Monday, 18 July 2011

US taxes lowest for 50 years - Repubs refuse to cut Defence spending

Will Hutton writes:
When President Obama, the supreme rationalist, says that there are just days to avert Armageddon, everyone should sit up and listen. For months, Republicans have used their new majority in the House of Representatives to block any move to lift the artificial cap on the amount the US government can borrow. If by this Friday they still refuse – insisting on up to $4trillion of spending cuts, excluding defence, and no tax increases as the price of their support – then the US will be unable to service its public debts. The biggest economy on Earth will default.

....the Democrats cannot agree to the Republicans' absolutist demands, in part because the arithmetic of deficit reduction does not work without tax increases and cuts in defence spending, in part because they passionately believe that with taxes the lowest for 50 years, the US's rich should share in the pain and in part because in any human exchange there is an element of horse-trading. The Republicans want to suspend the rules by which not just Washington but any political system operates. They want to be political winners who take all, risking even the collapse of the US economy to get their way.
Crazy. Lowest taxes in 50 years? No cuts in defence? The patriot and RonPaul supporting nerds and Troofers need recognise it - the Repubs refuse to cut defence, refuse tax rises on the wealthy, and are prepared to cause Hell to get it. Pointless attacking Obama.....nay, stupid.
President Obama has tried to fashion a bargain with a collection of rightwing politicians that most in Washington regard as both mad and dangerous. Yet, after months of talking, the Republicans will not offer to bargain, causing President Obama to walk out of the talks last Thursday in pure exasperation. It says a lot about American politics and culture that such a passionate minority believes that it can defy not just American political tradition but also the normal terms of trade that define human association.

Everyone expects there to be a compromise at one minute to midnight on the very last day. I am not so sure. These are politicians who in some respects have more in common with Islamic religious fundamentalists than the Enlightenment tradition which gave birth to western democracy. The Tea Party sees neither virtue nor integrity in any position but their own. Nor do many of their number want to build political careers. They have been sent by God and their electors to bring down Washington
But who will get the blame? Obama?
There has always been this fundamentalist strand in US life, but what has inflamed it over the last decade is a twofold process – a wrong-headed understanding of why US economic pre-eminence is being challenged, closely linked to the breakdown of a public realm in which ideas are discussed, traded and exchanged in a climate which respects argument. The abolition of the Fairness Doctrine in 1987, which required all broadcasters fairly to represent all points of view, has created a mass media shouting, ranting, sloganising and overwhelmingly from the political right.

The leader in the charge is Rupert Murdoch's Fox News, a TV channel with an audience of 100 million in which all news and comment have to be shoehorned – subtly in its news operation and overtly in its commentary – into a conservative worldview. It operates, as the former White House communications director Anita Dunn has said, "as either the research or communications arm of the Republican party". Leading Republican stars such as Mike Huckabee or Sarah Palin are on its payroll. Its political shows pull no punches: the hosts are hard-line Republicans. If Fox News were to permit the case for tax increases to be fairly reported or discussed it would not be doing its job. Murdoch, refusing in a Fox News interview last week even to discuss the News of the World, would be displeased.

No explanation of the Tea Party "Real Republican" intransigence over the debt talks is possible without understanding how its political base has been constructed and sustained. But the damage goes well beyond the US getting so close to debt default. It makes rational discussion of wider US policy options close to impossible. Like reporters in the Soviet Union or China, Fox News journalists have to parrot an ideological line: the US economy's dynamism is rooted entirely in sturdy, enterprising, God-fearing individuals threatened only by federal taxes and regulation. Thus the Republican negotiating stance.

Navigating an economy through the aftermath of a credit crunch with a mountainous legacy of private debt and crippled banking systems is enormously difficult. On top, there is the spectre of the implosion of the euro. Yet in the US – and to a degree in Britain – the political right is implacably opposed to the creative public action that in the past has been crucial to success in such circumstances. It is already clear that even if the US avoids default in the weeks ahead, the price will be to so cramp the US government that it can do little or nothing.

Mr Murdoch is apologising this weekend for the behaviour of his papers over phone-hacking. That, as western economies totter on the precipice, is not all for which he has to apologise.

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