When it comes to the debt limit crisis, America’s ruling class is a bit like a drunk driver who hasn’t had an accident yet: since our leaders succeeded in swerving at the last second, they’re going to keep repeating the same mistake until they crash.
Standard & Poor’s recent downgrade of America’s credit rating has been much criticized but is actually long overdue for one critical reason. This contention may seem even more startling when the reason for it is given: the nation suffered a mental breakdown several decades ago, when the ruling class began to act on irrational crackpot economic theories. Because the people who work in such institutions as S&P are often blinded by the same capitalist mentality and false patriotism than pervades the right wing, it has taken several decades for them to realize that our leaders simply aren’t in the mood to pay their debts. Ever since the Reagan Administration’s reckless fiscal policies transformed America from the world’s biggest creditor to the biggest debtor almost overnight, our growing debt has been rationalized by a number of arguments that were full of holes from the beginning. Chief among these is the delusion that because most of our multi-trillion dollar debt is held by American bondholders and domestic institutions like the Social Security Admnistration that we can easily repay it, since we “owe it to ourselves.” This creative bit of accounting covers up the two most important considerations when evaluating a debtor’s risk, their ability and willingness to pay. And because America has been gradually falling under the spell of Far Right fanatics for several decades now, we no longer have either the willingness or the ability.
The Absurdity of Reaganomics
The psychology of any debtor needs to be taken into account by any potential creditor, since no one in their right mind would lend money to those who had lost their own. Unfortunately, the mentality of our current leadership is entirely mad, but that madness is ignored by many of those in power from Wall Street in the Big Apple to the Main Streets of Middle America, for several foolish reasons. First and foremost, the politicians and businessmen who govern us are admired because they dress well, speak articulately and have nice houses, but that doesn’t mean that what they speak and believe is any less delusional than the ravings of the average drooling psychotic. Just because a man wears a suit, talks clearly and has a big bank account doesn’t by any means indicate that he is sane. The American public should have recognized this back when they elected Ronald Reagan, the man more responsible than any other for reviving the stupid economic myths which led the nation to ruin under Herbert Hoover. Compared to the rest of the world, where nationalization of key industries like the oil sector is routine, America’s economic policies were still far to the right under all the presidents between FDR and Jimmy Carter. Nevertheless, there was a consensus between Republicans and Democrats in those five decades that much of the New Deal and Great Society programs worked quite well in practice, which is why men like Eisenhower went along with them. It is no accident that the U.S. was at the peak of its economic health, social stability and superpower status in those years and has been in decline ever since Reagan destroyed that consensus and began dismantling the whole system, piece by piece, in areas ranging from farm price supports to food inspections to banking regulations. By Eisenhower’s standards, Nixon was a radical, but by Reagan’s standards, Nixon would have been termed a “liberal.” Reagan not only revived all of the failed ideas of the Hoover years but tacked on some new ones that reached new heights of insanity. Standard & Poor should have downgraded our debt back in the ‘80s, when the government began acting on such plainly illogical theories as the Laffer Curve, “trickle down economics,” or the current radical interpretation of ideas like comparative advantage and free trade.
Once stripped of all of the fancy language, trickle down economics boiled down to the idea that if we all let the rich take a bigger slice of the economic pie, the middle class and the poor will also end up with larger pieces of pie. Naturally, in practice the rich gobbled their share of the pie and then took everyone else’s share as well, leaving the common people with less and less. What happened across America since then has been the steady disinintregation of the middle and lower classes, as the gap between the rich and everyone else has widened. Likewise, the theory behind the Laffer Curve was this: cutting taxes would produce more revenue. Naturally, in practice it produced less revenue, which turned America from the world’s biggest creditor to its biggest debtor in a few short years under Reagan. Furthemore, regulation of Big Business was rapidly relaxed, in the belief that Corporate America would police itself. Naturally, in practice, Big Business began to run roughshod over everyone in every area of life. As a result, the nation’s infrastructure began to deteriorate, the rich began to loot the health care system, our environmental laws were gutted and our food safety because suspect because of a lack of inspectors. On top of all this, between Nixon and Reagan, the entire ruling class began to subscribe to radical reinterpretation of ideas like “free trade” and comparateive advantage that allowed Big Business to simply move entire industries overseas, in a wholesale dismantling of our industrial base that would have been considered high treason just a few decades before. Just a generation ago, we were a nation of factories and farms that produced everything we needed, but now we are just a nation of stores that sell products. Any six-year-old can understand that that sort of trade deficit is unsustainable; a nation that makes nothing will sooner or later consume nothing. What few Americans realize is that the nation’s entire standard of living has been maintained for more than three decades through the largest debt bubble in the history of humanity; the goods that have put our factories out of business are still available in our stores at low prices because of massive borrowing in myriad forms, ranging from the gargantuan trade debt to the federal debt to unsustainable corporate and personal debt levels. Without the factories and farms needed to produce goods, we can never pay those arrears back – which means that sooner or later, our creditors are going to cut us off, suddenly and painfully. Until our ruling class rids itself of economic fallacies, like their hatred of protectionism, those farms and factories cannot come back; America thrived for nearly two hundred years thanks to protectionist policies that kept those factories and farms safe behind high tariffs walls and has dived for nearly thirty years since those walls have come down. This is the same process that happened to the Ottoman Empire, whose own domestic industries were gradually wiped out by European competitors, which in turn soon became its chief creditors. Inevitably, those creditors cut the Empire off because it had no means to produce any goods to pay them back, leading to the violent disintegration of the Empire. As the Ottoman Empire collapsed, irresponsible businessmen and politicians soothed the public’s worries, giving them all sorts of illogical excuses for their irrational trade policies. The same sort of logic is being foisted on the American public today by equally corrupt and short-sighted leaders.
