By: Jamal Kanj*
August 04, 2011
I just came back after spending my
summer break in San Diego, California. Having lived in San Diego for the most
part of my life, I have many acquaintances from all walks of life in the
private business and from the public service sector. During my visit, the state
of the US economy dominated most of our conversations.
Friends who worked in real estate
development or related businesses talked of the lurking economic uncertainties;
others from the public sector opted early retirement to maintain a better
health insurance plan, or stayed on hoping for better days in the future.
In the US, the Consumer Confidence
Report is an important gauge of the state of the national economy. The
consumers I met during my three weeks stay in San Diego, while naturally
hopeful, almost all betokened negatively of their level of confidence of the
economy.
The recent US Congress political
infighting to raise federal debt ceiling level did not help. The Republicans
interpreted their sweep victory in last congressional election as a mandate to
advance their agenda. Aware of the public sentiment regarding the runaway
government spending, the far right wing of the Republicans, known as the Tea party,
played parochial party politics by turning the debate to increase the US debt
ceiling into a political mudsling.
The hidebound Tea party of political
neophytes left a pockmark on the current US economic recovery, and raised
serious questions on the financial viability of the US Bond market. The long
term impact of this fiasco on the overall US economy is yet to be appreciated.
Historically raising US debt ceiling,
allowing the US government to borrow money to pay for its obligations has been
a standard procedure. In fact, since 1917 when the statuary limit was passed by
US Congress, the US government raised the debt limit 78 times, 49 of which were
under Republican administrations and 29 under a Democratic presidents.
Purportedly, Republicans are proponent
of Federal expenditure control. But in actuality, the US debt ceiling was
raised, routinely, more by Republican than Democratic presidents. In fact,
under the latest Republican president, Bush, federal spending rose from $1.9
trillion a year to $3.2 trillion. While under current Democratic president,
federal spending went from $3.2 trillion to $3.8 trillion.
In other words, spending under Bush
increased twice as much as it did under Obama. Indeed, the increase in federal
spending under Obama was mostly due to his $800 billion stimulus package
intended to offset the enormous recession inherited from the Bush
administration.
The increase in federal spending under
Bush, compiled with his tax cut to the rich, depriving the US treasury with
more than $400 billion in tax receipts, portended disaster to the US economy.
After taken over a budget of surplus, Bush left the US treasury with a large
deficit, and the US economy with a huge recession.
Yet, instead of capitalizing on the
Republican’s economic failings, Obama succumbed to the nay Sayers of the Tea
party, and agreed to cut on social domestic programs rather than a fairer tax
system whereby the richest two per cent share the pain with the rest of the
middle class tax payers in reducing the national deficit.
Meanwhile, Democrats and
Republicans can claim America and promote world justice if they are willing to
consider other bold alternatives to reduce the US budget deficit. The US can
contribute to peace in the Middle East and save more than $50 billion in ten
years if it cuts its superfluous aid granted to the non taxpaying state of Israel.
US tax payers are certainly more deserving of the money than the subsidized
illegal Israeli colonies over Palestinian land.
*Jamal
Kanj writes frequently on Arab
World issues and the author of “Children of Catastrophe,
Journey from a Palestinian Refugee Camp to America”, Garnet
Publishing, UK. Jamal’s articles can be read at www.jamalkanj.com, his
email address is jkanj@yahoo.com