Debt Debate a Fraud
Stop Paying the Rich! Increase Funding for Social Programs

Debate on Debt Serving to Further Discredit Elected Governance
The McConnell Plan
Letter from Monopolies Demanding Payment on Debts
Kucinich: Debt Political Theater Diverts Attention While Americans’ Wealth Is Stolen
Why is the Pentagon Not Part of the Deficit Discussion?




Debt Debate a Fraud
Stop Paying the Rich! Increase Funding for Social Programs

The current debate on debt and deficits does not deal with any of the problems facing the people of the U.S. It does not challenge the control of the economy held by the big monopolies. Indeed, the months-long squabble is being used to strengthen the control of the economy by the biggest monopolies and the direction set in stone by the privileged ruling elite. This past week, the major monopolies, their credit rating agencies, chairman of their Federal Reserve all insisted that the “U.S. government not default in any way on its fiscal obligations.” Meaning that every penny of debt servicing and debt payments must be paid without fail. This is being presented as the most important role of government. Failure to do so will be “catastrophic,” cause a “severe shock,” be “Armageddon.” Evidently we are to believe the sky is falling and only paying yet more public dollars to the rich will stop it! And evidently we are to forget that these same financiers whose parasitic speculation contributed to the current economic crisis demanded the largest pay the rich scheme — trillions of dollars — from the Obama government when he came to office. That scheme was also done with the claim that failure to stabilize the “financial markets” would lead to “catastrophe.”

The entire debate is a fraud designed to hide monopoly control of the economy while convincing the public that paying the rich more and more of the public treasury is the only option. Ending war funding, freezing debt payments, demanding zero percent loans, these are not to even be considered.

We say there is an alternative that meets the social responsibilities of government to the people and contributes to solving the problems we face: Stop Paying the Rich! Stop War Funding! Increase Funding for Social Programs!

The monopolies reject this people-centered direction. They have their own narrow agenda to serve their ownership structure of equity and debt. The owners of monopoly capital are narrowly fixated on the return on their investments. This infuses their thinking and everything they do including their hatred of corporate taxation and of being denied even a penny of their debt payments. They do not want to see, much less address, the economic and social problems people in the U.S. face. They do not want revenue from their companies going toward solving any of the problems, as that directly reduces the return on their investment.

The squabble over the debt ceiling and budget cuts is not one of principle. It is not about whether the people or monopolies should control the economy. It is about justifying the intensification of the anti-social offensive of the rich, including cuts to Social Security, Medicare, Medicaid, education, healthcare, funds for states — for all the social programs needed by the people. It is to impose the conception that government is to solely serve monopoly right against public right. We say government must be guided by meeting its social responsibility — Monopoly Right No! Public Right, Yes.

Government has responsibility to the public and to guaranteeing the rights of the people, including to a livelihood, housing, education, healthcare and secure retirement. The fraud of the debt debate is to deny this social responsibility, to convince people that government should not be held accountable and instead we should join in supporting yet another massive pay the rich scheme.

Any plan that emerges that does not challenge monopoly control of the economy and uphold public right over monopoly right cannot offer any real solutions. What is needed is a new direction to the economy, a new direction that would guarantee the rights of Americans and begin to solve the economy’s many problems. What is needed as a basic principle is that people have rights by virtue of being human. People are born to society and government has social responsibility to guarantee their human rights.

A new direction for the economy must first address and discuss the question of control of the economy. Who has the right to control the basic sectors of the economy — the people or the U.S. monopolies? Public right must control the direction of the economy not monopoly right. But none of the proposals address this problem of monopoly control. That is the real debate that the working class must put on the table — Whose Economy? Our Economy! Who Decides? We Decide!

