Welfare State or Indebted Man

DebtFrench philosopher Michel Foucoult argued that in today’s society, people’s actions as a political and civil collective and as individuals are guided from birth to death in the same way a shepherd cares for his flock. From this it could be said that in countries where authoritarian rule is the dominant force, people have no choice and move in the pointed direction. On the other hand, within democratic societies political parties vie to “shepherd the flock” by appealing to their emotional needs and financial concerns.welfare state or indebted man

Collectivism describes the human characteristic where social institutions such as family, workplace, or society is prioritized higher than the individual. Many believe that the Democrat’s method to controlling the flock has been to create a collective dependency through excessive public services and thus removing the burden of individual financial responsibility.

Individualism on the other hand is the human characteristic where the individual self is prioritized higher than social institutions. The perception of Republicans is that they herd the flock by appealing to a moral sense of individual personal and financial responsibility. Acceptance of government intervention is a sign of weakness and an infringement of personal freedom; collectivism and socialism are considered synonymous.

The actuality is that for more than thirty-five years American society has been shepherded by a small group of financial institutions, large corporations, unscrupulous politicians from both parties, and wealthy individuals. They are relentless and methodical in their insatiable need for continuous financial gain and the power that comes with it.

Shared is a religion with prayer occurring at Wall Street’s alter where salvation is rendered through subjugation of the many to benefit the few. Their offerings are legend, “…to throw destitute families out of homes, allow the uninsured to die, wage useless wars, poison and pollute the ecosystem, slash social assistance programs, gut public education, trash the global economy, plunder the U.S. Treasury…” ~ Chris Hedges welfare state or indebted man

The Holy Grail they seek is for every person to have a lifetime of debt. It is what fuels the financial industry and makes rational people do irrational things to the benefit of their creditors. welfare state or indebted man

Debt and Income Inequality
Most people have one or more loans during their lifetime; education, credit card, auto, small business, mortgage, etc. If repayment requires working overtime or taking a second job, then that’s what a responsible person will do. If it means sacrificing in some way for a period of time, then that is expected. However, is it a level playing field? Will working extra hours or taking a second job eventually “pay off?” Does the sacrifice last months, years, or a lifetime?

A study from the Economic Policy Institute, The Increasingly Unequal States of America reported the following for the twenty-eight year period from 1979 to 2007. The bottom 99% of U.S. taxpayers realized an income growth of 18.9%, less than 1% annually. For the top 1 percent it was 200.5%, or an average of 7.14% per year. In comparison the Federal Reserve reported consumer debt during that same period as having increased 97.45% (3.48% annually).

The same study indicated that for the four year period between 2009 and 2012, income growth for the bottom 99 percent was again negligible. However, the top 1 percent enjoyed real income growth of between 31.4% and 36.8%, a range of 7.85 to 9.2% annually. The reported debt increased by 14.52% or 3.63% annually.

It is obvious that for most there is no light at the end of the tunnel. Yet what motivates an individual to press on in a vain attempt to repay ever increasing debts with an income that remains flat year after year?

A Moral Statement
David Graeber, author of Debt, The First 5, 000 Years, recalls a conversation with an attorney who provides legal support to London anti-poverty groups. Graeber shares with her a historical background of the International Monetary Fund (IMF) with the 1970’s oil crises.

“At that time OPEC countries placed their new riches in Western banks; Citibank and Chase, and other institutions needing to find investment outlets, made loans to Third-World dictators and politicians at very low interest rates. Interest rates climbed upwards of 20% in the early 80’s leading to the Third-World debt crises of the 80’s and 90’s; the IMF stepped in requiring that to obtain refinancing, countries would have to take drastic measures which included abandoning price supports on basic foodstuffs, free healthcare and free education; this of the poorest and most vulnerable people on earth.”

The attorney inquires on his position regarding the debt owed. Graeber indicates his intent was to abolish the debt; “thirty years of money flowing from the poorest countries to the richest was quite enough. Further while dictators and politicians offloaded many of these funds to their Swiss bank accounts, it was the people saddled with the debt.”

The attorney strongly objects, “They’d borrowed the money! Surely one has to pay one’s debts.” At that point Graeber realizes that the attorney’s response was not as an economic statement, but rather as a moral statement.