America should not be considered creditworthy until its leadership stops admiring foolish, paradoxical ideas like the Laffer Curve, trickle down economics and deregulation. All of them will inevitably produce more debt, even as similar falsehoods like so-called “free trade” sap our ability to pay. Since Reagan’s time, many of these cancers on the American economy have grown worse by feeding each other in various ways. For example, the rapid deindustrialization of the country has made social services more necessary than ever, thereby adding even more to our debt load. Our inner cities would not be dependent on subsidies like welfare if the light industrial jobs that were so plentiful under Eisenhower and Kennedy were not entirely wiped out in the years between Reagan and Clinton by our treasonous trade policies. I can attest from first-hand experience that the nation’s health care system would not be under such fiscal strain if just a little more energy were put into policing the people in charge of it; the whole crux of the problem is not insurance, but widespread looting of the system from coast to coast, by everyone from the pharmaceutical companies to the hospital staff to specialists to the primary care physicians on the corner of every Main Street. Sometime soon I am going to publish every detail of my personal odyssey through the health care system (at great risk to myself), so that people can understand just what the real root of the problem is: the love of money and the disintegration of medical ethics. America is supposedly on a spending binge, but the middle class and the poor rarely see any of it because it is siphoned off in so many myriad ways. One of the most blatant means is through tax exemptions or outright subsidies granted to Corporate America by local, state and federal governments. This occurs right in the public eye, at town meetings and sessions of Congress, for anyone to see; it is often accompanied by outright blackmail and extortion, by threats of businesses to relocate if they don’t get what they want.
The Clever Paradox: How the Tea Party Shifts the Tax Burden On To You
An even more insidious problem, however, is the logical trap in which the Right’s tax-cutting rhetoric has placed the American middle class in. Because each administration since Reagan has cut taxes for the rich, the burden of paying for spending has shifted to the middle class, who have seen their tax bills steadily rise. As a result, they vote for anti-tax candidates, who end up cutting taxes for the rich further, thereby exacerbating the problem for the middle class, which responds by electing even more rabidly anti-tax zealots. This vicious circle has continued unabated for thirty years, driving America to extremes that the Far Right once only dreamed of. Because this has happened gradually, and has been accompanied by an equally ridiculous shift to the Left on issues like abortion and homosexual marriage, few observers recognize today just how drastically far to the right we have moved on economic and foreign policy issues in that time span. Men like Obama and Clinton are reviled as “liberals” but would have been considered loony rightists by the standards of great Democratic leaders of the past, like FDR, Kenney and Carter, since they accept most of Reagan’s flawed ideas. There has never been anything in the economic or foreign policy agendas of Al Gore, for example, to differentiate him from right-wingers like Bob Dole. By the standards of Reagan, Nixon and Eisenhower would have been considered left wing liberal loonies. Now this process has reached the point where the public has elected to Congress a fringe element so far gone to the Right that much of the Republican establishment had to denounce them publicly during the recent debt limit standoff. These people couldn’t even get along with House Speaker Jim Boehner. John McCain, their presidential candidate in 2008, called their strategy of trying to tie the debt limit to balanced budget amendment “bizarre” and “deceiving.”[1] As David Stockman, the budget director for the Reagan Administration, put it: "Bond fund managers are as clueless as the House GOP. Without significant tax increases, the Federal budget is a financial doomsday machine -- but now even Obama and the Senate Dems have given up on taxes. So in substance, the default has already happened -- it's just a matter of time before bondageddon actually happens."[2]. As usual, billionaire Warren Buffet was right on the money when he stated that “Five times out of six to raise the debt limit might not be dangerous, but the sixth time could have catastrophic consequences…(House Republicans are) trying to use the incentive now that we're going to blow your brains out, America, in terms of your debt worthiness over time…You're playing with fire when you don't need to play with fire.”[3] Even these bastions of the Right recognize that the Tea Party movement was ultimately responsible for the debt limit crisis. Their public pronouncements have a note of fear, like passengers on a bus who suddenly realize to their horror that the driver is blind. They paved the way for the Tea Party maniacs by turning blind eyes of their own to madmen like Reagan. Their warnings are eerily similar to that of former President George Bush Sr., Reagan’s own vice president, to the effect that Reagan’s economic policies were “voodoo economics.” The distinctive mark of any fanatic is that they take their cause to the point that they destroy the very thing they originally sought; some cases in point include the U.S. military, which once went around destroying Vietnamese villages in order to save them; Luther, who ripped out half of the books of the Bible in the process of defending it, or modern feminism, which has killed half a billion baby girls worldwide over four decades in order to preserve the rights of women. Likewise, Reagan sank the nation much further into debt than any president before him in the name of fiscal responsibility. By the standards of the Tea Party, he would have been considered a Socialist. At least he had the good sense never to risk immediate default through brinksmanship over the debt limit, but his ideological children are willing to destroy the country’s finances in order to save it.