The current squabble with its “sky is falling” atmosphere is also being utilized to put in place arrangements of governance that further strengthen monopoly control rather than restrict it. Just as there is great concentration of power in fewer hands in the economy, there is increasing concentration of power in the hands of the executive in the political sphere. And, consistent with this direction of strengthening monopoly right over public right, there is less and less space for public participation in governance and less and less accountability to the public. While the financiers were invited to Obama’s closed-door meetings, the public was not. The Congress, which is supposed to be the place for reasoned argument and public debate about proposals has been reduced to an arena for name-calling and character assassination and squabbles over which scheme best serves the rich. Congress is justly hated by the people for its refusal to seriously address social problems and submit to the will of the people, such as the will of the majority to end the wars and bring all the troops home — a real contribution to peace and to the economy. Who decides these matters of war and peace, of poverty and jobs, of the environment, of rights? That is the issue the people are bringing to the fore as they strive for a modern democracy where the people themselves govern and decide.

The rich, rejecting this direction of political empowerment of the people, are organizing to even further restrict the role of the public and public right in governance. One part of this is discrediting Congress and presenting it as an obstacle. Congresspeople are being painted as stubborn children unable to do what is right, while the president is the “adult” capable of “compromise.” The solution of the rich is to further weaken the role of Congress and the public while strengthening that of the executive. The McConnell plan (see below) specifically gives the president greater power over the public purse strings, allows him to “re-open” the budget and demand more cuts, and strengthens the use of closed door meetings by an appointed committee which then presents a “plan” for Congress to vote up or down. The ground is also being prepared for the possibility that if Congress fails to act, more extreme measures will be taken by the president through executive order in the name of protecting national security and preventing “Armageddon.”

Solving the problems facing the people requires increasing the role of the public and public right in governance. It requires empowerment of the people themselves to govern and decide. We need a Congress filled with workers representing the pro-social anti-war agenda of the working class and people. We need a political set up that opens this direction, not blocks it as the current one does. As part of developing this pro-social, anti-war agenda, we need public debate on the necessity for empowering the people, on who decides. Voice of Revolution urges all to join in organizing and participating in such debates.


Concentration of Power in the Executive

Debate on Debt Serving to Further
Discredit Elected Governance

A main feature of the current debate on debt is the discrediting of elected governance, especially legislative bodies like Congress. Consistent with this is the elimination of public debate and informing the public as to what the various proposals contain. We have been witness to endless closed-door meetings rather than public debate, the most recent between Obama and leaders of Congress and those between Senators Harry Reid and Mitch McConnell, Democratic and Republican heads of the Senate. To date there has been no public accounting of the various “plans” being considered behind closed doors, other than the general figures of $1.5, $2 or $4 trillion in cuts planned, almost entirely to social programs and services. This too is an attack on elected government, where written bills are made public and arguments given in public for the various choices. Already in Congress this public debate has been limited. Now we are to accept that it is eliminated all together, replaced by closed-door meetings of top leaders and then a “binding plan” presented for a vote.

The content being given also serves to justify the further intensification of the anti-worker and anti-social offensive of the monopolies as they seek to grab even more of the public treasury. Echoing the demands of Wall Street that the “U.S. government not default in any way on its fiscal obligations,” Obama says he and Congressional leaders are agreed that debt payments cannot be touched or diminished in any way, while at least $4 trillion in cuts to social programs are required. That is what is being called a “reasonable compromise.” The open and brutal demand of Wall Street is that its demands on the public treasury be met while public right to the public treasury is “unreasonable,” and even “catastrophic.”

Further, the debate is giving indications of changes the rulers are putting in place in governance, changes that restrict the public while concentrating more power in the hands of the executive, in this case the Office of the President. Repeatedly Obama has targeted Congress as the problem. He is replacing public debate in Congress with closed-door negotiations coupled with public appeals to support him, as president, against Congress. It is a means to try and rally the public to support greatly restricting the role of Congress and the space for public debate on the vital problems facing the people in favor of increased executive power. It is a solution that blocks the drive of the people to govern themselves as a solution to a Congress and president that does not submit to the will of the people.

Congress Painted as the Problem

Obama held two press conferences in one week, one July 11 and the other July 14. He also held closed-door meetings with Congressional leaders all that week.

