A VIEW from LICK SKILLET: GOP doesn’t grasp economics, and never will

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By Gerald Largen

Many of the Republicans who are so overwrought on the issue of the national deficit and resulting national debt claim that this is a moral issue.

In other words, to function on deficit spending and accumulating debt is an immoral activity.

To some of them it is a sin, bordering on being a crime.

Most, if not all, of these Republicans who declaim over the immorality of deficits and debt also speak out loudly in favour of big business and corporations conducting big business, whom they insist can do no wrong.
Yet, anyone, except these Republicans apparently, who knows anything about corporations and big business knows that the overwhelming majority of these corporations and big businesses rely upon their borrowings to run their businesses. Name just about any large corporation and then check the figures and you will find that that corporation has a large debt. So, are these corporations and their decision makers immoral in making their debt decisions? If so, how can these highly moral Republicans consort with and promote these immoral persons? If it is not immoral to conduct business on credit, or carrying a large indebtedness, how can these Republicans say that what is perfectly moral and acceptable on the part of corporate decision-makers is immoral and unacceptable on the part of governmental dedsion-makers? As Mrs. Leonowens had the King of Siam utter: It is a quandary!

Everyone has been taught the evils of debt. And, in general as far as personal debt is concerned indebtedness ought to be eschewed, but unfortunately most folks have found it to be unavoidable, despite having heard the Bard’s advice over and over, i. e.:

“Neither a borrower nor a lender be” saith Shakespeare in Hamlet, Act I, Sc. 4. But we Americans have seemed happier to follow the advice of our fellow countryman, Artemus Ward, who, in his work Natural History, said:
“Let us all be happy, and live within our means, even if we have to borrow the money to do it.”

Even in our earliest times, we tended to aspire to follow Shakespeare’s advice, but even then it was a fruitless aspiration.From these earliest times in colonial Virginia, the wealthiest planters ran up large debts to their London benefactors, which were sometimes paid, and sometimes not. Even the lowliest sharecroppers in Alabama and coal miners in West Virginia “owed their souls to the company store.”

So when our Republican moralists pine for the ethics of an earlier time, they know not what they wish for, and they should remember the caution that we should be careful what we wish for, because we might get it.

Thanks to the miracles of modern commerce and finance, we have come to an almost universal reliance upon the seductiveness and convenience of the credit card, which continues to grow, what with the new arrangements whereby one can buy almost everything from a cup of coffee to a new suit of clothes with a swipe of the credit card. Before that many had the revolving charge account with many merchants.

Simply put, we Americans have always found it good as sellers to give credit, and as customers to buy on time. We buy our houses on mortgages, our cars and major appliances on time payment plans. We have created a great interlocking system of buying and selling based almost exclusively on promises to pay, i. e. by creating debts. We even build churches on borrowed money. Is this immoral? It may be unwise, but immoral? No.

This system of buying and selling on promises to pay/ i.e. creating of debt, is the fundamental reason that the United States became the leading business nation on the face of the earth, and that ordinary wage earners in this country have at most times in the past had the highest standard of living of any peoples in the history of mankind. But this has always been accomplished against the advice and active opposition of those of the Republican type of mindset.

They simply do not have the mental grasp to understand these concepts, just as they do not understand the disconnect in our monetary system between our present money and the old time gold standard, or the silver certificate. They are even more baffled by the concept of the creation and expansion of the money supply by the issuance of debt paper, or the electronic creation of debt through the use of the credit card. In fact, one sometimes wonders just how their brains are wired to be unable to comprehend any concepts beyond the concrete.

Time and time again these folks have led us into Panics, Recessions, and Depressions, yet they never seem to learn, and continue to repeat themselves by doing exactly the same things, even though proven wrong, over and over again while fervently expecting a different result this time.

They will never learn, even when they take us over the brink into fiscal and economic chaos, but as long as we allow them to engage in the national decision making process, we will be struggling for our lives seeking to emerge from each Republican-created state of chaos.

But, what can one expect from a group that exclaims over the economic wisdom of a Paul Ryan, and still do not recognize the wrong-head, if not evil, intent of a Phil Gramm, Republican former Texas Senator, to whose manipulation we owe much of the financial meltdown from the repeal of the Glass-Stegall Act, and elimination of many other time-proven restrictions on the activities of the banking community.

As stated in the headline to this piece: the “GOP doesn’t grasp economics, and never will.”

As long-time readers of this column will recall, we have put forth the proposition that there is no genuine unsolvable problem with the financial situation of the Social Security system requiring any drastic remedies, such as further raising the retirement age, or cutting the benefits, or means-testing for receipt of benefits, (which would ultimately end up with most people regarding it as a welfare programme or charity, rather than as the Old Age and Survivors Insurance Plan as originally intended.)

Instead, we have insisted that all that is needed is to raise, or remove, the monetary cap on contributions, which is presently just over $100,000, upon which the percentage rate is calculated.

Despite what we regard as the obvious, and common sense approach to resolving this anticipated problem, which is still over twenty years in the future, we have heard of very little support to this idea of raising or removing the cap. Therefore, you can imagine our surprise, and delight, to find a story in Monday’s Chattanooga Times Free Press, on page A3, written by Matt Sedensky for The Associated Press, entitled “Older Americans nix benefit changes,” which reported on an AP-NORC Center poll of Americans over age 50, and showed that 61% of those polled voted favourably on this proposition:

“Raising the cap on income subject to Social Security taxes, so that those with higher incomes pay taxes on more of their wages?”

The result is 61% for, 25% opposed, 10% neither favor nor oppose, and 3% don’t know.

Thus, almost two-thirds of the plus-50 population agrees with our position, which is comforting to know.