BY JULIANNE MALVEAUX
Editor’s note: This column was written befor the passing of the debt ceiling bill.
Our country appears to have avoided default on our debt, based on a deal that was cut Sunday night, and negotiations that will begin Monday morning. Of course, as I write this, there may well be another monkey wrench thrown into the process of compromise, as the Tea Party Republicans have been intransient and completely unwilling to compromise. President Obama and some Democrats, on the other hand, have been far willing to compromise putting everything sacred – Social Security, Medicare, educational programs – on the table while taking other matters, including tax increases on the wealthy, off the table. To swallow deep budget cuts without also looking at revenue increases seems misguided, at best, and perhaps even foolish. Further, to wait until the eleventh hour threatens the sense of security that our elderly, disabled, and others are entitled to. Eventually, this erodes confidence in government and weakens the fabric of civic participation.
The deal will require about $3 billion in deficit reductions, but no increase in revenue. It gives Republicans virtually everything they asked for in the beginning. Congressman Emanuel Cleaver (D-Mo.), chairman of the Congressional Black Caucus, described the deal as a “sugar coated Satan sandwich.” Rep. Raul Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, said this flawed deal “trades people’s livelihoods for the votes for a few unappeasable right wing radicals.” The entirely appropriate stern language, frankly, does not go far enough because it does not factor in the possibility that recession will continue (I know, some people think it is over, but those are the people who are still basking in the benefits of the Bush tax cuts), or become a double-dip recession. Indeed, if this debt deal exacerbates economic hard times, we’ll be sipping on a side of strychnine with that sugar-coated Satan sandwich Congressman Cleaver has described.
Double dip recession? How? Let’s start with high unemployment rates that are likely to get higher when money is taken out of the economy. Let’s add the millions of housing units that are empty, and the foreclosure crisis that has not yet been resolved. More than 28 percent of us have “underwater” mortgages, or mortgages higher than the value of a home. Many are considering walking away from those mortgages, exacerbating the housing crisis. Mix in the effect this months-long debate has had on our investment climate. Last week, the Dow Jones Industrial Average dropped by more than two percent in just one day. A skittish stock market doesn’t