The Debt Crisis Is a Scam

Brace yourself: the phony debate about the government’s deficit and debt “crisis” will kick into overdrive this week as we hit the December 1 deadline for the federal deficit commission's final recommendations. We’re being told it’s time to tighten our belts because the government is spending too much money. But the debate is an illusion and false: there is no government deficit or debt “crisis.”

We have plenty of money, or access to money, and any money issues we have are all quite manageable. This is still the richest nation in the history of the planet. One day, the debt/deficit “crisis” will assume its ranks among fairy tales such as Iraq’s weapons of mass destruction and trickle-down economics.

The question before us is simple: what are our priorities as a country, how should we spend our great wealth and who should pay to advance those priorities? 

In my new book, It’s Not Raining, We're Getting Peed On: The Scam of the Deficit Crisis, I look at the foolish statements made about the phony “crisis." In 1946, for example, the country’s debt-to-gross domestic product ratio—meaning, how much we owed compared to how much we produced—was 108.6 percent. In other words, the adults living right after World War II were handed the greatest debt the country had ever had, but that generation experienced the greatest prosperity in the country’s history—and maybe even in the history of humans. Today, the debt-to-GDP ratio isn’t even close to that. 

If you want to wring your hands about the bigger government deficit, don’t go pointing the finger at the president or Congress. Instead, you can thank Goldman Sachs, Angelo Mozilo, Robert Rubin and the rest of the smart boys who built a financial system that was a mix of a floating casino, Ponzi scheme and Fool’s Gold paradise—all patched together by lies, deceit and a healthy dose of massive public indoctrination of the wonders of the “free market."

What’s the connection? The collapse of the financial system—thanks to the greed and incompetence of the people running it—is the principle reason today for a larger deficit, not typical government spending. The deficit and debt “crisis” is a huge distraction from the real crisis in our country: declining wages, no decent jobs for one in five Americans, and the siphoning of the great wealth of the country into the hands of a few.

There are are four easy ways to bring in more money—not to deal with the phony “crisis” but simply because we can do better: stop funding immoral wars, significantly raise taxes on the very rich (an Eisenhower-era proposal that goes far beyond anything even Democrats are suggesting), ask Wall Street to pay a fair share in taxes and, finally, truly deal with our health care costs by getting rid of the insurance industry that kills Americans and enact a “Medicare for All” system. Presto: trillions of dollars appear.

Sometimes, I am asked to appear as a “talking head” on cable news television, mostly business-related shows, to represent “the left." Invariably, when the chatter turns to tax fairness, the anchors raise the specter of “class warfare”—the threat to the very rich that their obscenely low tax rates may have to go up a smidgen. 

I usually smile and reply, “You are right. There is class warfare in the country—and your class is winning.” We can’t let this happen.

Jonathan Tasini has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy for the past three decades. He can be reached at jtasini@economicfuturegroup.com.