The Tea Party is so obsessed with cutting spending that they said just a few short weeks ago that they would vote against a debt limit increase that included any kind of increase in taxes, even on the richest Americans who haven’t paid their fair share in more than a generation. They wee quite willing to see the nation default, regardless of the shockwave it would unleash across the entire planet. To rationalize this, some of their supporters belittled the potential consequences. Many politicians, prominent businessmen and members of the press doubted that Congress would actually fail to produce a deal of some kind at the last moment, but virtually no one in a position of influence across the planet thought a default could occur without apocalyptic results for the international economy, since the U.S. is its hub. Because money is an abstraction, it is highly dependent on people’s perception of it, so the fact that so many influential people expected a default to cause a financial crash meant that one would have occurred, regardless of any other evidence. Thanks to the brinksmanship during the crisis, our borrowing costs have already gone up in tandem with S&P’s credit rating cut, but it would have been far worse in the event of a default. The Tea Party people complain most of all about government spending, but would have caused it to increase drastically just to service the higher borrowing costs, had they pushed the nation into default. That would have been the beginning of our woes though. Because several trillion of our federal debt is held by foreigners, the potential always exists for them to pull their money out of their investments suddenly. This is particularly true in the case of China, to whom we owe more than a trillion despite the fact that they are our main rival for global hegemony. I suspect that the only reason the Chinese have not pulled much of their money out already is that they are also dependent on us to pay our debts, just as we are dependent on them to keep lending; the minute they stop feeding our addiction to debt is the same minute the value of their existing holdings goes down. This Catch-22 has created the largest debt bubble in human history, one mirrored by a similar problem in trade, where the growing manufacturing powers of Asia keep lending us the money to keep buying their goods. This subsidizes their own economies in a roundabout way, but only by wiping out our own industrial base, thereby guaranteeing that at some point we won’t be able to pay them back, just like the Europeans and the Ottoman Empire several centuries ago. This vicious circle is unsustainable but neither side can figure a way out of the dilemma without provoking a global financial crisis. That trade debt is like a volcano in which lava has been building up pressure for thirty years and in the event of a U.S. debt default, it might finally erupt.
Since we are so dependent on foreigners now for everything from manufactured goods to oil and even to imported food, any inability to pay that debt will make the cost of all of those goods go up overnight. The value of the dollar would sink so low that it would purchase far fewer foreign goods, especially if it lost its status as the world’s reserve currency. The end result for consumers would be a rapid increase in prices, perhaps to the point of hyperinflation. Imagine spending $5 a gallon for gas one week then $10 a month later, or paying double for your family’s grocery bills. Now imagine trying to pay for it after being laid off. The first result of a default would be instant panic selling of stocks, bonds and other financial instruments on Wall Street, followed by a credit crunch and less investment by businesses in anything at all, especially hiring. As usual, this would pop any other financial bubbles in the economy and bring down the banking sector, since consumers and businesses will have less money to pay their own debts, plus the real value of bank assets would go down thanks to inflation. When crashes like this have happened in the past, whatever risky financial instruments that generation has devised typically go off like a bomb; in our case, that would be derivatives, which have riddled every corner of the American economy for three decades. An instant sharp recession, complete with a garden variety financial panic, would result, but this time against a background of sharp price increases thanks to our modern dependence on foreign goods. To coin a new phrase, what me might see is hyperstagflation. Once set in motion, this process may feed on itself, as financial crashes often do; for example, the increase in unemployment will trigger greater spending on social services (or police, if social services are cut off and the middle class resorts to violence to survive) and the decrease in business volume will drastically reduce tax receipts. This in turn will drive the nation further into debt, creating a spiral of insolvency.