On July 11, he began by echoing the demands of Wall Street that “It is not acceptable for us not to raise the debt ceiling and to allow the U.S. government to default.” The alternatives of securing loans at zero interest, or freezing debt payments, or ending the wars in Iraq and Afghanistan, are not to be considered as immediate solutions. This is not part of the “shared sacrifice” Obama raises. He says, “It is possible for us to construct a package [of budget cuts and revenue increases] that would be balanced, would share sacrifice, would involve both parties taking on their sacred cows, would involve meaningful changes to Medicare, Social Security and Medicaid…” While saying defense cuts are included and talking about “hundreds of billions in cuts” over ten years, the main figure being given is $78 billion over five years. Simply ending the wars in Iraq and Afghanistan, as demanded by the public, would secure at least $1 trillion — but that is not on the table. Even cuts of hundreds of billions would not stop the growth in the yearly Pentagon budget of more than $700 billion let alone serve to make “meaningful” cuts.

Obama then paints Congress as a place where nothing gets done. He positions himself as the person ready to act. He urges that “now is the time to deal with” the debt and to push for the “largest possible deal” on cuts to social programs. He says passing a package with $4 trillion in cuts “Would give the American people enormous confidence that this town can actually do something once in a while; that we can defy the expectations that we’re always thinking in terms of short-term politics and the next election, and every once in a while we break out of that and we do what’s right for the country.” Notice here the content that the majority of the time, Congress does not “do what’s right for the country,” and we are to have confidence because “once in a while” something actually is done. In this manner, Congress is painted as the central problem to doing what is “right for the country.” It is government extension of monopoly right over public right that is the problem to address.

Obama also does not hesitate to target both Democrats and Republicans. He says, “I continue to push congressional leaders for the largest possible deal. And there’s going to be resistance. There is, frankly, resistance on my side to do anything on entitlements. There is strong resistance on the Republican side to do anything on revenues. But if each side takes a maximalist position, if each side wants 100 percent of what its ideological predispositions are, then we can’t get anything done. And I think the American people want to see something done. They feel a sense of urgency, both about the breakdown in our political process and also about the situation in our economy.”

In speaking to the “breakdown in our political process,” Obama attempts to address to the public recognition of the illegitimacy of the monopoly rulers. They are not fit to govern and having a war president and Congress that only “once in a while” is able to get things done is evidence of this in the eyes of the people. This growing lack of legitimacy greatly concerns the rulers. But far from addressing the political empowerment needed to solve this problem, which requires empowering the people to decide and having a Congress where the workers make up the majority of representatives, Obama attempts to position the president as the one who can get things done. He attempts to take advantage of the great anger the public has with Congress. We are not to question the reality that it is not the working class and people who decide the budget and more generally the direction of the economy. This issue of who decides, the workers or the rich, is not to be discussed in any way, just as the mandate of the monopolies concerning war funding and payment of the debts is not to be considered part of the “compromise.” The current debate instead diverts from discussion on who decides and decisions serving the public, to Congress as the problem.

Obama again specifically targets Democrats saying “The vast majority of Democrats on Capitol Hill would prefer not to have to do anything on entitlements; would prefer, frankly, not to have to do anything on some of these debt and deficit problems. And I’m sympathetic to their concerns, because they are looking after folks who are already hurting and already vulnerable, and there are a lot of families out there and seniors who are dependant on some of these programs.” Thus the warning is given that the “compromise” required is one where debt payments are not touched in any way, the Pentagon has cuts that will not even be noticed, while massive cuts to the most vulnerable and programs people depend on for their survival are made. The plan is to intensify the anti-social offensive of the monopolies whose drive for the narrow aim of securing the most profits now requires taking more and more of the public treasury.

The Issue is Who Decides

Throughout the debate, the media has echoed Obama’s attack on Congress. Back on June 29, for example, also during a news conference, the Washington Post reported that “On each issue, Obama cast himself as the adult in the room and Congress as an irresponsible child — unwilling to sacrifice their desire to score political points for the good of the country.” On July 11 he said he will not sign a short term deal and then admonished Congress, “We might as well do it now — pull off the Band-Aid, eat our peas.” On July 14, Obama similarly addressed Congress as though he is the adult and they are stubborn are children refusing to budge.

