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Debt-Ceiling and Government Shutdown Conceal Larger Truths

by: Milosh Marinovich
October 30, 2013

By Milosh Marinovich

It is the beginning of the end of our world as we know it. Doom is the operative ethic. Or so our government would have us believe.

By now we’ve all been privy to the ominous debt-ceiling and government shutdown debate, which ended on Wednesday night with a bipartisan agreement that will see the government open for business the next day. Many of us were affected by the shutdown. And we were all warned of the looming possibility of the dreaded default – higher interest rates, inflation, a rise in unemployment, a catastrophic decline in both global and domestic markets, a halt to social security, and a full-fledged economic depression. The only problem is that it was all an illusive misdirection – a rabbit in a hat meant to distract us from the real causes of our overwhelming $16.7 trillion debt.

Let’s make one thing clear, the corporate interests that control this country and its politicians would have never allowed the government to default. The cataclysmic financial losses that would occur and the weakening of the corporate apparatus would be more than enough reason for companies, like Goldman Sachs and JP Morgan Chase, to withhold all campaign donations to politicians. And that my friends, is a Beltway and Wall Street nightmare that our government is designed to avoid – for obviously selfish reasons.

Instead, let us entertain the idea that threats of a default were nothing more than a manipulative scare tactic being used for leverage by both monochromatic parties. On one hand, you had Republicans who were trying desperately to cut funding to social security and Obamacare – refusing to accept any deal that didn’t see a slashing of those budgets. This is nothing new, as Republicans have made it a constant priority to cut money to most any social welfare funding.

On the other hand, you have the Democrats who were desperately clawing to keep taxpayer money flowing into coffers of the various health insurance companies that are the real winners of our supposedly positive and massive healthcare overhaul. We were told the Democrats were fighting for us, the general populace, in that they wanted to assure everyone “fair and equal” health coverage, but you tell me what’s fair about forcing 45 million uninsured people to pay for health insurance they can’t afford – it’s not as if these individuals avoided getting health coverage for fun. And those individuals who so painstakingly support Obamacare, claiming it will reduce rates for everyone, need to take a closer look at what they’re being sold. For example, the deductibles alone on many of these plans can approach $10,000 – meaning you’ll have to pay $10,000 out of your own pocket before your insurance companies cover any of your costs. The only thing Obamacare is assuring is that health insurance companies will gain 45 million new clients. So you tell me who the real winner is.

But I digress. Since 1977, there have been 17 shutdowns, according to the Congressional Research Service, including a 21-day shutdown under Bill Clinton’s watch in 1995. Shutdowns are nothing new and as I’m sure you’re aware, we’ve yet to go into default as a result of any of these shutdowns. This, apparently, is something most of our news media was going to great lengths to avoid discussing. Instead, we got a mix of threats from politicians and constant reminders of an impending doomsday from media outlets.

The president and Democratic leaders were constantly telling us that the government would not be able to pay what it owed on the national debt, creating the danger of default. Most people know very little about how our government spending works, so this argument seemed plausible. Let me stress though that tax money keeps coming into the Treasury Department during a shutdown, and it exceeds the interest that has to be paid on the national debt. Even if the debt ceiling was not lifted, it means that government would not be allowed to run up new debt. It doesn’t mean that we would be unable to pay the interest on existing debt.

We must also point out that it was Democrats – the supposed party of the people – and not Republicans who initiated this shutdown. Expenditures for our federal budget were determined, agreed upon, and passed in Congress with the sole exception of money set aside for Obamacare. If Democrats had wanted to, they could’ve allowed all other government spending to continue unimpeded (except Obamacare), but they wanted to use the shutdown as leverage to assure that no funds would be taken from Obamacare.

Nevertheless, we found ourselves in the midst of a government shutdown and while leaders of both parties seemed remorseless, regular citizens were taking the brunt of the effects. Thousands of federal employees were furloughed. As a result, national parks, libraries, and museums were closed, which was harmful to many tourist-based businesses; the Food and Drug Administration had to cut back on food inspectors; and perhaps most shockingly, no money was available to pay the administrative costs of the Special Supplemental Nutrition Program for Women, Infants and Children – meaning mothers in need of assistance didn’t get enough food to feed their children. What’s worse is the fact that once we really dig into the deal that was reached between both parties, we will surely see a cut to social programs, as they are the first thing to go in any “compromise”.