When Third World countries have experienced such phenomena in the past thanks to equally stupid economic policies, they have generally pulled themselves out through deliberately planned recessions, often under the direction of the International Monetary Fund or the World Bank. These programmed recessions are so brutal that they have often led to rioting, revolutions and military coups. Domestic instability is the least of our worries though, because a default might accelerate the gradual breakdown of the peace between the great powers since the end of the Cold War. Since the U.S. is at the center of the global economy, any crash here is likely to produce a global recession, but the problem is much more complicated than that. First, rival regional powers like Iran have been deliberately trying to attack our currency by redenominating global oil sales in euros rather than dollars and a default and consequent collapse of the dollar would give them every excuse to do that. What that would means is permanently reduced international influence, as well as perpetually higher oil prices for us, regardless of the solvency of our federal government. As economist Lester Thurow once warned, any crisis over the debt will likewise be drastically magnified if foreign lenders begin to denominate their loans in foreign currencies rather than dollars, since that automatically raises our borrowing costs. Furthermore, many political scientists and other observers have long expected the world to divide into competing trading blocs, once the unsustainable trade relationship between Asia an the rest of the world is severed. The end of this relationship coupled with the decline in the value of their dollar reserves and the value of their investments in American stocks, bonds and the like would instantly tank the Chinese economy, as well as the rest of East Asia. Since China is rapidly growing in its own right but riddled with its own financial bubbles, the end effect could be a sharp but relatively short recession there. When the dust settles, the Chinese may have a lot of justifiable anger against America, while retaining their huge industrial base and growing military. In all likelihood, instead of a unipolar world revolving around the U.S., there will be competing blocs, one grouped around the European Union, another in East Asia centered around China and a third in the Western Hemisphere that revolves around us. Sooner or later, if history is any guide, these power blocs will compete for the world’s resources, especially the oil of the Middle East. This kind of great power competition might be worsened by finger pointing and flared tempers thanks to the global recession. In short, a default would cause a rapid diminishment of American economic and military power, as well as strategic influence, bringing to an end the era of relative peace the world has enjoyed since World War II. Much of this scenario comes not from me, but has been cobbled together from opinions of trained and respected political scientists and economists, such as Samuel P. Huntington and Lester Thurow. Even columnists for the business page of the local daily paper, like Charless Laloggia, have been warning about the risk of a financial crash from Reagan’s policies since the 1980s. Now even Reagan’s budget director and other darlings of the Right like McCain and Buffet are saying some of what I just said about the potential for default. If so many respected rightists have been warning about these alarming political and economic trends for so long, then why haven’t they come to pass? Two words suffice: more debt. America avoided the conequences of Reagan’s fiscal mess by borrowing its way out. Our factories and farms are closed but stores are still full of food and clothing because we have borrowed to pay for them. America is still the guarantor of the world’s peace and the center of global prosperity because our creditors are still willing to lend to us. In a sense, the shaky era of peace we have enjoyed since the end of the Cold War and the whole unworkable trading system have been sustainable because of our credit rating. Once we default on our debt, we can kiss all of that goodbye. The whole illusion of peace and prosperity will go with it.
The belittling of such potentially devastating consequences practically guarantees that sooner or later, these people are going to push us over the brink. The sun will come up tomorrow if we default, they say quite truly, except that the sun will come up on a poorer nation sharply diminished in strategic influence. Such people are often blinded by an idolatrous brand of false patriotism, which leads them to believe that America can’t possibly fail simply because it is America. That, on its face, is the Original Sin of pride, written large. It is the same sin that makes future drug addicts think that they alone are capable of doing cocaine or heroin without getting hooked, simply because of who they are. And just as drug addicts gradally begin to belittle the consequences and shrug at the pain they cause, the radical fringe of the Tea Party is also beginning to belittle and shrug at the damage a default could do, thereby guaranteeing that it will eventually happen. Because our nation’s politics have drifted continuously towards the right for several decades, we can count on such reckless sentiments becoming the mainstream in the future. The fact that we escaped the latest political crisis over the debt without an immediately painful outcome guarantees at some point, the even more far right-wing politicians of the future will creep closer to the line of default until they cross it, much like drug addicts. If Moody’s and Fitch really understood the dangerous mentality behind the debt, they would have cut America’s credit rating long ago. Like S&P, they have been blinded for far too long by the same myths as the Far Right, especially the belief that America cannot fail simply because it is America. Such logic merely enables idols to rise to new heights of irresponsibility before they finally crash to the ground.
