EEUU

Capitalism has reached its limits

Juan Torres López

07/10/2013

Opinión

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We are not speaking of a failed African state that has an impoverished public administration. Nor are we referring even to this great economy that is unable to finance basic but expensive health or education services for the whole population. According to the Census Bureau of the United States there are more than 46 million poor people and more or less the same number of people who have no insurance for medical attention in case of illness; and one in every six persons goes hungry (according to Feeding America) while almost 700.000 persons have no housing of any kind.

It gets worse. This is the fact that the most powerful country on earth cannot, day by day, pay for the most elemental activities of their government.

It is true that this is not the first time this has happened. It has happened 18 times since 1976 (the last one was in 1996), and in truth this involves a vile political blackmail on the part of extremist Republicans, when it was the Republicans who created the greatest amount of public debt in the past 35 years. A study done by the Center on Budget and Policy Priorities has shown that 55.8% of the present debt is the result of tax cuts, of the cost of the wars of Iraq and Afghanistan, the costs of the stimulus of G. Bush and the Reagan military expenses and tax cuts, while the policies of Clinton and Obama have contributed only 28%.

The truth is that behind this measure there is no serious reason that requires cuts in public expenditures.

The United States could continue to finance public services, now being cut, without any need to cut even one dollar in expenditures, and could even increase them to cover needs of the population with lowest income.

To say that these cuts are necessary in order to limit deficits and the debt is a fallacy that hides the truth of the matter: it is military spending (which represents something more than the total deficit foreseen for 2013) and, above all, tax cuts inflicted over the past thirty years in favour of the rich and big business, that are responsible for the public debt.

According to a study by Citizens for Tax Justice, the cuts in financial support for education in the United States amounted to 12.7 billion dollars in 2012, more or less the same amount as the tax evaded, from 2008 to 2010, by the 265 biggest business companies in the country (6 Facts About Hunger That Demonstrate the Shameful Excesses of American Capitalism). And according to this same organization there are 26 big corporations who paid no taxes between 2008 and 2011, in spite of having realized profits of some 205 billion dollars over the period involved.

According to a report of the Congressional Budget Office (The Distribution of Major Tax Expenditures in the Individual Income Tax System), tax cuts made by the government cost some 900 billion dollars this year, and because of this the treasury will lose income to the tune of 12 billion dollars over the next ten years. If we add to these cuts the impact of subsidies for the rich and income lost through tax evasion to "tax havens" the annual loss in income amounts to some two billion dollars.

Another study by the Deloitte Center for Financial Services estimates that the net wealth of families with incomes over one million dollars amounts to 38.6 billion dollars in 2011. This means that a mere 2% tax would be sufficient to finance the whole deficit foreseen for 2013 and that with this alone it would be possible to levy more than half of the amount paid every year by all Americans in individual taxes.

The fact is not that the United States indulges in excess public spending, but that they have cut taxes to benefit the rich. While taxes on business represented 6 per cent of the GDP of the United States in the 1950s, today they hardly reach 2 per cent. At that time, for every dollar paid by workers in the US, businesses paid three, but now they pay barely 22 cents (Five Tax Fallacies Invented by the 1%). And while business income has increased fourfold in the past twenty years, their taxes have been reduced by half (In 20 Years Corporate Profits Are Up 4X and Their Taxes Have Fallen by 50%).

What lies behind the "shutting down" of the U.S. government is that capitalism has reached a paroxysm. It is not that the rich do not want government, but rather tha they want government restricted to their own benefit. They maintain the armed forces and subsidies that they receive, along with multimillion support for banks and big business. They show no dislike of this public intervention nor do they want to stop it, but they do everything in their power to make others pay for these subsidies; in the past twenty years the proportion of taxes paid by working people has doubled.

The wealthy, who represent more or less 1% to 10% of the total population, want it all, as is shown by the fact that profits for corporations, since 2008, have increased twenty times more than wages (Corporate Profits Have Risen Almost 20 Times Faster Than Workers’ Incomes Since 2008) or that from 2009 to 2011, 88% of income growth in the United States has gone to benefit business and only 1% to workers' incomes.

Capitalism today has reached its limits.

Nothing that does not benefit those at the top has any importance. The "shutdown" of the U.S. government, for example, means that 96% of the staff of the Environmental Protection Agency, 69% of the Department of Energy and 97% of NASA are not going to work, and hence these programmes are paralyzed. Even the workers who repair highways and bridges after floods and other disasters may cease working, and any public supervision of the extraction of oil, gas or minerals has practically ceased (What the Shutdown Means For Energy and Environmental Programs).

It doesn't matter if society is destroyed, if the environment is destroyed, or if institutions are fatally weakened. All that matters is concentrating wealth and political power, media and military power in the hands of a few, which has always been the case but is now much more exaggerated, since the capitalism of our time has been able to overcome any resistance to its becoming a gigantic apparatus to generate consensus and submission, as well as destruction and annihilation. It is not by chance that the same people who defend the closure of colleges, hospitals, public museums and national parks are those who give unlimited funding to genocidal wars, brutal attacks on human rights, torture, generalized espionage and the dismantling of democracies. (Translated for Alainet by Jordan Bishop)

- Juan Torres López is a Spanish economist.

https://www.alainet.org/en/articulo/79923?language=en