Meanwhile, The U.S. Department of Defense awarded 94 contracts worth over $5 billion, including purchases for spy satellites, body armor and drones, on Sept. 30, the day before the government shutdown and at the end of the federal fiscal year. So while we didn’t have enough money for mothers to feed their children, we did have enough to send unmanned aircrafts to bomb villages full of innocent people.

The sad reality of this country is that our military, or defense budget, should be the first place we make cuts. It is the most bloated and wasteful part of our budget. Last year, official government records indicate that 25% of our federal budget went to defense, which includes weapons contracts and other corporate-related spending. Compare that to just three-percent that we spent on educating our children. What twisted logic could conjure up such reckless spending?

I know many of you out there argue that we need to defend ourselves from terrorist attacks, but consider the fact that in 2012 we spent more on defense than the next 10 countries combined, or just under 50% of the world’s expenditure on defense. The threat of terrorism is just as real in countries like the UK, yet they spent a fraction of what our government spent on defense.

The current administration is quickly turning into a big bad Bush administration in sheep’s clothing. It’s is on pace to spend more money on defense than any previous administration, including staunch military supporters like Reagan and George W. Bush.  In 2010, Carl Conetta, co-director of the Project on Defense Alternatives, stated that the Ronald Reagan administration spent $4.1 trillion on the Defense Department, the Georgia W. Bush administration spent $4.65 trillion and “Barack Obama plans to spend more than $5 trillion.”

In addition, if we compare our defense spending throughout the 20th century to today, we get an even grimmer picture.  According to the Center for Defense Information, 2011’s $725 billion defense budget dwarfs the Pentagon budget of $444.6 billion in 1946 or the $460.4 billion we spent in 1968, the highest yearly amount during the Vietnam War; and even the $443.4 billion spent in 1988, the highest during the eight years of the Ronald Reagan administration’s massive military buildup. As we can see from these numbers, the general theorem that Republicans are the sole lobbyists and pushers for defense spending is highly inaccurate.

But why would a president who’s always claimed to abhor war – who in fact was aided in winning his first election because he didn’t vote for a war in Iraq – spend so much on defense? The simple answer is corporate interest. Just take a look at the stock price of companies like Boeing, Lockheed Martin, and Raytheon – three of our country’s largest military suppliers.

When all three companies experienced a downturn in their stock price earlier this year, our president immediately threatened military action against Syria. Even though a full-fledged attack on Syria never materialized, each of those three companies saw a huge spike in their stock. Just the threat of military action was able to raise their stock prices to a yearly high. But this shouldn’t surprise anyone. The military-industrial complex donates millions of dollars a year to politicians – Obama included. So, of course, they must return the favor by proposing favorable budgets or illegal, unnecessary, and misleading military interventions. That way we have an excuse to buy boatloads of weaponry from these companies. Corporate interest is so ingrained in our politics that we really should be calling our country a corporate welfare state. How else do you explain a developed country that refuses to provide its citizens with universal healthcare, but thinks nothing of spending over $1 trillion to bail out banks and insurance and auto companies?

The best question to ask, however, is what could be done with the money we waste on defense. Does it shock you to know that, according to the Hunger Project, $30 billion is all it would cost to end world hunger?

If you’d prefer to use that money on our own people, how about using $70 billion to give universal healthcare to the uninsured – a measly penance for something that could save us up to $1.1 trillion in 10 years according to the American Medical Student Association. That kind of money could take a big chunk out of our ever-growing debt, as could a steep decline in defense spending.

Or how about we invest in the education of our children, which is something we’ve long forgotten about. America ranks in the latter teens for every major educational measurement (e.g. – reading, math, and science competence). That is a sad fact to accept for a country that’s supposed to be the richest and most powerful in the world. Any way you look at it, we’d be far better off spending upwards of half our defense budget on a plethora of other social, medical, and educational initiatives that could actually benefit the citizens of this country. Even if we were to cut our defense spending in half, we would still be spending more on defense than any other country.

Perhaps the politicians are right. Perhaps today’s world is all gloom and doom. It’s just not for the reasons they’ve put forth.

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