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The Deficit Is Not Default of Obama

[Reposted from Truthout, written by Greg Palast]

Charles Dickens’ “Oliver Twist” gave debtors’ prison a bad rap. Too bad. I’d say that locking away GOP Majority Leader Eric Cantor in a penitentiary for deadbeats seems like a darn good idea.

Let’s talk about how we ended up in this pickle, bucking up against the “debt ceiling.” From 2001 to 2008, a Republican president took an annual surplus of $86 billion left for him by Bill Clinton and ran up the budget deficit to over half a trillion in a year ($642 billion in 2008). Altogether, George W. Bush blew up the national debt by over $3 TRILLION – then left the bills to Barack Obama.

For eight years, Bush spent like a drunk monkey. The world was the GOP’s Bergdorf and they had our credit card. If there was a shiny, new war on the shelf, they just had to have it: Iraq, Afghanistan, and let’s not forget the Fantasy Wars, the half a trillion dollars a year on fancy-ass weapons for a war that won’t happen. (Example: the Virginia Class submarine. The V-class was designed to attack Soviet subs. There are no more Soviet subs, but Bush ordered three dozen anyway – at $1.8 billion each.)

And tax cuts? Don’t get me started!

The Bush administration acted just like Sarah Palin when she was set loose in that Neiman Marcus in Minneapolis – grabbing whatever she could carry because Sarah could put it on someone else’s account.

The GOP’s fattened frat boys feasted – but when the waiter arrived with the bill, the belching rich kids looked around, pointed at some poor schmuck sweeping the floor, Mr. John Q. Veteran, and said, “THAT GUY will pay.”

By the way: Congressman Cantor, the guy leading the Republicans’ refusal to lift the debt ceiling, voted for the V-class sub as well as Bush’s bogus scavenger hunt for weapons of mass destruction in Iraq. But now Cantor doesn’t want to pay the bill.

Y’know, Congressman, maybe you think my parents were fools because they taught me: If you buy it, you pay for it.

Apparently, that’s not the rule at Cantor’s country club.

The sick assumption of this entire debt ceiling debate, as we hear from talking heads whether on Fox or PBS, is that this is our deficit; as if you and I got a tax break or Amazon delivered that submarine to our door.

And the flapping lips on TV also assume that there must be some kind of “compromise” in which the spending spree by the rich must be paid for by the working class. The Washington elite agree we must pay for tax holidays for hedge funds by closing health clinics.

Of course, the GOP is right about one thing. President Tiger Wuss will do just that: make the poorest among us pay the debts of the richest. Here we have a bunch of economic terrorists – “Agree to all our demands or the economy gets it!” – and Obama’s idea of leadership is to offer the berserkers three-quarters of what they demand.

Thank the Lord and Michele Bachmann that 75 percent isn’t enough for these greedsters.

Solution: Don’t pay the banksters

There’s another wrong assumption controlling this debate over debt, that the banks, the debt holders, must be paid. When the bankers and the Chinese and the Saudis lent Bush three trillion dollars for his wild-ass buying party, they were betting, like any investor, on the good faith of the borrower to pay it back.

So, let Hu Jintao and King Abdullah stick a collection agency on Cantor and the other Republican shirkers. Repossess their limousines or send The Boys around to remind Cantor what happens when you don’t pay what you owe.

The president should say to Hu, the Sheik and Goldman-Sachs:

I have identified $3 trillion in Treasury notes issued between 2001 and 2008 which were lent to fund President Bush’s expenditures. Unfortunately, those who borrowed your money don’t want to pay it back. You made a bad investment – but that’s how the free market works. Therefore, I am suspending payments on these Treasury notes until we can round up the deadbeats and make them live up to their commitments.

As president, I have the constitutional duty to pay the bills of the Veterans Administration, the Social Security fund, and other vital services already voted and appropriated by Congress. Military pay before banker pay. Get used to it.

