The push to fix the debt is a billionaire- and corporate-financed looting scam

Read that headline again. You knew it was billionaire-financed. You may not have known it’s a corp op as well (not that there’s much daylight between the billionaires and the corps). But mainly it’s just a looting scam, like the Bush (now Bush–Obama) Tax Cuts were nothing but a looting spree.

Who are the looters?

Let’s start here, on the financing, with this from The Professor (my emphasis everywhere):

[T]he deficit-scold movement … by the way, is a hydra-headed beast, comprising many organizations that turn out, on inspection, to be financed and run by more or less the same people; dig down into many of these groups’ back stories and you will, in particular, find Peter Peterson, the private-equity billionaire, playing a key role.

But the deficit scolds aren’t giving up. Now yet another organization, Fix the Debt, is campaigning for cuts to Social Security and Medicare, even while making lower tax rates a “core principle.” That last part makes no sense in terms of the group’s ostensible mission, but makes perfect sense if you look at the array of big corporations, from Goldman Sachs to the UnitedHealth Group, that are involved in the effort and would benefit from tax cuts. Hey, sacrifice is for the little people.

Thus Krugman, who’s not alone in making these points.

How do they loot thee?

Money politics corruption

Money via Shutterstock

Now for the looting itself. First, notice that tax cuts are “core principle” of the self-branded “Fix the Debt” group — which seriously needs a renaming, by the way. I like “Fool the Rubes” myself, since much of the looted money will come from low-income paleface wage-earners who need it most — and who are most likely to be convinced by million-dollar ad campaigns to self-screw in the name of planting the “racial justice for paleface” flag. You know, Wal-Mart shoppers.

So how do they loot thee, those lovable .001%-ers? Let me count the ways:

1. Tax cuts for the Bigs. There’s never yet been a “fix the deficit” push that didn’t have as a “core principle” a simultaneous reduction in federal revenue. This includes Simpson-Bowles — Obama’s hand-picked catfood duo. This includes Obama himself in his last negotiations with Boehner and the AFP-financed “minions of Koch” (sorry, “Tea Party” office-holders). Do click; Obama offered the whole store to Boehner, and Koch said no — last time. This time will be different, since the Kochs, at $50 billion and counting, are not stupid.

Note that this is direct looting, since lower personal tax rates flow directly to the bottom line of humans without any corporate pass-through.

2. Big tax breaks for corps. This is indirect looting, since every dime that adds to a corporation’s bottom line creates a larger pool of corporate wealth that can be looted from within, by the CEO class and their friends, through CEO-controlled “compensation committees.” A huge source of personal .001% wealth is had by keeping corporations “lean and mean” (as in, starved and squeezed) while passing bonuses and stock “incentives” to its officers that are measured in multiples of their annual salaries.

There are many forms of these tax breaks, but here’s a wonderful new one — no tax at all on income earned outside the U.S. (This also saves money on that costly tax amnesty cum “holiday” lobbying.) From Tom Sullivan at bluenc:

The HuffPost’s Christina Wilkie and Ryan Grim point to a report by the Institute for Policy Studies that calls Fix the Debt “a Trojan horse for massive corporate tax breaks,” and provides these findings:

The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.

Add those last two together — the direct looting of the treasury by CEOs and their indirect looting via corporate tax giveaways — and you get situations like the following (Sullivan again):

The CEOs backing Fix the Debt personally received a combined total of $41 million in savings last year thanks to the Bush-era tax cuts. The top CEO beneficiary of the Bush tax cuts in 2011, Leon Black of Apollo Global Management, saved $9.9 million on the Bush[–Obama] tax cuts. The private equity fund leader reaped $215 million in taxable income last year just from vested stock.

24 [Fix the Debt CEOs] received more in compensation last year than their corporations paid in federal corporate income taxes. All but six of these firms reported U.S. profits last year.

Before you think that $41 million sounds like chump change, remember that it’s split only 63 ways. That is, only 63 individuals sucked $41 million out of the government budget.

