Why, exactly, do we regard debt as “sovereign”?
Yes, I know that “sovereign debt” is a technical term in economics. But allow me to make a play on words in order to make an important point.
All around the world (except here in the U.S.) we are seeing angry protests erupt against harsh austerity measures imposed by lenders. The Greeks, for example, aren’t stupid: they know that behind the harsh terms laid down by European finance ministers and the IMF there is the braying of the German bankers demanding to be paid in full. Everywhere and in every circumstance, the obligation to pay is held to be sacrosanct. We are told that if this obligation is ever waived, chaos will ensue. It is too rarely noticed that chaos and mass suffering also ensue when debts are paid at the expense of the lives and livelihoods of people who never consciously undertook to borrow the money—who were, so to speak, placed into debt peonage by the elite political class.
As our country’s own debt doomsday nears, it might be good to peel back the simplistic corporate media narrative to see the big picture. We are broke and we’re paying more and more to service our national debt for one primary reason: for decades, but especially during the George W. Bush years, our political leaders have systematically exempted the rich and powerful from the reach of progressive taxation. As Eduardo Porter noted in the New York Times a few weeks back, since 1970 we have cut the effective rate of taxation for our very wealthiest in half: from 35 percent on average to 16.62 percent. Overall tax revenues in the United States haven’t reached 30 percent of GDP since 1965. We spend less on cash transfers to needy people—unemployment insurance, public pensions, benefits for children, etc.—than any other OECD country except for Korea, but we lead the world in lavishing direct and indirect benefits on the well-to-do and corporate special interests.
The twin mantras of the rentier class (“The Debt Must Be Paid!” and “No Taxes for Us —We Won’t Pay!”) create a pincers effect that is, in some cases, quite literally squeezing the blood out of the working poor. And we should not fail to note that in the individual states now facing budget crises—Minnesota being the latest example—the dynamic is exactly the same as in Washington DC: Everyone must sacrifice to balance the budget except for the only people in society who have continued to do very well during the Great Recession: the top 20 percent and the top 5 percent in particular.
My question is why there is still no significant religious component in movements like US Uncut, which organizes to expose the faulty logic and twisted morality of perpetually deferring to financial elites. People standing within the Abrahamic traditions surely appreciate the strong egalitarian currents rippling through their sacred scriptures, right? They know that their faith traditions all commend debt repudiation for the sake of greater social equality and human thriving, right?
Apparently not. This critically important part of our faith inheritance has gone dark, has gone silent, under the spell of our actual functional religion in these United States—the religion of acquisitive individualism. Thomas Frank put it well, if mordantly, in a recent Harper’scolumn:
We like to think of ourselves as a people of untamed independence, but any observer not steeped in our culture would quickly conclude that we are in fact a nation of footmen. We cater to the wealthy in our work lives and we glorify them in our leisure...We take up collections for our public schools because we feel the fortunes of the rich ought to go unencumbered by that burden. Our leaders in Washington are considering cutting Social Security because retaining it might require the rich to chip in more than their current percentage. If it’s a choice between us spending our dotage in helplessness and filth and our high-net-worth friends having to forgo next year’s Learjet, Americans will chose the personal sacrifice every time.
Bitter words, but all too true. I will inject very own note of bitterness by observing that the conservatives who never tire of warning us about the road to serfdom seem to have missed the fact that we are already serfs. Not serfs of a totalizing government, as they fear, but serfs of a totalizing financial system.
If we are ever to break free of the unholy spell cast by the worship of wealth in this country, faith leaders will need to step up in a dramatic way. I hope to live long enough to see it.
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