Will the bankers have heart attacks? I hope so. (Maybe if bankers are ill, the GOP will vote for universal health care.) Will China refuse to buy more US debt? Not a chance: The Chinese cannot afford a devaluation of the $2 trillion to $3 trillion in US Treasury notes they have in their pokey, a devaluation which would surely follow their abandoning the US treasuries.

Note: Argentina defaulted and thrived. We can tango, too. But that’s all detail for me to argue out with other economists in some effete what-if seminar.

Ultimately, “default” is not the issue. “Default,” dear Brutus, is not in our stars, but in that age-old battle between Them and Us. They spent the money and now they want Us to pay.

Default lies with the Republican spendthrifts, Mr. President. So, I suggest you issue an executive order creating a new wing at Guantanamo: a debtors’ prison for trillion-dollar deadbeats.

(Don’t you think Eric Cantor would look good in orange?)

[licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.]



  1. starluna wrote:

    While I agree with the overall sentiment, I think this writer glosses over the complexity of all of this.

    For every dollar spent on unnecessary submarines, some portion of it went to a blue collar iron worker building it, some portion to the white collar accountant who manages the books in the company that builds them, and some (likely larger) portion to the executive that cuts the deal. The same thing can be said about the wars. Some portion of our economy depends on the contracts to provide supplies, do logistics, build equipment, etc. I can understand why my congressional delegation worked to continue a jet engine program that was not wanted or needed. Because it sucks to be unemployed. It sucks to have to borrow money from friends. It sucks to be homeless. It sucks to be sweltering in 102 degree weather and not feel able to turn on the AC.

    I find myself agreeing that we have a spending problem: we’re spending our money on the wrong things. I wonder what would happen if $5.4 billion dollars were put into the Pell Grant or loan forgiveness programs? What impact would that have on our economy? On our debt? Instead of people working for Boeing to come up with new ways to increase the efficiency in which we engage in killing people, what if we paid them to figure out easy ways to reduce hospital-borne infections? To develop prosthetics for our returning soldiers who have lost limbs? To make food distribution systems that allow for better access to locally grown food? How many new jobs would be created if we spent our money on things like this?

    I would also like to point out that this writer is using the same frame as the Republicans: us versus them. I would argue that this is part of the problem. We are in this together. The conservative/Tea Party/Republican folks who refuse to acknowledge this are also working steadfastly to insulate themselves from the consequences of those decisions. Adopting the us versus them outlook does nothing to address that. Indeed, using that framework reinforces its legitimacy, which is exactly the opposite of what the writer implies is needed. We all need to have a stake in this and that won’t happen until we all recognize that there is no us versus them.

    Friday, July 22, 2011 at 8:08 am | Permalink
  2. PatriotSGT wrote:

    Well said Starluna – Your point has always been part of my point. Neither side seems to want to “own up” to their part of the problem. Yes, a republican controlled congress and President ran up the tab from 01 to 06 when a democrat controlled congress took over and never missed a beat in spending. I remember sitting in a dessert in SW Asia and watching Bush sign a pork filled spending bill for the wars because the congress in 07-08 would not fund the war bill unless he accepted the stuffing that came with it. I blame him for not vetoing those monstrosities and the Dem congress for holding the bill hostage to pay back their campaign contributors and voters. Dispicable. Yes, the same thing can be said now in a way. The freshmen tea partiers are beholden to their contributors and voters and feel they must dismantle anything resembling welfare and protect the wealthy. Disgusting.

    Both sides are guilty of demagoguery. The dems like Charlie Rangel saying we can’t touch entitlements, the Cantors saying we can’t raise revenue. Meanwhile, the masses swelter in uncertainty and jobs are dropping like heat casualties in the blistering sun. Spending is out of control, like it or not its still true. We need some (at least short term) revenue increases until the economy improves and provides that extra revenue. It’s time for everyone to tighten their belt, roll up their sleeves and pitch in. Everyone. Gov’t funded cell phones for the poor, really. Gov’t subsidies for big oil, really. We have no clue what the difference between a need and a want. Go to Somalia and ask if they need a cell phone or a potato. Go to Ethiopia and ask if they need a student loan or a hot meal and a glass of clean water. Take care of the needs first, cut out the wants get the fiscal house in order then address the wants. Really.