The Historical Origins of Government Spending
An important part of this psychology is the availability of a scapegoat. Because Germany’s national sin was always excessive nationalism, the Nazis found it easy to make other ethnic groups like the Jews and the Gypsies into their scapegoats. Likewise, since America has always been infected since the time of the Puritans by the worship of wealth, its ruling class has tended to make the poor into their scapegoats. This is why there is so much concern from one generation of Republicans to the next about cutting social programs and so little correspondence to reality. It is important to first ask where state-financed welfare programs came from, but the answer would shock most capitalists. The Reformation supposedly allowed the first generation of capitalists to prosper by eliminating the influence of the Catholic Church over European economic life, but in practice, the elimination of rules against usury, overcharging, underpaying workers, speculation and other such sins merely allowed these early capitalists to bankrupt their economies. Over succeeding generations the bourgeois simply stole the common lands of the peasants all over Europe, as well as the lands owned by Catholic institutions, which had always served as a haven where the unemployed and unemployable could find work during tough times. After the early Protestant rulers thrust nations like England into depressions that took them several hundred years to dig out form, this whole workfare system was no longer in place to help the lower classes. As a result, that first generation of capitalists was forced to start the first state-financed welfare systems, thanks to the contradictions in their own unworkable economic system.
They have been with us for the five hundred years since then and always will be, until we begin to regulate Big Business out of existence. In medieval times, there was less need for a welfare system because the guilds and laws against monopolies and market cornering prevented Big Business from putting the means of production in the hands of the few; in practice, that made it much easier for a person to pull themselves up by their bootstraps by their own labor, or to support themselves on their own small farm. Adequate regulations against monopoly power went out of fashion several hundred years ago, but without them it will be impossible for large numbers of people to start their own small businesses; it is not like you or I can go and drill our own oil well without being put out of business quickly by Exxon. In the absence of a frontier or anti-monopoly legislation, we are all just a pool of temps at the mercy of Corporate America; in such a system, we are all dependent on the whims of Big Business long before we end up dependent on Big Govenrment. If they cannot or will not find secure employment for everyone at a livable wage, then there is always going to be a public welfare system; it is an inevitable logical consequence of capitalism, whether capitalists hate it or not. You cannot have a really productive workfare system under capitalism because capitalists themselves would complain that they could have produced the same goods on a for-profit basis. Nor can they simply kill the excess labor or starve it to death, since this would increase the bargaining power of other workers and force capitalists to pay them more. As Catholic journalist G.K. Chesterton pointed out in his seminal work on economics, Utopia of Usurers, “All but the hard-hearted must be torn with pity for this pathetic dilemma of the rich man, who has to keep the poor man just stout enough to do the work and just thin enough to have to do it.” The capitalist elite can, however, attach a social stigma to the class of people they have chosen to designate unemployed or unemployable. It is even easier when many of the members of that underclass can be easily identified by their black skin, or by the foreign customs and speech of immigrants. Class hatred is more common in America than race hatred, but the latter makes the former much easier. Just as it was profitable for the upper class to drive down wage rates for everyone by encouraging massive immigration from the late 19th Century through the 1920s, it was also in their interest to encourage massive internal migration of blacks from Southern farms to the inner cities of America from the ‘40s through the ‘60s. Once they were no longer needed, thanks to the treasonous transplanting of our industrial base overseas, they were cut loose. This underclass is a logical consequence of the economic fallacies our leaders have subscribed to for a long time. In the absence of high tariffs and protectionist legislation, the light industrial jobs the underclass depended on will never return. Without strict anti-monopoly legislation, they cannot pull themselves up by their own small businesses in large numbers., nor can we devise a truly productive workfare system. Unless we are willing to take such revolutionary steps, then we will always need large expenditures on social programs, just like the first English capitalists did after the Reformation. Because our leaders are not talking about making such wholesale changes, we can be certain that the spending on social programs they hate so much will continue on in some form for a long time to come.