He emphasized that he expects everyone to “compromise.” He hints at how the cuts to Social Security will be made by saying “We should make sure that current beneficiaries as much as possible are not affected.” Much as the monopolies are doing when it comes to imposing cuts to pensions, wages and work rules, new workers are the ones commonly most impacted while “current beneficiaries” are less affected.

Obama puts forward that the American people are behind him, while Congress is blocking resolution: “Eighty percent of the American people support an approach that includes revenues and includes cuts. So the notion that somehow the American people aren’t sold is not the problem. The problem is members of Congress are dug in ideologically into various positions because they boxed themselves in with previous statements. And so this is not a matter of the American people knowing what the right thing to do is. This is a matter of Congress doing the right thing and reflecting the will of the American people. And if we do that, we will have solved this problem.”

He also speaks more generally about the breakdown in the political process, saying he hopes “This debate has focused the American people’s attention a little bit more and will subject Congress to scrutiny. And I think increasingly the American people are going to say to themselves, you know what, if a party or a politician is constantly taking the position “my way or the high way,” constantly being locked into ideologically rigid positions, that we’re going to remember at the polls.” He then again targets Democrats saying the plan he is proposing is “tough on the Democratic side, too. Some of the things that I’ve talked about and said I would be willing to see happen, there are some Democrats who think that’s absolutely unacceptable.”

In this manner, the president is positioned as the person to get things done, Congress is the block to this and the discredited political process can be mended by concentrating greater power in the president and limiting those of Congress, which does nothing anyway. In the present situation, there is a targeting of those, whether Democrats or Republicans “locked into ideologically rigid positions.” Indeed, Obama extends this targeting to “a party or a politician.” Thus it can be seen that the existing parties and blocs within them taking “rigid positions,” are to be seen as obstacles to “getting things done” for the monopolies.

As part of the attack on the public, political parties in general are being targeted as they represent “rigid positions.” They are to be replaced with individual candidates, backed by one or more of the contending monopoly interests. Governance requires concentrated power in the executive, the “adult” and closed-door negotiations with a few top leaders to “get things done.” And all are to openly and solely serve monopoly right and the increasing restriction on the public and public right the monopolies are demanding. It is a direction that can only intensify the current fights within the ruling circles and their elected representatives. And it is a debate designed to block discussion on the solution of the working class — to empower the people to themselves govern and decide, the budget, the direction of the economy, matters of war and peace, protection of the environment, elimination of poverty, all the social problems of the day. It is decision making of, by and for the working class and people that is required. Achieving this political empowerment and the practical political measures for it is the public debate required.


The McConnell Plan

As closed-door negotiations between the president and congressional leaders failed to secure a plan for raising the debt ceiling and making massive budget cuts, top Republican Senator Mitch McConnell proposed a “last-ditch” plan. Shortly after, top Democratic Senator Harry Reid joined McConnell in crafting a “bipartisan compromise.” The plan is now being put forward as the most likely resolution to the current fight over how best to turn over more public dollars to the monopolies. At present it is expected that at least some part of the plan will be presented to Congress and made public July 20. Otherwise, as has been the case for the past two months, negotiations will continue behind closed doors.

Like Obama, McConnell said that while the proposal is not his “first choice,” he emphasized, “We’re certainly not going to send a signal to the markets and to the American people that default is an option.”

One main feature of the McConnell plan is to give the president authority to raise the debt ceiling. Congress can only block this with a two-thirds vote. This is a shift from the current situation where only Congress can raise the debt ceiling and it requires only a majority vote. The plan is said to allow Obama to raise the ceiling by $2.5 trillion in three installments. He is to make the request to Congress but can veto any refusal by Congress, which would then require a two-thirds vote to override. Even if the House overrides, Obama would need only 34 Senators to support him to block the override and secure the debt increase.

While it is said that the arrangement is temporary, through to 2012, once such arrangements are put in place, they commonly remain. It will likely be renewed with fewer restrictions in terms of dollar amounts. Thus although it is being presented by McConnell as a way to force Obama to take responsibility for increasing debt, it is in fact an arrangement that secures greater power for the office of the president over the public purse strings. This is a significant change as it is Congress that generally controls the purse strings, not the president.

