Entitlements

At present we here in the United States are in an interesting situation.

This whole year our elected representatives have been wrangling over the budget — first with the showdown over the shutdown, and now with the debt ceiling high noon. And much of the discussion has centered not on bringing more money in, but cutting the money that’s going out, usually focusing on “entitlements.”

There has been discussion of cutting all Title X funding for women’s health on the basis of “no taxpayer money for abortions,” even though none of the Title X money goes to abortions at all. There have also been proposals to effectively defund the Environmental Agency, specifically making it illegal to regulate greenhouse gasses. And most significantly there have been “bold” proposals for cutting or even effectively privatizing Medicare, Medicaid, and Social Security over time, never mind that these measures would almost certainly increase costs for the poor and elderly and thus completely gut the main mission of those organizations.

Note that many of these issues are still in contention — some guaranteed not to pass, others being used as bargaining chips. Both parties, however, are agreeing to major cuts in the so-called “entitlement programs” that (mostly) benefit older and poorer folks; the difference between the parties’ positions is only in how much they’ll cut, not if. Note that the parties are also united in deregulating major industries, such as banking and telecommunications — again only differing in degree. And while President Obama has proposed raising taxes, he had the opportunity to do exactly that some months ago and, quite simply, didn’t — meaning that the parties, in deed at least, are also united on cutting taxes. Continue reading

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Neoliberal Sustainability

We all know the times we live in: global recession, everyone feeling the pinch, austerity measures necessary, etc. In terms of unemployment, the indicator most of us care most about, this is the longest and worst recession since World War II. So we all know the situation’s bad. Here in the US, state budgets are being keenly affected, as they rely on income or sales taxes, both of which have taken cuts — and many states have passed balanced-budget laws, meaning the old US Federal Government standby of borrowing their way out is unavailable. Life has grown grim.

Opinion is rather divided on how to respond, however.

The followers of John Maynard Keynes immediately demanded a stimulus package. Both President George W. Bush and President Obama tried this tactic, although Bush’s was just through tax rebates. Obama’s was somewhat more comprehensive, with tax cuts taken directly out of the paycheck withholdings to try and encourage immediate spending, reinforced by government funding for a variety of projects, particularly in construction (remember “shovel-ready”?). While some claim that the recession is now over, and while some signs on unemployment are encouraging, it’s clear we’re still deeply in the hole, and climbing out only slowly.

So the Keynsian tactics have run into trouble. Explanations abound as to why; but certain parties have their own theories on how to save the day. Speaker of the House John Boehner demanded that the pre-recession Bush tax cuts be made permanent for all Americans — i.e., that they be made permanent for the wealthiest Americans as well as everyone else, as it’s only in dispute for a fraction of the population. “[W]e must cut spending and stop all the looming tax hikes,” he writes. He didn’t get the cuts made permanent, but struck a deal with President Obama to extend them two years. Boehner’s principles seem to be both emblematic of the GOP’s platform and rather neoliberal: tax cuts for the wealthy, spending cuts and privitization, and laissez-faire economics policy from the government (the latter indicated by Boehner’s past resistance to bank reform legislation; more recently, Republicans serving on a panel on the financial crisis voted to expunge all instances of the words “Wall Street” and “deregulation” from their panel’s report. They don’t want their culpability uttered aloud.) Milton Friedman would be proud. Continue reading