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Prior to this year, rarely has America come close to reneging on its debts. With the Emergency Banking Act of March 9, 1933 FDR dissolved the U.S. Federal Government by declaring it bankrupt and insolvent. The Panic of 1837 likewise flirted with disaster. Its financial crises touched off a major depression lasting nearly a decade until James Polk’s expansionist policies, guided by “Manifest Destiny,” annexed the independent Republic of Texas as a slave state and instigated a border skirmish with Mexico. Polk did so by ordering U.S. soldiers between the Rio Grande and Nueces Rivers, an area both countries recognized as part of Mexico’s state of Coahuila. The armed violation of sovereignty triggered an April 25, 1846 Mexican cavalry attack of U.S. troops under the command of Gen. Zachary Taylor, killing about a dozen Americans, and thusly provoking Mexico into a war for which it was militarily, economically and politically unprepared. In addition to returning General Antonio Lopez de Santa Anna (then exiled in Cuba) to the battlefield at Buena Vista and then to Mexico’s presidency, the war’s bloodshed ultimately led to the Treaty of Guadalupe Hidalgo (Feb. 2, 1848). The terms of that treaty enabled the U.S. to violently appropriate lands it had previously offered to buy and Mexico refused to sell. Not only was it stipulated that Mexico recognize America’s annexation of Texas but California and other Mexican territories north of the Rio Grande had to be ceded to the United States at a bargain price of $15 million. That area now encompasses present-day New Mexico, Utah, Arizona and Nevada. Equally important in solving America’s financial problems at the time, gold was discovered at Sutter’s Mill (CA) just days before the treaty was signed. Prior to Polk’s military plunder, unpaid bills for the Erie Canal and other infrastructure projects, speculative lending practices, sharp declines in cotton prices, collapsed land bubbles, international specie flows and restrictive lending practices in Great Britain had synergized into insolvency. When banks ran out of gold and silver, the United States couldn’t borrow so much as a half cent from the Rothschild’s to pay off its debts. Lacking collateral liquidity and future prospects dim, the entire country was a bad risk. All that changed with Guadalupe Hidalgo’s newly acquired surfeits of west coast gold and Nevada’s 1850 Comstock Lode producing silver.
Prior to the reported agreement with President Biden, the radical right wing controlling the Senate seemed intent on forcing the government to default on its financial obligations, holding citizens and the federal budget hostage by refusing to raise the debt ceiling. At a time of unprecedented income inequality, rather than reduce the deficit by freezing current spending levels and/or boosting revenues by equitably taxing billionaires and corporations, extremists insisted on eliminating or crippling essential social programs instead. Not that certain cuts shouldn’t have been made, just not the ones GOP hijackers use as weapons in their far-flung class and culture wars. The most obvious fat in need of trimming is the country’s gluttonous $877 billion military budget, totaling more than the next 11 nations combined. Besides its irrationally high and wasteful cost, making it the largest government-controlled (i.e. “socialized”) production enterprise in the world, the DOD is rife with fraud and cost over-runs. A recent “60 Minutes” investigation shed light on the billions of dollars in price gouging perpetrated by defense contractors, who ultimately pick the pockets of taxpayers. Rather than decrease military spending to lower the national debt, Republicans actually proposed to increase the $858 billion Pentagon budget, an act of political pandering and reckless brinkmanship turned madness.
Tens of billions of tax dollars could also be saved by ending government subsidies for industries, which exacerbate climate change and global warming, poison the environment and outright kill us. It’s unconscionable, given indisputable scientific and medical facts today, that lobbyists can financially coerce massive subsidies to harmful enterprises from our politicians. Those industries most egregiously include fossil fuels, tobacco, pesticides and other chemical manufacturing. But massive subsidies to factory farms, meat, dairy and livestock industries, fast food chains, and producers of high fructose and palm oil also harm humans and nonhuman animals, destroy precious wildlife habitat, and drive inequality, while wasting water, protein, energy and land. Reminiscent of Benito Mussolini’s famous relabeling of fascism as “corporatism because it is a merger of state and corporate power,” some of our biggest subsidies also go to companies like Boeing, General Motors, Shell-Motiva, Goldman Sachs, Google, Wal-Mart and Abercrombie and Fitch. At a time when corporations are amassing unprecedented wealth and influence by jacking-up prices on gasoline, healthcare, groceries and pharmaceutical supplies, elected officials should concentrate on eliminating tax code loopholes exploited by the rich to avoid paying their fair shares.
It’s ludicrous, therefore, when 60% of our workforce lives paycheck to paycheck, for anyone in Congress to proffer cuts to programs helping the poor, sick, elderly, working class families and kids instead of weaning industrial giants off election-enhancing free lunches. Proposals to extend Donald Trump tax breaks that disproportionately benefited the rich and added corporate capital to our tax burden, increasing the federal deficit by $3.5 trillion, is worse than blatant hypocrisy. It’s become a mass psychogenic disorder affecting rightwing radicals. Equally crazy is pushing to repeal the estate tax which serves to enrich only a handful of multi-billionaires’ families while raising the deficit another $1.8 trillion. This is especially true considering the GOP’s proposed budget to cut non-defense discretionary spending by 22% would have forced an estimated 3/4 million Americans out of work, jettisoned 20 million or more from Medicaid, and eviscerated the Department of Veterans Affairs, Head Start and nutrition services, such as Meals on Wheels. Furthermore, some 80,000 college age citizens could lose their ability to advance their educations if the GOP defunds Pell Grants, another GOP proposed extortion. How much Biden and Democrats may have conceded (to avoid default) to Speaker of the House McCarthy and his unruly fringe remains to be learned. One can only hope it was little and token or national debt will become national purposelessness. Over the past six decades, the national debt ceiling has been raised about 80 times ─ 49 with a Republican in the White House and 29 times with Democrats holding the office. Ronald Reagan alone raised the debt limit 18 times; George W. Bush seven and Donald Trump three. In fact, when Trump was in office the national debt ceiling rose by $7.8 trillion ($19.95 to $27.76 trillion), a 39% jump and third worse in U.S. history behind George W. Bush and Abe Lincoln. Only Trump didn’t fund two foreign wars and a civil conflict as did Bush and Lincoln, respectively. Tax cuts for the wealthy by Bush and Trump have been key contributors to our national indebtedness. Now, according to Moody’s, which Bernie Sanders referenced in an op-ed piece recently appearing in Fox News, ill-targeted spending cuts proposed by GOP lawmakers in Congress would, if passed, cost Americans $10 trillion in household wealth over the next ten years.