The Theological Roots of Class Prejudice
The myopic obsession of the Tea Party with cutting this spending betrays their real purpose, which is to bash the poor, particularly if they are black or Hispanic. The underclass does serve one useful purpose for such men, which is to serve as a warning to the middle class: toe the line or you’ll end up hated and despised like these people. This is where the whole “welfare queen” myth comes from; even in the heyday of social welfare programs back in the ‘60s and ‘70s, study after study failed to find any evidence for this myths, or others such as the existence of “welfare magnets’ that attracted the indigent by their generosity. Anybody who has ever spent any time on welfare at all for any reason knows it is virtually impossible to survive on it, in contrast to all the myths to the contrary. This is especially true today, after four decades of continuous slashing of social programs to the bone, while handouts to Corporate America have grown exponentially. Although there are certainly abuses in the welfare system, most of them were stamped out decades ago, while the far more costly abuses in the corporate welfare system have gone ignored, such as tax breaks or multi-million dollar subsidies to companies and rich individuals. The whole idea is as insanely contradictory as the dilemma Chesterton mentioned; we are supposed to fear becoming an unfortunate as this underclass, while also reviling it out of envy. This paradox doesn’t make sense, but it does keep the public eye focused sharply on policing the poor, while the rich loot the public treasury. This is akin to straining out a gnat and swallowing a camel. And as the rich shift the tax burden onto the rest of us every time we elect an anti-tax candidate, thereby sticking us with the bill for all government programs of any kind, the more they succeed in focusing our attention on the gnats. Once allowed to continue sufficiently long, this process can raise the hatred of the poor to a fever pitch. Today, it is at the point where men like those in the Tea Party are willing to do their nations centuries worth of damage through default rather than devote one more dime to social spending. America’s solvency and creditworthiness are of secondary concern. Such men may use the rhetoric of fiscal conservatism, but their actions and words betray their real agenda: class hatred.
Today, the right wing can quickly silence any such criticism by labeling it as “outmoded class rhetoric” or the sin of envy, which then allows them to practice class warfare against the rest of the human race unmolested. The rich are always engaged in class warfare, because wealth and status are their gods, but the poor and middle class don’t always fight back, because some generations are less concerned with justice than others. The rich are always filled with envy, which is why they devise cunning ways to deprive everyone of anything they can, through a smorgasbord of different economic sins. That is why the bulk of the Bible’s numerous warnings against economic sin are directed at the rich, particularly against the love of money, which Jesus called “a very great sin.” The flip side is also true: “poverty is evil in the sight of the ungodly,” as Sirach 13:24 states. The Protestant philosophy that wealth is a sign of God’s favor and of personal merit, whereas poverty is a sign of moral degeneration, is deeply embedded like a tick in America’s culture, but it is completed contradicted by Catholic thinking on the subject. The Bible roundly condemns this whole outlook; in fact, most of the Book of Job is devoted to debunking it. Likewise, until now, all Catholic theologians of note have always warned against practically every aspect of capitalist philosophy, particularly the worship of wealth. Chief among them was St. John Chrysostom, who summed up their thinking when he warned that it was impossible to get rich in this life and still make it into heaven. If money is the root of all evil, it is not surprising that God considers it particularly sinful to worship that root. The whole sin of class prejudice originated with Satan, who believed that the extraordinary gifts God gave him made him better than all of the othrr angels; instead of humbly giving thanks, he used them to separate himself from everyone else. This deliberate separation is what drives men to want to become rich in the first place; it is not that they actually want the goods they buy, except to signify their elevation above everyone else. Regardless of whether they are acquired legitimately or not (which the Bible states is not possible), the motivation behind them is Satanic. The converse of the love of money is hatred of those who don’t have it, which creates a gap between the rich and poor; the wider that gulf is, the happier the capitalist class is. That is why they strain so hard to get wealth. In this they follow in the foosteps of the Pharisees, that class of religious hypocrites who worshipped wealth and status. Jesus argued with them from the beginning of his ministry to his end because, as he put it, “Your father is the devil, and willingly you do his bidding.” He denounced these elegantly dressed “white washed tombs” for exploiting the poor and middle class, so eventually they killed him.
The fact that there are so few voices willing to speak out against the same class of men today is a mark of our civilization’s spiritual decline. Like all other human problems, the real root of the debt crisis is actually theological in nature. Today we are caught in the midst of a division in the upper class, between one group of capitalists that prefers sins like lust and gluttony and another on the right that prefers avarice, pride and wrath. Both are leading us to ruin in their own unique ways; one attacks the family through evils like abortion and the dissolution of marriage as an institution, while the right wing drains families of their wealth. One kills millions of babies each year through abortion; the other kills millions through starvation and war across the globe. Both sides hate each other, yet have a tacit understanding that they will not interfere with the sins of the other, only with their virtues; that is why the Left doesn’t lift a finger to stop the Right from dictating economic and foreign policy (the two areas they are least competent to administer because of the nature of their own particular idolatry) while the Right doesn’t really do anything to stop abortion, gay marriage or similar travesties. This is the old battle between Puritans and profligates replayed for a new generation, one weak enough to wholeheartedly love the sins of both. Whether you agree with the Catholic Church’s detailed system of morality or not, there can be no disagreeing that we are receding from that standard in every conceivable way, whether it is in tems of sins favorable to political Left or the Right. In fact, this rejection is the distinctive mark of our civilization, one that explains more of our recent history than any other. If the Catholic standard of morality is true, then we are well on our way to becoming the most immoral generation ever; this can be proven merely by citing common statistics on abortion, divorce or other sins. The credit ratings agencies should keep in mind that we live in a nation where every third woman on the street has killed one of our her own children, in a country that cannot even keep its marriages together. If we cannot do even that, defaulting on a debt is child’s play.
