending must be cut even more. And if history is any guide, the hardest hit will be the poor.
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