Reading notes: Raymond Lotta on the debt ceiling debate & the world economic crisis

Revolution Interviews Raymond Lotta:
The Debt Ceiling Debate, Global Crisis, and Savage Austerity


....put this fiscal emergency in global perspective, and trace the development of the larger global economic crisis.

....U.S. banking system, with its extensive and deep credit markets, and the dollar, which is the main currency in the world economy, are linchpins of U.S. imperial hegemony in the world capitalist system.

2009.... financial crisis had developed into a generalized economic downturn affecting the entire world economy.... volume of trade between countries fell sharply. World industrial output fell.

....to stimulate major growth....Obama administration undertook a spending program that involved government expenditures on goods and services, various infrastructure and energy projects, tax credits, unemployment extensions, and some financial assistance to the states.
....but it didn’t.... major growth

.... challenge for the ruling class now is to work down debt in a way that does not cause major disruptions to these economies.

.... very unstable situation. And how the U.S. manages and finances government debt will have big effects on the world economy.

.... state of the world economy.... not recovered from the financial crisis and steep downturn in 2008-09. There are intense competitive pressures in the world economy.

.... taxes on huge capitalist corporations.... cut in to their ability to gain competitive position and advantage in the global struggle for markets, for new technologies, and their ability to buy out other firms.

.... major realignments are taking place in the world economy.

.... China emerged as the second largest economy in the world. It will soon overtake the U.S. as the world’s largest manufacturer.

....position of the U.S. dollar is eroding. It faces new competitive threats.

.... constricts the maneuvering room of U.S. imperialism, while conditioning policy responses and intra-ruling class debate.

.... U.S. imperialists face a major contradiction.
....huge and mounting debts. The U.S. economy is not growing. Historically, one of the ways this has been dealt with is by increasing government spending with the goal of stimulating the economy. But this results in higher deficits and government debt.

.... Things do not have to be this way.

.... socialist society .... meeting the needs of the people, overcoming the great social inequalities of society, protecting the planet, and contributing to the advance of the world revolution. A society aiming for the final goal of a communist world, where human beings everywhere would be free of exploitation and oppression and destructive antagonistic conflicts, where human beings could be fit to be caretakers of this planet.

.... Projecting this vision is a crucial part of building a movement for revolution that can bring such a new society into being.

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.... debt ceiling is the limit imposed on how much money the federal government can borrow to finance its spending.

.... spending includes military expenditures, programs like Medicaid and Medicare, government administration and salaries, and repayment of principal and interest on debt held by investors in U.S. Treasury securities....

.... Three factors are driving the huge .... government debt of the last few years.

....contraction of the economy in 2008-09....

....tax cuts adopted under Bush in 2001 and 2003....

....imperial wars of conquest in Afghanistan and Iraq ....

....military outlays ....$1.2 trillion, or close to 40 percent of the budget, when you factor in CIA and National Security Agency expenditures, nuclear weapons research by the Department of Energy, payment on debt from past wars and weapons systems. All this to maintain U.S. dominance over the planet.

.... 9 to 10 percent of the gross domestic product… which is about three times the average of the last 30 years.

.... It’s no accident. The media, politicians, and so-called experts have framed this in a certain way—and many people have gotten sucked in.

....chauvinist declaration that it would be awful to “America’s standing” if it defaulted on its debt.

.... a compromise between two programs that were BOTH not in the interests of the people.

....struggle over the debt ceiling is an expression of deep problems confronting U.S. imperialism. I am speaking of the effects of the crisis in the world economy… an international economic environment in flux… and real budgetary constraints and contradictions bound up with the vast accumulation of government and private debt.

....ruling class forces have used the specter of default to continue and intensify an unprecedented attack on government social spending on things like education and health and so-called entitlement programs, like Social Security. They are seizing on this moment to ratchet up an ideological offensive aimed at rallying public opinion around the idea that “government is living beyond its means,” that social spending has gotten out of control, the reactionary argument that we all have to stop making demands on government....

.... 1 in 6 workers is unemployed, under-employed, or has given up looking for work because jobs are so few…

.... the average duration of unemployment is now longer than at any time since the end of World War 2.

.... Pew Foundation just released a study on what happened in the 2005-2009 period....wealth .... as measured in homes, cars, savings.... net worth of Latino households fell by a staggering 66 percent, and that of African-Americans fell by 53 percent. One-third of Latino and Black families have zero wealth.

.... Mortgage loans tapped into the savings and future earnings of millions of people. The loans were then bundled into exotic financial instruments and sold on global markets.

.... basic human need, housing, was turned into an object of investment and speculation.

.... more important for banks to assert their property rights than for people to have housing.

.... 25 million people were looking for full-time work last month. 10 million households face foreclosure.

.... now demand of people that they sacrifice to rescue a system that destroys livelihoods, that perpetuates and widens social inequality… it’s obscene. Of course, all of this packaged as everyone “doing their share.”

.... government programs dealing with health, education, housing, and so forth must be slashed.

.... an entire section of the population has been left out of the discourse: the poor and the unemployed. It’s as though, for the ruling class, the word poverty has been expunged from the English language

.... “somehow, the unemployed have become invisible.”

.... Obama has become the leading champion of fiscal austerity, of huge cutbacks in government spending on social programs. On the bogus high moral ground of “bipartisan compromise,” he put before the Republicans a deficit-cutting plan that would add one dollar of new taxes for every four dollars of budget cuts.

.... then a new wave of cuts will be phased in after the 2012 election.

June the American Journal of Public Health published the results of a very revealing study.... quantified how many deaths are caused by poverty, low levels of education, and other social factors in the U.S. It found that in the sample year of 2000, 176,000 deaths were due to racial segregation and 133,000 deaths were due to individual poverty.

.... Medicare and Medicaid cuts are in the offing. What kind of system puts human lives on the chopping block of fiscal austerity? This is the logic of capital.

.... bipartisan consensus about the need for cuts, even as they have disagreements over how to do this.

[roots of acrimonius debate on debt ceiling in Congress]: ....section of the ruling class—mainly right-wing Republicans—who want to go further.
.... dissolve any semblance of a state that engages in spending on social programs. It has very little to do with deficits.... debt wasn’t a big deal for these Republicans when it came to financing the U.S.’s wars for greater empire, it was acceptable to push off the revenue loss of the Bush tax cuts into the future by incurring more debt.

.... bristling at “big government” is ideological. It’s an attack on the very idea that society has any kind of organized responsibility to the well-being of the people.

.... Tea Party gives this a veneer of grass-roots outrage at “government excess.”

.... “pyramid of power” in the U.S.

.... sharply divided at top—again, approximating the Democrats and Republicans. That section of the ruling class roughly corresponding to the Republicans has been on the offensive and moving society in an increasingly fascistic direction. The Democrats sharply differ with Republicans on some of the particulars of how to maintain U.S. global domination and how to maintain “social order at home.” But they don’t differ on whether to do that… that they have basic agreement on.
.... intense struggle, with political and ideological agendas as big factors. The Republicans have had the initiative, and they continue to hold it in this debt battle.

....relationship between the ideological assault and the underlying economics of the budgetary crisis....

....there IS a global economic crisis which is the larger backdrop to all this.

....real crisis which is interacting with, and further fueling, an ideological assault bound up with establishing new norms of social control and repression.

.... There are real imperatives for capital to cut costs and enhance competitiveness. There are real constraints on expansive government spending. This has to do with capitalism’s “rules of the game.” This is a system of production for profit based on the exploitation of wage labor. This is a system of competitive accumulation in which the great powers seek advantage and dominance on a global playing field.