    Friday, July 22, 2011 at 8:39 am | Permalink
  3. Dan wrote:

    The uber rich depend on war. Haliburton is making bundles of cash off the two in Asia. The money could be better spent on things we actually need and keeping that money within our shores to provide services and intra-structure.
    The article is dead on.

    Friday, July 22, 2011 at 8:41 am | Permalink
  4. ebdoug wrote:

    Bush did not “spend for eight years” Before we were fool enough to elect him president, he was spending the Harvard Endowment Fund on his oil wells in Texas that went under. Probably the same thing happened when he owned the Texas Rangers. Some people enjoy earning money. Some people enjoy spending other people’s money and do it with no regret. It was a lot more than eight years Bush was spending money he didn’t earn. Earning money is not one of the lessons his fraternity taught him.

    I’m reading “In the Garden of Beasts” by Erik Larson. Many other of you may also be reading it as it is currently a best seller. It is William E Dodd when he was Ambassador to Germany for four years- 1933-1937. He was a common man which went over very poorly with the normal Very Rich Ambassador. Very like Obama in present times. The other Ambassadors were spending their own funds and all others while Dodd was trying to spend within his means.

    My father was a lawyer who spent all his money on himself, then dipped into my mother’s inherited money so he could live the life he would like to become accustomed to. Bush is two years younger than I. From watching him, I see my father in him all over the place (except he doesn’t seem to womanize non stop as my father did.)

    Friday, July 22, 2011 at 9:05 am | Permalink
  5. b wrote:

    I agree with a number of comments both in the article and above. The key one being that neither side is without blame.

    A correction to the article, Russia has a new class of ballisitic missile submarines that are under going sea trials and test launches. I am not implying that the VA class is needed or not, just that there are new sub thrats out there.

    Friday, July 22, 2011 at 10:42 am | Permalink
  6. TENTHIRTYTWO wrote:

    In what way is Russia testing submarines a threat to us?

    Friday, July 22, 2011 at 1:52 pm | Permalink
  7. starluna wrote:

    1032: Anybody (meaning anyone not a US corporation) testing anything (meaning not under contract with the US military) is a threat to to the USA. Didn’t you get the memo? 😉

    Friday, July 22, 2011 at 2:33 pm | Permalink
  8. ebdoug wrote:

    Gramm–Leach–Bliley Act Bush was not in Congrees (and has never been) when Gramm-Leach-Bliley act was passed in 1999. Surely this is one of the main contributers to the sorry mess created. And it was passed by a bi partisan vote in the House:

    Friday, July 22, 2011 at 4:49 pm | Permalink
  9. TENTHIRTYTWO wrote:

    Hah, I must have missed that one. Frankly I was waiting for the “Wolverines! Wolverines!” chanting to start up…

    Friday, July 22, 2011 at 5:22 pm | Permalink
  10. starluna wrote:

    To clarify, part of my point was not just that both sides are to “blame.” The author implies that the only beneficiaries of the spending that led to the current debt were the rich. The primary beneficiaries were definitely them, especially the tax cuts and the myriad of loopholes for corporations.

    But we also have to remember that when we wasted all that money on those unnecessary submarines, jet engines, etc. we were also employing people, working class and middle class people with families. And canceling those programs will hurt those people more than the rich who got most of the benefits.

    What seems to be missing, in my view, from the discussion is what will be done to ensure that the jobs lost from cuts to certain programs (that I agree are wasteful) are replaced by something that is useful.

    The Joint Strike Fighter jet engine engine is a good example. This was being built by GE in a plant just north of Boston. The contract for this engine was a waste of federal money. But there are 300-400 people who are employed to build this thing. This is why my otherwise relatively smart congressional delegation has been pushing to restore funding for it. I don’t think anyone of us would like those people to be unemployed and I do believe that GE could retool that plant to build something else. Like wind turbines. Or MRI machines. Or solar panels. Or refrigerators. All things that GE builds.

