Home > political-economy > Anarchists, libertarians and Marxists must prepare to fight an increase in the debt ceiling

Anarchists, libertarians and Marxists must prepare to fight an increase in the debt ceiling

One of the first battles of 2011 will come in the spring as the Washington establishment seeks to gain approval to raise the debt ceiling. Anarchists, libertarians and Marxists will be tested on whether they are satisfied to be appendages and compliant tools of the two parties, or are prepared to strike out on their own in preparation for the 2012 election season.

No one should be confused about this issue: It is a life or death moment for the bloated Washington machinery of repression and imperial expansion and the increasingly heavy debt servitude of the public treasury to global banking interests. Here is how one writer put it:

The tax-cut war is over for now. “Don’t Ask, Don’t Tell” repeal has been signed into law. The New START treaty has been ratified. But another big battle between Democrats and Republican is looming. The subject is something most Americans have likely never heard of—the debt ceiling. And, unlike the lame-duck battles that somehow found their way to happy conclusions, this one could very easily end in disaster.

The debt ceiling does exactly what it sounds like it does: It caps the total amount of money the government is allowed to owe. Because the government keeps running deficits, it keeps bumping up against it, and Congress then has to increase the limit to keep the government going. Right now, the national debt stands only $400 billion short of the $14.3 trillion ceiling, which means that some time in the next few months Congress will need to vote to raise it.

It’s a safe bet that most politicians would be extremely reluctant to cast such a vote. Deficit reduction was a major component of the Republicans’ battle cry this past electoral season, and Democrats are no more likely to embrace a measure that explicitly allows for more debt. But it’s a necessary evil: Failure to raise the ceiling could lead to full-fledged U.S. default—that is, the inability to make scheduled interest payments on existing Treasury bonds and other government debts.

It gets better: according to Zero Hedge, Washington may need not one but two debt ceiling increases in 2011, and as many as 8 by 2015:

As Zero Hedge has long been predicting, we anticipate roughly $2 trillion in incremental debt per year. Surprisingly we are not far too off from where the “debt clock” sees US leverage in 5 years. At an estimated $24.5 trillion in federal debt, our $2 trillion per year run rate is spot on. Another thing that is spot on: our prediction that the US will need not one but two debt ceiling increases in 2011. And probably 6-8 over the next 5 years.

Already wild stories of impending disaster are being ginned up in an attempt to shape public opinion on the issue through fear:

Recent history provides a sense of just how scary this would be. “The reason the markets calmed down [during the financial crisis] is that we took [the banks’] toxic assets and handed the financial institutions Treasurys,” says Kevin Hassett, a scholar at the American Enterprise Institute. “If we’re in a default situation, the Treasurys themselves are the toxic assets, and it’s not clear what we can hand anybody to calm them down.” Banks and countries like China would view American debt as a severe liability, and markets would be thrown into chaos. Admittedly, this scenario is unlikely, since the Treasury Department can ward off default for months by taking extreme steps, such as raiding Social Security or civil-service pensions. But even if we don’t default, a protracted failure to raise the debt ceiling risks other dire economic consequences by making it look like the United States is ungovernable and a bad place to invest.

Folks, Washington NEEDS this vote, and they are going to win it by playing every wedge issue, and divisive card in the deck.  The debate over the debt ceiling is going to be staged as a fight between “austerity” and “fiscal sanity”; with Democrats playing the “Republicans hate the poor” card, while Republicans scream about “Obama’s socialist agenda”.

Those on the Left can expect to be hit with image after image of “the suffering masses”, as the Democrats accuse the Republicans of being willing to sacrifice working families, the poor and “the middle class” with an outrageous austerity the likes of which, they will swear, has never been seen in modern history — they will go on in this vein until Obama announces he has secretly cut a deal with the GOP leadership in the House behind closed doors.

Those on the Right can expect Republicans to spend a lot of time on Fox NEWS complaining vociferously about the rising deficits and imminent collapse of the national economy and even morality itself under the dead weight of Washington’s profligacy, even as they meet secretly with their Democrat counterparts to work out a “deal” to trade more debt now for another worthless promise of a balanced budget tomorrow.

Without raising the debt ceiling, Washington will have great difficulty funding its ongoing occupations of Iraq and Afghanistan, the bailout of the too big to fail banks, and its massive machinery of domestic repression. No matter the contours of this partisan bickering, it will be a fight staged for public consumption that ends in a conclusion on which both wings of the Washington establishment have already agreed.

Anarchists, libertarians and Marxists need to help folks both on the left and the right to understand that the debt ceiling itself is the issue — and, if Zero Hedge is correct, we will have 6-8 opportunities to ram this lesson home over the next five years. If, however, anti-statists get caught up in the public circus that the debate over the debt ceiling promises to become, we will forfeit a good chance to put a nail in the coffin of the State.

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