Silence from the Corrupted Champions of the Working Class
Our creditors ought to realize that our civilization is in decline, not merely in terms of power, but of honor. The upper class is less honorable than ever, because unlike the rich men who governed us under FDR, Eisenhower, Kennedy and Carter, they would rather bankrupt their nation than pay their fair shares of taxes. Just as the apex of a pyramid is totally dependent on its base, they cannot survive without us, even their reserve army of unemployed workers in the underclass, but refuse to see it; they are as feeble-minded as tycoons who fire their butlers, then wonder why no one has brought them tea. Unfortunately, our civilization is dumb enough now to buy into their philosophy, which pervades all of our institutions. We live in a weak generation, where the leadership of the Catholic Church worldwide is so feeble that it cannot reaffirm any of its commandments against economic sin, whether it be speculation or the love of money or monopoly practices. This is because most of the clergy have been corrupted by the same myths as every else in Western civilization. They bear the ultimate responsibility for our debt crisis, or any debt crisis on the face of the planet in the last half a millennium, since the Catholic clergy have refused to speak out against the sin of usury that makes them all possible. Yes, we live in a weak generation, one so feeble that the middle class and the poor refuse to stand up for anyone’s rights, even their own. First of all, during times of spiritual decline, even the poor and middle class begin to accept the Gospel of Greed put out by the wealthy. They begin to believe in Horatio Alger myths and perhaps pin their hopes on the lottery; they become ashamed of their poverty, as if it were a sin; they start to admire the rich and believe that is their kind of crowd. Worst of all, they begin to wonder why their hard work never pays off in great wealth, then pin the blame on some scapegoat beneath them, rather than blaming the wealthy for underpaying them, or siphoning of the fruits of their work through dozens of other ingenious ways. When men weaken morally, they kick the defenseless people below them out of cowardice, rather than standing up to those above them who exploit everyone, because that requires bravery. Growing numbers of people in Western civilization are doing the former rather than the latter because our civilization is in a steep moral decline. It was in the “Me Decade” in the late ‘70s that this number really started to grow appreciably and our decay really became noticeable. The Baby Boomers once knew what social justice meant and were willing to fight for it, but by the time Reagan came into office, they were willing to sell out their principles for a piece of the pie. The rich assured them that they would get a bigger piece, if only they turned over their pieces to the wealthy; when this naturally didn’t work, too many of them, filled with pride and avarice, blamed the poor rather than thr rich. Ever since that process begna, our entire society has been gradually reoriented to the rich. Our whole tax system is geared toward bribing Corporate America through special exemptions, or by electing anti-tax candidates who then cut levies on thr upper class, thereby forcing the rest of us to pick up the tab. Even spending has been reoriented towards the wealthy, who devour the lion’s share of our budget through handouts to Corporate America (local examples include Rochester’s fast ferry project and demolition of Midtown Mall) or even by siphoning off funding of social programs like Medicaid and Medicare through rampant fraud of various kinds. A key example is the multi-billion dollar bailout of Wall Street after the financial crash of 2008. The transfer of our industrial base overseas was likewise in the interest of the rich. Another example is the debt itself. Who do we owe most of the debt to? Wealthy bondholders.
If our ruling class is behaving like a drunk driver, the only workable solution is to take the wheel out of their hands, whether they like it or not. Our leadership must be thoroughly replaced, whether Democrat or Republican, with politicians friendly to the working class. The proof of their friendliness – nay, their sanity – will be how willing they are to take a number of concrete steps to reverse every disastrous economic policy dating back to Reagan’s era. This means raising taxes on the wealthy back to what they were in the ‘70s and lowering them for everyone else; raising high tariff walls to protect our industrial base as it rebuilds; increase supervision of corporations in everything from inspectiosn in the food safety industry to preventing them from siphoning off money earmarked for the Afghanistan and Iraq war efforts, which are outrageously expensive because of corporate looting. Ideally, we need to go much further than just restoring the system that worked during the middle of the century, when we were at the peak of our power, by eliminating the flaws that brought it down. This would entail completely breaking up Corporate America into the smallest viable units, by bringing Teddy Roosevelt’s trust-busting strategies to every sector of the economy. This would give consumers more choices of small businesses to buy from nnd workers more choices of people to work for, while increasing the number of small business owners. This would not be possible without legislation that completely banned paid lobbying, strengthened unions to the point of restoring the guild system, treated the transfer of factories abroad as acts of sedition and punished corporate threats to relocate to get tax breaks as disguised bribery and blackmail rolled into one. The rich and the corporations they own would have to be legally prevented from using their wealth to pervert justice simply by buying better lawyers.