Secondly, Obama is to present spending cuts equivalent to the debt increase requested. Making these cuts however is not binding on the president or Congress in order for the debt to be raised. This measure also increases executive power. Essentially, the President is being given power to re-open the budget and present more cuts, and he can do so with the ready-made justification that they are required to “balance” the debt increase.

Normally, once the budget is passed and funds appropriated by Congress, it stands, much as a contract would. But in conditions where workers nationwide already experience that a contract is not a contract and the monopolies unilaterally act to impose cuts, the rich are now putting similar power in the hands of the president to make demands for more budget cuts. Thus this aspect of the plan is also a mechanism for increased presidential powers. Now, in addition to special war funding requests made outside the budget process, these demands for more cuts will also be made. The plan also gives the president space to further maneuver to place blame on Congress.

A third part of the plan is for a “bipartisan” committee of six Republicans and six Democrats to be appointed to work out a longer-term budget cutting plan. This too is a mechanism concentrating power in such an appointed committee and removing it from the normal public committees and debates of Congress. If the current negotiations are any indication, this committee will also meet behind closed doors and have closed meetings with top financiers, while blocking public participation and accountability. Any plan the committee devises is to be “fast-tracked” through Congress, meaning no amendments, very limited debate and then a straight up or down vote.

At present McConnell and Reid are saying that they will also include a “package” of cuts as part of the measure, while leaving a more extended plan to the “bipartisan” committee. They have remained relatively secret about which cuts they will include and how much will be cut.

The Wall Street Journal backed the plan, as did the Washington Post and New York Times. All three said a bipartisan deal to “cut spending and reform entitlements” as the Journal put it would be better, and they mourned the “missed opportunity” to “yield a grand bargain or even a modest adjustment to the nation’s fiscal course,” as the Post put it. And echoing Obama’s discrediting of Congress, the Post added, “The McConnell plan offers political cover for cowardice and irresponsibility. If it is the best Washington can do, it is better than nothing. But it’s not much of an advertisement for what Washington can do.”

While mainly private discussions are still unfolding, it also appears that the plan will serve to bring together a “bipartisan” grouping backing the plan, at least in the Senate and likely to some degree in the House as well. The “extremists” of both parties, who as Obama put it hold to “rigid positions” are to be isolated. Over time what could be emerging is the splintering of the existing parties and emergence of this united, “bipartisan” grouping of top leaders that work with the president behind closed doors to “get things done” for the monopolies, coupled with backing of individual candidates for president.


Letter from Monopolies Demanding Payment on Debts

On Tuesday July 12, the monopolies controlling the U.S. economy issued a letter to the president and all members of Congress, demanding that the U.S. “not default in any way on its fiscal obligations.” Those signing included groups of the most powerful monopolies, Business Round Table, Financial Services Roundtable, National Association of Manufacturers and U.S. Chamber of Commerce. The letter included further individual backing from major monopolies from all sectors of the economy, such as Citigroup, J.P. Morgan Chase, Morgan Stanley, Aetna, Allstate, Dow, Dupont, Bechtel, Pfizer, UPS, Verizon, Whirlpool and Xerox. The letter emphasizes the current dictate of the monopoly financiers that the “U.S. government not default in any way on its fiscal obligations.” It calls for the debt ceiling to be raised and further demands that “Our political leaders must agree to a plan to substantially reduce our long-term budget deficits with a goal of at least stabilizing our nation’s debt as a percentage of GDP — which will entail difficult choices. The resulting plan must be long-term, predictable and binding.”

Federal Reserve Chairman Ben S. Bernanke testified in Congress on July 14 demanding a “strong credible plan” for further massive budget cuts. He said failure to raise the debt ceiling and make the trillions in budget cuts would risk a “self-inflicted wound” that would cause a “very severe financial shock.” The Federal Reserve is the private banking system of the monopolies that utilizes public funds.

