*The headline on Google read “Debt Ceiling Deal Infuriates Liberals.” Well, count me among the infuriated. President Obama and the top leadership of the Democratic Party just caved into a pro-rich-man Republican Party agenda.
The deal or “grand bargain” protects the interests of the rich by not raising any of their taxes, slashes spending for social programs which primarily benefit the middle class, the poor and minorities and rewards extortion from the super-conservative Tea Party wing of the Republican Party.
Further, in order to secure an increase in the nation’s debt ceiling (until 2013) the president agreed to legislation which contains no economic stimulus and thus will do absolutely nothing to curb the job crisis currently haunting the nation or address the growing wealth gap between the rich and the poor.
The deal was so one-sided and leaned so much in favor of Republican Party demands that Peter Bainart did not exaggerate when he wrote in the Daily Beast, “Barack Obama may be president, but the Tea Party is now running Washington.” Nobel-prize winning economist and New York Times columnist Paul Krugman was also correct when he wrote “The President has surrendered to the will of small-government conservatives at the peril of the nation’s already fragile economy.”
The worst thing the government could do is what it did. It agreed to huge cuts in government spending at a time when the nation’s economy continues to suffer from a recessionary-like situation with unemployment at near record highs. The agreed upon and planned cuts in government spending will only make the situation worse: more people will become unemployed, homeless and hopeless.
Here are the immediate consequences of the deal as foreseen by economist Mohamed El-Erian in an interview with the Guardian: “Unemployment will be higher than it would have been otherwise, growth will be lower than it would be otherwise and inequality will be worse than it would be otherwise …”
This is what we will get by caving into Republican Party demands for smaller government (i.e. cut federal spending) and falling for the bogus belief that if we just give the rich and their multi-billion dollar corporations more money (i.e. do not raise their taxes) they will invest, create jobs and better the economy.
Let us dispense with this notion. First of all, the rich do not invest because they have money. They invest their money when they feel they will make a profit. In a recession or near-recession situation, the prospects for profit are dim and thus the rich tend not to invest no matter how much money they have.
In such a situation, there must be another way of stimulating the economy. And that way is through consumer spending. Thus, the government should have been focusing on a jobs program designed to put the roughly 14 million officially unemployment Americans to work.
Further, even if the rich could be enticed to invest by giving them more money, there is no guarantee that they will invest in the United States. In recent years, America’s wealthy have been disproportionately plowing their investment dollars into China helping give that Asian giant the fastest growing economy in the world.
Obama betrayed the average working American by caving into the demands of a rich-man’s political party. It will take years for us to recover from the mess just created in Washington. Please read the legislation. You will agree with the description of Congressional Black Caucus member Emanuel Cleaver of Missouri: “This deal is a sugar-coated Satan sandwich. If you lift the bun, you will not like what you see.”
[Robert Taylor is editor of the blog Daily Black News Journal. Visit him by logging onto http://dailyblack.webs.com .]