    This is what I mean by a spending problem. Buying unneeded jet engines is wasteful spending. But buying wind turbines is a good long term investment which keeps people employed and helps deal with global climate change and could help the US, or even Afghanistan, become energy independent. And, at the local level, keeps people employed.

    This is the complexity that seems to be missing from the discussion about wasteful spending and who benefits. This is also why the us versus them perspective is not constructive. Yes those rich people have gotten the bulk of benefits. But us not quite so poor people also benefited and we need to recognize that.

    Saturday, July 23, 2011 at 8:23 am | Permalink
  11. b wrote:

    TENTHIRTYTWO, I never said that the Russian SSBNs were a threat to the US. I was just pointing out the article was in error when it said there were no more Soviet subs. I suppose since there is no more Soviet Union there are no more Soviet subs the same way there are no more Soviet cities, people, cars, etc. Instead there are a bunch of Russia cities, people, cars and subs.

    I just have issue when people build an arguement on a non-existant fact. “there are no more Soviet subs.” The reality is that there ARE Russia subs. Additionally, there is a new new ‘style’ or class of submarine called the Borei. These are similiar to the US Ohio class submarines. The first Borei class submarine is the “Yuriy Dolgorukiy.” It will carry 20 Submarine Launched Ballisitic Missiles. Supposedly, each missile will carry 10 nuclear warheads. So one submarine will be able to launch 200 warheads.

    Whether a Borei class submarine would be a threat to the US depends on US actions on the world stage.

    (Example: the Virginia Class submarine. The V-class was designed to attack Soviet subs. There are no more Soviet subs, but Bush ordered three dozen anyway – at $1.8 billion each.)

    Monday, July 25, 2011 at 4:30 am | Permalink
  12. russell wrote:

    Wow, a post where I agree with Starluna AND Patriot. There is hope.

    The political system is broken. IK loves to bash Repubs, but the Dems are no better.

    A friend commented the other day, “If McCain had been elected, what would be different now?”

    Monday, July 25, 2011 at 10:57 pm | Permalink
  13. Iron Knee wrote:

    If McCain had been elected president? Easy answer Russell: No health care reform. Way more drilling for oil offshore and in Alaska. Two additional “conservative” judges on the Supreme Court who would roll over to corporations. No Consumer Financial Protection act. Less adherence to the Freedom of Information act. Osama bin Laden would still be alive. Less restrictions on lobbyists. Don’t Ask, Don’t Tell still in effect. Iraq war not winding down.

    And Sarah Palin would be Vice President (maybe even President). Let that one sink in.

    Tuesday, July 26, 2011 at 7:14 pm | Permalink
  14. russell wrote:

    You can’t say McCain wouldn’t have done similar health care move.

    Obama has been dishonest about offshore and Alaskan drilling (government sold leases then refuses any permits).

    Dunno about Supreme Court, but McCain would probably have picked more conservative. You know as well as I do that appointees tend to morph.

    Obama totally caved on Elizabeth Warren. TOTALLY. I’m a conservative and think she ROCKS.

    BS on Bin Laden. Any president would have OK’d that.

    Lobbying restrictions have been removed by SCOTUS. WTF are you talking about. WTF has Obama done about lobbyists? Holy crap, he is in bankers pockets as much as any POTUS in history.

    Don’t ask, don’t tell IS still in effect. Like I care about that.

    LOL @ “winding down”. We will be there another decade.

    Friday, July 29, 2011 at 11:11 pm | Permalink
  15. linda Carson wrote:

    As a lady of limited means yet have worked my entire life when my mere social security is at risk by mere I mean 977.00 dollars a month is threatened what am I to think of the people asking me to do my fare share? Ask the senate or congress give up their pay or percentage to do their far share since they do as they want not what we sent them to Washington to do. Such as proteect the very people who have worked their entire lives for those golden years.

    Saturday, July 30, 2011 at 2:31 pm | Permalink