Why all the wrangling over the debt ceiling?

A lesson for Obama fans – Published on Intrepid Report, by Ismael Hossein-zadeh, July 25, 2011.

In light of the fact that in the ongoing budget negotiations President Obama and the Republican leaders share the common objective of drastically cutting non-military social spending, all the bickering between the two sides seems somewhat puzzling. Considering that their targeted cuts in social spending are almost identical, why do they squabble so much?

In the days when the Democrats and Republicans had marginally different positions regarding fiscal policy, the debate between the two parties over budgetary issues was easy to understand. The Democrats would start from the center left, the Republicans from the center right, and they would usually end up at the center. It was a very subtle division of labor as the two sides provided political cover for each other’s positions or posturing.

The wrangling during the current budget negotiations, however, is somewhat different: it is prompted not so much by a clash of differing positions on the two sides as it is by a competition over the same or similar position by both parties—a competition to win the hearts and minds of the Wall Street bigwigs. The Republicans are angry because they feel that the president has broken traditional rules of the bipartisan game, and has staked out their customary position on the right. And Mr. Obama is incensed because the Tea Partiers within the Republican Party are not playing by the conventional rules, and are not providing him with the tax cover he needs in order to justify his bigger-than the Republicans’ cuts in social spending.

Viewed in this light, the disagreement between Barack Obama and John Boehner is essentially similar to the disagreement between two military generals or commanders who fight a common enemy—in this case the American public—but disagree over the tactics of how to defeat that enemy. In other words, they have a shared strategic goal (of dismantling social safety net programs) but different tactics of achieving that goal. That’s the essence of the ongoing backbiting between the two sides … //

… Two conclusions can be drawn from this brief discussion.

First, it is obvious, as many others have pointed out, the debt ceiling “crisis” is used as a charade by the bipartisan policy makers in both the White House and the Congress in order to recoup from the working and needy people the trillions of dollars they gave (and are still giving) to Wall Street gamblers, to the beneficiaries of war and militarism, and to the super-rich (in the form of huge tax breaks). By the same token, it is also obvious that most of the bipartisan posturing and wrangling, significantly heightened and mystified by the corporate media, is designed to scare the people of a “looming debt crisis,” to hide their real intentions of cutting the people’s bread and butter, and to endear themselves to big business in pursuit of cash contributions for their reelection.

Second, the labor and liberal supporters of President Obama have an important lesson to learn from these budget negotiations: that his economic (like his foreign) policies are not any different than those of his Neoliberal/Neoconservative colleagues in the Republican Party, that his allegiance and dedication is primarily to the corporate welfare system, and that it is time to come out of the denial of these facts, and not waste their votes on Obama in the next presidential election. (full long text).

(Ismael Hossein-zadeh is Professor Emeritus of Economics, Drake University, Des Moines, Iowa. He is the author of The Political Economy of U.S. Militarism /Palgrave-Macmillan 2007, and the Soviet Non-capitalist Development: The Case of Nasser’s Egypt /Praeger Publishers 1989).

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