This is a tall order, but this is it what it would take to fix the system to the point where we can repay our massive debts. The madmen behind America’s wheel have been allowed to drive off to the Right for so long that a crash is inevitable, without a drastic turn to the Left, at least on economic issues. If we’re not strong enough to take the keys out of their hands, then they’re going to run down our entire civilization. The American poople are the ultimate police of last resort and it is through the corruption of a growing proportion of them that the criminals among us are getting away scot free; the same corruption that tears our families apart also blurs our notions about what is good for the country and ensures that we end up electing the people most unfit to govern. If our moral slide is not stopped, we will eventually reach the point where we will no longer honor our debts, nor will we have the ability to pay, after sending all of our industry overseas. The debt problem goes beyond merely an inability to repay, to a lack of willingness, because the rich simply are not in the mood to pay their fair share and the American people are not in the mood to force them to. Because the real root of the problem is spiritual, it is unwise to assume that the debt crisis is over until we see tangible signs of a spiritual reawakening in our civilization. The signs would include a new commitment to the ideals of our ancestors in many matters, including economics, ideas which would inenvitably cause a violent reaction on the part of the upper class. I don’t see any sign of union organizers protesting in the streets, or any talk among politicians about raising tariffs, or any willingness by the Tea Party fanatics to allow the rich to pay adequate taxes. I do hear a lot of misuse of terms like “liberal” and “protectionist” as swear words, along with a lot of admiration for moral monsters like Reagan. I don’t see any sign of the Catholic clergy publicly excommunicating politicians for pro-abortion stances, let alone excommunicating everyone for taking interest on loans. I do see a lot of right-wing priests trying to pass of the Repulican Party’s ideas on capitalism as Catholic doctrine, which constitutes the crime of heresy. I don’t see the American people becoming any less willing to abort their kids or divorce their wives, which are much more atrocious sins than bankruptcy, which isn’t even a sin at all in many cases. I do see opportunities for America to shed some of its debt through dishonorable means though. The first of these is simply to renege on our obligations to the elderly and disabled. The easiest way to solve the health care crisis would be the most immoral way, by encouraging euthanasia for the most vulnerable while denying access to health care. It would be an easy compromise: the Left would accept this because euthanasia is one of its pet anti-family causes while the Right would tolerate it, since this would shave trillions of dollars off the costs of Medicaid, Medicare, Social Security and other programs. In a nation that already kills more than a million of its own infants a year and contracepts away many millions more, who would mind making another million missing old or sick people disappear, especially in times of financial crisis? If we want to rate America’s creditworthiness, we need to evaluate a different kind of debt limit: the moral barriers we are willing to pass to avoid paying it. Once we cross that moral threshold, we will be ready for a less disgusting but more dangerous kind of default: simply stiffing China and the rest of our East Asian creditors. With the lion’s share of the world’s industry and the wherewithal to make their own weapons, they will have the money, the guns and the weapons to make us pay for our civilization’s decline.
The writer is a former journalist with a Bachelor’s in journalism and a Master’s in history from the State University of New York at Brockport, with a focus on American foreign policy and specializations in U.S.-Latin American relations and counterinsurgency history. He has worked as a paid foreign policy columnist for several newspapers and has credit towards a doctorate in Latin America history. He is a convert to Catholicism from atheism and has been an avid reader of textbooks on topics ranging from particle physics to psychology to economics since age 9.
[1] See "John McCain: Tea Party-Backed Lawmakers Making 'Foolish' Demands In Debt Ceiling Debate" at http://www.huffingtonpost.com/2011/07/27/john-mccain-tea-party-_n_911189.html
[2] See“Robert Reich: S&P Debt Warning is 'Height of Hubris'” at http://abcnewsradioonline.com/business-news/robert-reich-sp-debt-warning-is-height-of-hubris.html#ixzz1YnJvdxiO at http://abcnewsradioonline.com/business-news/robert-reich-sp-debt-warning-is-height-of-hubris.html
[3] See Crippen, Alex, "CNBC Transcript: Warren Buffett on Russian Roulette, Tax Breaks for Corporate Jets, and America's Bright Future." July 7, 2011 at http://www.cnbc.com/id/43671706/CNBC_Transcript_Warren_Buffett_on_Russian_Roulette_Tax_Breaks_for_Corporate_Jets_and_America_s_Bright_Future