3. Increasing the retirement age increases the pool of low-wage workers, and by the law of supply-and-demand, further depresses wages in the U.S. In other words, if you keep Gran and Gramps off Social Security and Medicare for another two years (or more), that’s two more years that seniors will be forced to compete with teens, many minorities, and other low-income groups for those valued “Welcome to Wal-Mart” and “Fries with that” jobs.

Law of supply and demand says this drives down the price of labor — at the already low end (which we in the New America call “where the jobs are now”).

What do the Wal-Mart heirs (and the Papa in Papa John’s Pizza) call that? Mission accomplished, baby. It’s a win-win-win.

The Rich and the Rubes

I’ll close with three thoughts:

(1) The very people being screwed are enabling the screwing — without the rubes (sorry, Reagan–Atwater “values-voters”) none of this is possible. The nexus of angry, envious, punishing white racism and pathological, megalomaniacal greed (I’m using those terms clinically) has put us where we are today.

So if you’re looking for perps to blame for the deadly disease we can’t ever shake, blame the Rubes and the Rich — it’s been a joint op. The very people who want to “preserve” the America of their youths — the high-tax, high-wage Eisenhower and Kennedy years of the 50s and 60s — have been Atwatered into turning it over to men and women whose loyalty is to whoever has the most bribe cash in hand. (Can you say Chinese slave-shop owners and oil-soaked Arab despots? I thought you could.) It’s been quite the scam, and we’re closing in on two generations’ worth of watching it.

(2) Ordinarily this looting would sink the country sometime in the next 50 years, all other things being equal. We’re almost a client state now (wait till we find out how much Chinese money went into opposing candidates like Ohio’s Sherrod Brown — that number will come out sometime). Read here about client states, or just watch the Yemeni government cower as we bomb their citizens in the name of American “freedom.”

But the climate projections are so bad — and at this point the CEOs know it (just wait; that post is coming) — that the U.S. won’t be territorially intact by 2060. You read that right — won’t be territorially intact. The logic for this in the next climate post, coming soon. But I don’t see a flaw in the projection.

(3) The U.S. also won’t be economically intact at that point either. As David Graeber brilliantly points out in DEBT: The First 5000 Years, there are quite a few systems that require constant expansion to prevent collapse; stability is not an option. One is any coinage-empire-slavery system — the world has been filled with them, but the Romans will do for an example — that once it ceases to grow, falls apart. (Did you wonder why there were no slaves in medieval Europe — serfs yes, but no slaves — when the entire Roman world was a slave economy? Read DEBT.)

As Graeber also points out, the capitalism practiced today is such a system, not just in macro terms — as a system — but in micro terms as well, at the level of the individual corporation. Ask yourself, what happens to a modern company that ceases to grow? It gets eaten by its competitors; it disappears from the face of the earth. Stability is not an option.

So too the whole consumer-financed system, according to Graeber. The global corporate system requires increasing corporate wealth, driven itself by an increasing consumer population. Now picture a world in which consumerism shrinks. We will get that when economies, driven by regional climate-driven economic catastrophes — and then global population itself — also shrink.

In that shrinking world, corporate activity (buying and selling stuff) will whither, and the looters noted above will simply hunker down to try to live well in a brave new withering world. The rules of that world will be very different from the consumer–looter–corporate-empire world.

But more on that in the next few posts, as we look at (a) the multiple deadlines the nation faces, and (b) which of those will be made moot by the climate catastrophe, and why. For example, in the race between the loss of worldwide farmland and regional mass “depopulation” on the one hand, and loss of manufacturing jobs to Asia on the other, which will catch us by the ankles first? (Hint: Once the population starts shrinking, we won’t be talking jobs.)

Again, it still comes down to the Rubes and the Rich — the same delightful people who thought the Reagan tax cuts meant money for the middle class, think killing climate mitigation (“drill baby drill”) will somehow save their grandkids. Silly them.

This is not over, which is why I keep writing about it, but we need to be stark in order to get real. I know — foolish optimist, I. Still, it’s worth one last try, right? It is for me, at least; it’s why I’m writing about it.