In addition, the Wall Street financiers are threatening to lower the credit rating for U.S. Treasury bonds, currently promoted as the “world’s safest investments.” On Wednesday, July 13, Moody’s Investor Services said that the “U.S. could face a downgrade if it does not raise the debt ceiling.” The next day, July 14, Standard and Poor’s (S&P) announced there is a 50-50 chance of a downgrade within the next three months. They said that a failure to raise the federal debt limit by August 2 could prompt the downgrade. They added that unless $4 trillion in cuts to the federal budget are made over the next ten years, they could also impose a downgrade. While according to reports the White House, including Treasury Secretary Timothy F. Geithner “made an impassioned plea against any action raising doubts about U.S. credit,” both S&P and Moodies did exactly that. It should be remembered that these are the same rating agencies that did not lower the ratings for the financial houses involved in the home mortgage scandals and massive speculation that contributed to the most recent economic crises. And it is these same financiers, who themselves secured trillions in the government bail out that contributed to the debt, who are now insisting on massive cuts to social programs.

The debt ceiling is currently set by Congress and is given as the total amount the U.S. can have as debt. It currently stands at $14.3 trillion. The president is seeking to raise it by at least $2.5 trillion. August 2 is the date given by Geithner for when the U.S. government supposedly runs out of cash to pay Social Security checks, Medicare, Medicaid, veterans’ benefits, as well as debt service payments. According to Geithner, $32 billion is due August 3, $23 billion of it for Social Security checks and $1.4 billion to defense contractors. August 4, $87 billion in debt payments are due and another $29 billion in interest payments August 15.

The letter and threats from Wall Street financiers and their credit rating agencies are designed to create a “sky is falling” atmosphere of catastrophe and convince all that payment of the debt is the single most important issue to solve, otherwise, as Obama is now putting it, we face “Armageddon.” Everyone is to accept the monopoly dictate that the responsibility of government first and foremost is to guarantee that “The U.S. government not default in any way on its fiscal obligations” to the financiers. The central issues of who produces the wealth and who controls the economy are left in the dark, while all are to submit to the dictate to pay the debt, or else.

The debt and deficit issues are concoctions of the rich to increase their claim on the social wealth produced by the working class. The current threats represent the demands of the monopolies to secure an even greater portion of the public treasury and eliminate any notion that government has responsibility to the public — to defending public right and restricting monopoly right.

Letter from the Monopolies

The President of the United States, The White House Washington, DC 20500
Members of the United States Congress, United States Capitol Washington, DC 20510

Dear Mr. President and Members of Congress,

We believe it is vitally important for the U.S. government to make good on its financial obligations and to put its fiscal house in order. With our nation on a sound fiscal footing, we are confident that America’s businesses and entrepreneurs will foster generations of high value, well paying jobs and contribute to a prosperous future. To this end, we believe now is the time for our political leaders to act.

First, it is critical that the US government not default in any way on its fiscal obligations. A great nation - like a great company - has to be relied upon to pay its debts when they become due. This is a Main Street not Wall Street issue. Treasury securities influence the cost of financing not just for companies but more importantly for mortgages, auto loans, credit cards and student debt. A default would risk both disarray in those markets and a host of unintended consequences. The debt ceiling trigger does offer a needed catalyst for serious negotiations on budget discipline but avoiding even a technical default is essential. This is a risk our country must not take.

Second, our political leaders must agree to a plan to substantially reduce our long-term budget deficits with a goal of at least stabilizing our nation’s debt as a percentage of GDP — which will entail difficult choices. The resulting plan must be long-term, predictable and binding. As businesses make plans to invest and hire, we need confidence that, in the absence of a crisis, our government will not reverse course and return to large deficit spending.

Now is the time for our political leaders to put aside partisan differences and act in the nation’s best interests. We believe that our nation’s economic future is reliant upon their actions and urge them to reach an agreement. It is time to pull together rather than pull apart.


Kucinich: Debt Political Theater Diverts Attention While Americans’ Wealth Is Stolen

Text of Ohio Congressman Kucinich’s Remarks in the House of Representatives:

The rancorous debate over the debt belies a fundamental truth of our economy — that it is run for the few at the expense of the many, that our entire government has been turned into a machine which takes the wealth of a mass of Americans and accelerates it into the hands of the few. Let me give you some examples.

