The Dispute Over the Nation

The campaign for the presidential election of 2012 is starting, and it is reviving a dispute over the nation that has deep historical roots. The Republicans will return to the old refrain of the Democrats’ addiction to taxing and spending.

At a time when the country’s economic recovery remains fragile and the unemployment rate barely decreases, President Barack Obama has made a politically risky decision. Ignoring the demand of the left, and instead of creating a new incentive program to continue revitalizing the economy and reducing unemployment, Obama has engaged in the political arena with a bold plan to deal with the country’s huge budget deficit. The decision is risky because austerity programs are never popular, nor do they reduce unemployment. However, the budget deficit is so severe that if the government fails to restore the country’s fiscal credibility, it could well face the kind of debt crisis that now afflicts Ireland, Greece, Portugal and Spain. To solve the problem, Democrats and Republicans have presented projects that emphasize the abysmal differences in their respective philosophical views, reviving a dispute over the nation that has deep historical roots.

The Republicans’ plan is based on the radical proposal of Rep. Paul D. Ryan. He introduces, among other things, the disappearance of the health care program called Medicare, which is for people over 65 years of age, instituted by Lyndon Johnson in 1965. He also developed the Medicaid program, which assists the poor and disabled.

To end the government subsidy to Medicare, Ryan suggests that beneficiaries be given a certain amount of money so they can buy health insurance. Since he knows that the fixed amount would be insufficient to pay the expense, he proposes that the elderly themselves would pay the difference. According to independent auditors, with such a disbursement, only one in five retirees would be able to do so.

Adhering to the Republican creed of not raising taxes, Ryan demands that the tax cuts for the rich that George W. Bush imposed, and are currently still in place, be kept intact. He also calls for a tax reduction from 35 to 25 percent that millionaires and corporations have to pay, so that they can create more companies. Ronald Reagan and Bush Jr. said the same thing to extol the virtues of the famous “trickle-down” theory. A “trickle down” has never served to stimulate economic growth, or anything else, besides further enriching the very rich.

Obama proposes to reduce the cost of Medicare, not by dismantling it, but by reducing costs, avoiding waste and using the tremendous purchasing power of the government to obtain discounts from drug manufacturers — a common practice that the government prohibits because there is a law that prevents it. Obama admits that deficit reduction will require raising taxes, limiting the deductions of the top 2 percent of taxpayers and letting the tax cuts expire for those earning more than $250,000 a year. He has also proposed cuts in discretionary items and the defense budget. Such a proposal,at a time when the country is fighting on three fronts has enormous political risks.

Looking ahead to the presidential election of 2012, it is clear that the Republicans will return to sing the old refrain about the Democrats’ addiction to taxes and spending. Obama’s gamble is to appeal to his base and to the middle class, which form the independent core, while vigorously denouncing the conspiracy between the Republicans and the 1 percent of the population that controls a third of the country’s wealth. Between 1979 and 2007, they increased their income by 13 to 123 percent, while the government reduced their taxes by 20 to 30 percent.

Who would you prefer?