Money
Maurizio Lazzarato describes this further in The Making of the Indebted Man. Debt has been very effectively built up as an individual moral obligation, as opposed to a society of mutual support. A debtor is held to a high standard to repay what they owe; condemned by society and peers if they fail. It is alike to emotional extortion – rather than a broken knee cap, one’s self-esteem is shattered. The bar however for creditors is set very low; their actions regardless how despicable is to be expected.

By definition an economic debt is the obligation to pay a certain sum of money; a simple, cold, and impersonal transaction. Whereas morality refers to a code of conduct that applies to all who can understand it and can govern their behavior by it … no one should ever violate a moral prohibition.

How then is our sense of morality and justice reduced to the language of a business deal? Why is it that only principle and interest are calculated, but human effects are not? Money. It is what has the capacity to turn morality into a matter of impersonal arithmetic, justifying what would otherwise seem outrageous.

Herding the Flock
Stagnant wages and the guilt-driven need to meet one’s financial obligations; effective levers used by the shepherds on Wall Street and in Washington. Many of the flock have been manipulated to keep working despite stagnant buying power over the past thirty-five years. Their “moral” obligation towards debt has resulted in extending credit payments over longer periods of time. For creditors especially, this is what it is all about – uninterrupted cash flow.

Yet, an increasing number of the flock has wandered off into another part of the pasture – the “Welfare State.” Who are these lost sheep? Presidential candidate Mitt Romney referred to them as the 47 percent, Paul Ryan described them as the “takers.” Within certain arenas of public sentiment they are just plain “lazy.” How will these “cheats” be prodded back to the fields of “eternal debt?” How will they return to paying their “fair share” so that the credit markets will thrive further? Simple, take away the government’s spending power.

“Starve the Beast”
Nobel Laureate Milton Friedman was a strong proponent of the theory – Starve the Beast. He argued that if taxes are cut, “the resulting deficits will be an effective restraint on the spending propensities of the executive branch and the legislature.” A 2012 report from the Congressional Budget Office, Changes in CBO’s Baseline Projections Since January 2001 indicates tax cuts of $2.8 trillion have occurred under the Bush and Obama administrations.

However, the targeted reductions in government have been social programs such as food stamps, infrastructure, social security, Medicare, and Public Education. In comparison military spending, prisons, and weapons have been minimal. The wealthy are happy because they get the benefit of greater tax cuts and most importantly are not affected by cuts in programs used exclusively by the middle-class and poor.

“You see, the rich are different from you and me: they have more influence,” writes Paul Krugman in a New York Times op-ed piece. “It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses and their hopes.”

The outcome of budget reductions is explained by Mr. Krugman in his book End this Depression Now when he discusses – “your spending is my income and my spending is your income.”

  • If unemployment benefits, food stamps, cash aid, and Social Security are reduced or eliminated, those in the population affected will have less to spend.
  • If federal government spending on infrastructure repair and public works projects is cut, those who would have been employed by these projects will have less to spend.
  • If state governments refuse to accept or spend federal funds for infrastructure repair and public works projects, those who would have been employed by these projects will have less to spend.

The End Game
The primary intent in removing social services is not to force those on welfare to find work. It is for the purpose of creating the indebted man. What many do not realize or willfully ignore is that the reductions in spending identified by Mr. Krugman creates a domino effect.

  • Those affected by reductions in federal spending will spend less on goods and services.
  • Those who provide the goods and services will experience reduced income.
  • They in turn have less to spend on their goods and services.

With more people seeking employment, competition for open positions increases, wages at best remain stagnant, more than likely they will decrease. Throw in “right to work” to eliminate collective bargaining and in essence the worker “has no rights.” The morality to repay one’s debts becomes an equal partner with the debt owed to employers for one’s job.

Some will seek out education, often with for-profit schools accompanied by massive loans. To get ahead often means to fall behind. Others look to crime as a means to survival, likely ending up in for-profit prisons. They must now pay their debt to society.

It’s a Big World
Lewis Lapham tells us at the conclusion of his essay Them ; “The geopolitics of money transcends the boundaries and integrity of sovereign states … Beverly Hills and the Upper East Side of Manhattan belong to the same polity as … the yachts moored off Cannes and the Costa Brava … Bali and Miami Beach.”

Mr. Lapham continues “The 5 percent of the population in the upper reaches of net worth … have less in common with their once-upon-a-time fellow citizens of the United States than they do with their counter-parties in Zurich, Bahrain, and Mumbai.”

Translation – when the shepherds are done with America there are other countries and societies to pilfer. Everybody needs a hobby.

Leave a Reply

Your email address will not be published. Required fields are marked *