Take war. War takes the money from the American people and puts it into the hands of arms manufacturers, war profiteers, and private armies. The war in Iraq, based on lies: $3 trillion will be the cost of that war. The war in Afghanistan; based on a misreading of history; half a trillion of dollars in expenses already. The war against Libya will be $1 billion by September.

Fifty percent of our discretionary spending goes for the Pentagon. A massive transfer of wealth into the hands of a few while the American people lack sufficient jobs, health care, housing, retirement security.

Our energy policies take the wealth from the American people and put it into the hands of the oil companies. We could be looking at $150 a barrel for oil in the near future.

Our environmental policy takes the wealth of the people — clean air, clean water — and puts it in the hands of the polluters. It’s a transfer of wealth, not only from the present but from future generations as our environment is ruined.

Insurance companies, what do they do? They take the wealth from the American people in terms of what they charge people for health insurance and they put it into the hands of the few.

We have to realize what this country’s economy has become. Our monetary policy, through the Federal Reserve Act of 1913, privatized the money supply, gathers the wealth, puts it in the hands of the few while the Federal Reserve can create money out of nothing, give it to banks to park at the Fed while our small businesses are starving for capital.

Mark my words — Wall Street cashes in whether we have a default or not. And the same type of thinking that created billions in bailouts for Wall Street and more than $1 trillion in giveaways by the Federal Reserve today leaves 26 million Americans either underemployed or unemployed. And nine out of ten Americans over the age of 65 are facing cuts in their Social Security in order to pay for a debt that grew from tax cuts for the rich and for endless wars.

There is a massive transfer of wealth from the American people to the hands of a few and it’s going on right now as America’s eyes are misdirected to the political theater of these histrionic debt negotiations, threats to shut down the government, and willingness to make the most Americans pay dearly for debts they did not create.

These are symptoms of a government that has lost its way, and they are a challenge to the legitimacy of the two-party system.


Why is the Pentagon Not Part of the Deficit Discussion?

In all the talk about the federal deficit, why is the single largest culprit left out of the conversation? Why is the one part of government that best epitomizes everything conservatives say they hate about government — waste, incompetence, and corruption — all but exempt from conservative criticism?

Of course, I am talking about the Pentagon. Any serious battle plan to reduce the deficit must take on the Pentagon. In 2011 military spending accounted for more than 58 percent of all federal discretionary spending and even more if the interest on the federal debt that is related to military spending were added.

In the last ten years we have spent more than $7.6 trillion on military and homeland security according to the National Priorities Project. In the last decade military spending has soared from $300 billion to $700 billion a year.

When debt ceilings and deficits seem to be the only two items on Washington’s agenda, it is both revealing and tragic that both parties give a free pass to military spending. Representative Paul Ryan’s much discussed Tea Party budget accepted Obama’s proposal for a pathetic $78 billion reduction in military spending over 5 years, a recommendation that would only modestly slow the rate of growth of military spending.

Indeed, the Republican government battering ram appears to have stopped at the Pentagon door. This was evident early on. As soon as they took over the House of Representatives, Republicans changed the rules so that military spending does not have to be offset by reduced spending somewhere else, unlike any other kind of government spending. It is the only activity of government they believe does not have to be paid for. Which brings to mind a bit of wisdom from one of their heroes, Adam Smith. “Were the expense of war to be defrayed always by revenue raised within the year wars would in general be more speedily concluded, and less wantonly undertaken.”

The Tea Party has only strengthened the Republican Party’s resolve that the Pentagon’s budget is untouchable. An analysis by the Heritage Foundation of Republican votes on defense spending found that Tea Party freshmen were even more likely than their Republican elders to vote against cutting any part of the military budget.

What makes the hypocrisy even more revealing is that the Pentagon turns out to be the poster child for government waste and incompetence.

In 2009 the Government Accountability Office (GAO) found “staggering” cost overruns of almost $300 billion in nearly 70 percent of the Pentagon’s 96 major weapons. What is more, the programs were running, on average, 21 months behind schedule. And when they were completed, they provided less than they promised.

The Defense Logistics Agency had no use for parts worth more than half of the $13.7 billion in equipment stacked up in Pentagon warehouses from 2006 to 2008.