Scheduling note: I’m traveling again starting in just a few days, so posting will be much more intermittent until sometime in the first week of December. I hope everyone had a great Thanksgiving; I’m personally and profoundly thankful for each of you.


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

Share This Post

10 Responses to “The push to fix the debt is a billionaire- and corporate-financed looting scam”

  1. Sweetie says:

    They think it’s their money, and they’ve managed to convince a lot of naive people of that. They’re the “wealth creators”. They’re the “job creators”. They’re the architects/engines of the economy.

    It’s just like eminent domain. Money is a promise made to us that vaporizes as soon as we try to use it to our advantage. We’re supposed to be debt slaves.

  2. Sweetie says:


  3. karmanot says:

    That’s why reign’s of terror follow hubris like revolutions follow tyrannies.

  4. BeccaM says:

    Once again — George Carlin said it best, “They’re coming for your money. And they won’t stop until they have all of it.”

  5. caphillprof says:

    In a just society they would be institutionalized and treated for mental illness. Mitt Romney to the head of the line.

  6. ezpz says:

    “…The faux-debates over budget and taxation are generally misleading and I don’t see much here that enlightens so much as it inflames the debates without adding light. The blame game rolls on without a resolution and the concept of an “economically intact” (isolated and impoverished?) nation persists…”

    Exactly so! And beautifully said.

  7. lynchie says:

    These ass blankets are great at picking on the weak. Poor, old, are perfect targets. all they want is to stop paying their share of SS and Medicare as a payroll tax. They want SS made available to Wall street so that huge lump of money can be mismanaged and lost by the brokers.

    What is it about the rich? Don’t they have a shred of compassion? Don’t they have a sense of responsibility to look after the aged and poor? I am afraid they don’t care about anyone but themselves. They are the most pampered, pay the least taxes, fuck up and get bailed out and then have the balls to suggest that the bottom of the ladder should do more and support the top. Well assholes we have been supporting your life style for long enough time for you to give back or get the fuck out of America.

  8. nicho says:

    A looting scam? Was there ever any doubt? The corporations have been trying to loot the country — and succeeding — for nearly 150 years now. It’s just that we’re approaching the end game. They’ve pretty much won.

  9. Naja pallida says:

    The absence of effective state, and, especially, national, restraint upon unfair money getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise. We grudge no man a fortune which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows. Again, comrades over there, take the lesson from your own experience. Not only did you not grudge, but you gloried in the promotion of the great generals who gained their promotion by leading the army to victory. So it is with us. We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have been gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.

    Of course, the “now” Teddy Roosevelt was talking about was 1910. I’m sure he would be absolutely stunned that we still haven’t managed to solve the major problems of his era, despite two great depressions caused by it.

    They just don’t make politicians like they used to.

  10. Indigo says:

    Um . . . what does an “economically intact” nation look like? The faux-debates over budget and taxation are generally misleading and I don’t see much here that enlightens so much as it inflames the debates without adding light. The blame game rolls on without a resolution and the concept of an “economically intact” (isolated and impoverished?) nation persists. That’s exactly the anti-American sloganeering of our natural enemy, The British, launched after the Treaty of Paris (1781) that they used to justify their systematic attacks on American shipping that led to War of 1812. The US is just an impoverished, debtor nation that should not exist. The thing is that the US actually was impoverished, though no more so than now, and for similar reasons. The Continental Congress was entirely an act of determination with little financial backing. Our revolution was never paid for and is not yet paid for, it’s impossible to conjure that money because it was never there. The United States was in debt before it existed and nothing we’ve done since then has changed that. Where does this silly notion come from that the books have to balance? No they don’t, not as long as we’ve got the will to keep on keeping on. There is no such thing as an “economically intact” nation outside of an occasional Germanic wet dream. The United States has never not been in debt, and there’s no immediately obvious reason why the debt cannot continue to be anchored in a future that never arrives.

© 2019 AMERICAblog Media, LLC. All rights reserved. · Entries RSS