No, not really. But part of me is tempted by the notion. Why? Because I have some real doubts about our political system's ability to resolve these problems on its own. The demands of creditors and the political realities of massive austerity could wake us up to the fact that the world's largest economy requires better stewardship, and that there is a dangerous ideology afoot, and it's not socialism. Here's what I mean:
National debt crises are political crises. The political crisis of debt often stems from logical flaws in capitalism and democracy.
First, capitalism. Employers are dependent on people buying what they sell, but at the same time, each employer would like to pay its employees as little as it can get away with. This works well as long as there's enough demand both for the goods the employer sells, and for the labor they require to make the goods. If demand for the goods slips, they lay off the labor that makes them. If they lay off the labor, nobody gets paid, and nobody buys the goods they sell. If nobody buys the goods they sell, they lay off more labor. Marx understood this. So did Henry Ford. That's exactly why he paid his workers twice the going rate-- so they would buy his Model T's. Thus, capitalism's priorities of low labor costs and high demand for what is on offer are in contradiction with one another and posing an inherent threat to itself.
Second, democracy. Politicians are in the business of negotiating their constituencies' priorities with other politicians. Anything else, like wise judgment, sacrifice, good will in negotiation, or moderation are moral considerations that are only adjudicated every few years in elections. Elections, especially when jerrymandering, 24 hour news, campaign finance, and irate fringe elements are involved, don't prioritize for moral leaders interested in the greater good. Even if they did, with endless cheap credit, there's little incentive for a politician to rein in the spending that people like, or to raise taxes to pay for it. Thomas Jefferson understood this. So does The Economist. Thus, democracy always runs the risk of spending too much, and taxing too little.
These are not original problems. What is original is that our democratic problems are magnified by the capitalists themselves, as opposed to the usual coterie of workers demanding rights and benefits, fascists demanding more fascism (which costs money), or generalized corruption that saps revenues, spending, and productivity.
Business interests have spent the past thirty years aligning themselves with America's right wing in order to free up money from labor, loosen regulations, and increase profits. This is nothing new in itself-- it's the success they've had. Business has been hugely successful in fostering political movements that demand policies which reduce federal regulation, depress wages, lower taxes, and spend greatly on agricultural subsidies, defense, pharmaceuticals and hundreds of other business interests that could use a check from Uncle Sam without a lot of strings attached.
Politicians have actually been elected to demand cuts to federal benefits, and industrial policy that supports profits above all else. A powerful group of House members will countencance nothing less without any bait-and-switch on their constituents-- this is just what they said they'd do. Vast sections of the middle class actually believe that cutting the money that props up their own spending power will somehow make all of us rich.
So here we are, cutting taxes and social spending at the threat of a total default on our nation's credit.
The people with money want to pay workers less. Understandable.
They want to pay less in taxes. Who doesn't?
They advocate to cut the subsidies to the very people who we need to spend money right now, and have convinced those people that doing so is the only way out of our mounting debts. Oh crap.
A crisis of capitalism is in an unholy marriage to a crisis of democracy.
The reptilian appetites of business for more money, and greater power have created an ideological monster. Business has created a movement that served its short-term interests very well, but represents a dangerous warping of our nation's priorities. This ideology is communism in reverse, and is as lopsided, power-driven and half-baked an idea as the imposition of such ideology was on the Soviet Union. Without its total defeat and utter discredit, this ideology will continue to erode our institutions and our nation's standing in the world. Economic ideologies, once they have gained traction in a political system, have never gone down without a disasterous fight. We're better off without them.
The healthy tensions of capital versus labor, spending versus austerity have been removed from the political equation. It's all capital, all austerity, all the time, even when all the evidence is that the working guy is suffering, and some spending can help get us back on track.
So I see three possibilities:
1. We we will cut ourselves into fewer government protections, less economic security, and a deeper recession.
2. We reach some middle ground where people can get back to work and continue to scrape by as they have for the past decade. Or...
3. We default and our creditors dictate the terms of repayment instead of our political system, the zealots are thrown out on their ears, and we can get back to rebuilding our nation.
Maybe that last one wouldn't be so bad after all.
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