And these are only the tips of the military’s misspending iceberg. We really do not know how much the Pentagon wastes because, believe it or not, there has not been a complete audit of the Pentagon in more than 15 years.

In 1994, the Government Management Reform Act required the Inspector General of each federal agency to audit and publish the financial statements of their agency. The Department of Defense was the only agency that has been unable to comply. In fiscal 1998 the Department of Defense (DoD) used $1.7 trillion of undocumentable adjustments to balance the books. In 2002 the situation was even worse. CBS News reported that Secretary of Defense Donald Rumsfeld admitted, “We cannot track $2.3 trillion in transactions.”

How did Congress’ respond to DoD’s delinquency? It gave it absolution and allowed it to opt out of its legal requirement. But as a sop to outraged public opinion Congress required DoD to set a date when it would have its book sufficiently in order to be audited. Which the Pentagon dutiful did, and missed every one of the target dates. The latest is 2017 and the Pentagon has already announced it will be unable to meet that deadline.

Adding insult to injury, last September, the GAO found that the new computer systems intended to improve the Pentagon’s financial oversight are themselves nearly 100 percent or $7 billion over budget and as much as 12 years behind schedule!

The Pentagon is not just incompetent. It is corrupt. In November 2009 the Pentagon’s Defense Contract Audit Agency (DCAA), the federal watchdog responsible for auditing oversight of military contractors, raised the question of criminal wrongdoing when it found that the audits that did occur were riddled with serious breaches of auditor independence. One Pentagon auditor admitted he did not perform detailed tests because, “The contractor would not appreciate it.”

Why would the Pentagon allow its contractors to get away with fraud? To answer that question we need to understand the incestuous relationship between the Pentagon and its contractors that has been going on for years, and is getting worse. From 2004 to 2008, 80 percent of retiring three and four star officers went to work as consultants or defense industry executives. Thirty-four out of 39 three- and four-star generals and admirals who retired in 2007 are now working in defense industry roles — nearly 90 percent.

Generals are recruited for private sector jobs well before they retire. Once employed by the military contractor the general maintains a Pentagon advisory role. “In almost any other realm it would seem a clear conflict of interest. But this is the Pentagon where such apparent conflicts are a routine fact of life,” an in-depth investigation by the Boston Globe concluded.

U.S. military spending now exceeds the spending of all other countries combined. Knowledgeable military experts argue that we can cut at least $1 trillion from the Pentagon budget without changing its currently expressed mission. But a growing number believe that the mission itself is suspect. Economic competitors like India and China certainly approve of our willingness to undermine our economic competitiveness by diverting trillions of dollars into war and weapons production. Some argue that all this spending has made us more secure but all the evidence points in the opposite direction. Certainly our $2 trillion and counting military adventures in the Middle East and Afghanistan and Pakistan have won us few friends and multiplied our enemies.

Defense experts Gordon Adams and Matthew Leatherman, writing in the Washington Post offer another argument against unrestrained military spending. “Countries feel threatened when rivals ramp up their defenses; this was true in the Cold War, and now it may happen with China. It is how arms races are born. We spend more, inspiring competitors to do the same — thus inflating defense budgets without making anyone safer. For example, [Secretary of Defense] Gates observed in May that no other country has a single ship comparable to our 11 aircraft carriers. Based on the perceived threat that this fleet poses, the Chinese are pursuing an anti-ship ballistic missile program. U.S. military officials have decried this “carrier-killer’‘ effort, and in response we are diversifying our capabilities to strike China, including a new long-range bomber program, and modernizing our carrier fleet at a cost of about $10 billion per ship.”

For tens of millions of Americans real security comes not from fighting wars on foreign soil but from not having to worry about losing their house or their job or their medical care. As Joshua Holland, columnist for Alternet points out 46 states faced combined budget shortfalls this year of $130 billion, leading them to fire tens of thousands of workers and cut off assistance to millions of families. Just the supplemental requests for fighting in Iraq and Afghanistan this year were $170 billion. […]

This March Reuters released a new poll that found the majority of Americans support reducing defense spending. […]



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