America’s War between Two Worlds

Americans may be living far beyond their means, but talk of national bankruptcy is nonsense. Behind the bitter financial debate, however, a deep political divide is growing.

America’s government employees won’t be furloughed on Friday. The mail will be delivered and people will get their Social Security checks. Government offices, museums, national parks — everything will remain open. At least for the time being. The governmental coronary known in the United States as a “shutdown” is caused by political blockades. If Congress cuts off the funds government needs to operate, everything closes down. But Republicans and Democrats have so far been able to come to no agreement on a new budget, despite the fact that the new fiscal year started back in October of 2010. Now they want to negotiate another two weeks until, March 18. Even Barack Obama is now getting involved. Even? Yes, the president let things drift aimlessly yet again, and now he’s sending Vice President Joe Biden to Capitol Hill. On Sunday, Biden left for a week-long trip to Finland, Russia and Moldova. Go figure.

There’s a lot at stake in the budget squabble. First, there is exactly how much has to be cut. America is suffering a debt crisis. There’s a record deficit of nearly 12 percent of GDP expected in 2011. Washington will have to borrow $1.65 trillion to stay solvent, an unimaginable sum. The Republicans want to save another $61 billion through further cuts in spending. Compared with the enormity of the debt, that’s nothing but a drop in the bucket. If America’s politicians can’t come to any agreement, how do they ever expect to rehabilitate its budget?

But Washington is in check. Behind the debt debate there’s an old battle being bitterly waged about the right direction for the country. The question of how best to get the country out of its financial predicament has been deeply politicized. Everyone suspects that, after the dust settles, there may be a different society, even a different country, depending on who gets into the drivers’ seat.

When Obama came to the White House two years ago, he had big plans. Health insurance for everyone and more participation in the nation’s prosperity: The country was to become more unified. Liberals dreamed of a new progressive era, and Obama actually did accomplish some things since his inauguration. Thanks to his health care initiatives, 32 million more Americans now have health insurance where they previously had none. In combating the financial crisis and the recession, he didn’t rescue the banks and automobile manufacturers; instead, he helped the poor and the unemployed, as well as those states and communities deeply in debt. Had he not done so, the social catastrophe would be far worse today than it is.

Financial problems aren’t insoluble

But all this was possible only because of borrowed money. And the public rightly sensed that their president had no plan to reduce the debt to manageable levels. But that doesn’t mean America’s financial problems are insoluble. America may be living beyond its means, but talk of national bankruptcy is just nonsense. There’s no law of nature that says the United States has to account for 50 percent of the world’s defense expenditures. There’s also no reason why America’s health care system has to remain the most expensive in the world. Medicare and Medicaid alone, the governmental health care programs for the elderly, pay out $60 billion annually for purely bogus claims made by doctors and hospitals. Real reforms that make the bureaucracy more responsive also must be part of economic rehabilitation. Measures must also be undertaken to economize even though they may be painful for many. And in view of the acute financial misery the rest are suffering, why the wealthiest two percent of Americans have to be protected from a return to the same tax levels that existed under Bill Clinton remains a secret to everyone but the Republicans. America’s millionaires certainly didn’t starve during the 1990s.

Obama is now plagued by the fact that he left the thorny debt problem to the conservatives for too long. Fueled by tea party successes, they gratefully used that vacuum in order to propagate their own solutions. They say there must be drastic cuts to social programs, environmental protection and governmental functions where, in their opinion, government has no business in the first place. At the same time, they reject any tax increases out of hand. In states like Wisconsin, Ohio and Indiana, where social programs have already been cut and public employees like teachers and police personnel have been laid off, the fight has long since spilled out onto the streets. The only reluctant odd man out in all this seems to be the president.