When John Steinbeck said “Socialism has never taken root in America because the poor view themselves not as an oppressed proletariat, but as temporarily embarrassed millionaires” he struck at one of our most deeply held cultural paradigms: the American Dream. Though made 65 years ago, this comment still holds true today, and is clearly visible in the heated debate going on in Washington over this so-called “fiscal cliff.” As the expiration of the Bush Tax Cuts and the end of the fiscal year draw near, Democrats and Republicans in Washington have once again hit a snag over whether or not our economy is best bolstered from the bottom up or the top down. Democrats have taken the position that the top priority should be investing in America through stimulus funds, while Republicans claim the deficit should be the focus. While this debate should be a cut and dry case of dirty politics, America's middle class is once again divided.
The Bush Tax cuts cost the federal government 1.6 trillion dollars. The theory was that giving the wealthiest Americans more money in their pockets would incentivize them invest in American jobs and businesses. This same logic was put to the test under President Ronald Reagan and the outcome was the same: the wealth gap exploded, the middle class was made to pick up the slack, and the money pooled at the top. There was no benefit to this policy: no jobs created, no wealth dispersion, and no economic boom. So what exactly is the big deal with allowing the expiration of the cuts for the top earners?
Democrats see a chance to not only reduce the deficit, but also to increase revenue to reinvest in infrastructure and social programs, but the Republicans see an opportunity to score political points. The 2012 election is now being hailed as a full on realignment by many political scientists, which is an election that signifies a shift in the general political awareness, relating to how people perceive issues of government. Following the New Deal the Democrats were the majority party, winning most presidential elections and congressional races until the 1960's when the pendulum began to swing the other way. The Republican realignment began during the Civil Rights movement and culminated under Reagan. From then until now we've in between shifts. The Reagan legacy is slowly dying thanks to the failure of laissez-faire and of course, tax cuts for the rich, and new ways of thinking are prevailing. The Democrats campaigned on a platform of leveling the playing field and swept the election, winning the majority of votes cast in the House, the Senate, and the Presidential races. The House remained Republican due to heavy gerrymandering.
The GOP is aware of this shift. Conservative pundit Bill O'Reilly said the reason Obama was reelected was due to the fact that the “white establishment is now the minority.” Republicans were faced with 2 choices: accept the realignment and work with the Democrats to build a better future, or be wholly oppositional, hopefully drive America deep enough into the ground that the Democrats get blamed, and turn the country back to the GOP. As much as I would like to say they went with the nobler intention, the latter prevailed. Using the guise of concern over the debt, Republicans in the House have staked out a firm opposition to President Obama. Ultimately this scheme will fail as it did during the election.
If the House does not concede to letting the Bush Tax Cuts expire, and they force the country over the fiscal cliff, every working American's paycheck and pocketbook will suffer. Taxes will increase for everyone, and automatic cuts will occur to both social and military programs. The safety net millions of Americans rely on would shrink. Social Security, Medicare, and Medicaid would all be on the table. The Democrats have offered a compromise to reduce the deficit but in doing so, keep the tax cuts for the middle class while raising 1.6 trillion in higher tax revenue and leaving the safety net alone. The GOP on the other hand, offering just 800 billion n tax revenue and proposing a 600 billion dollar cut to Medicare, has drawn a line in the sand: its tax cuts for the rich or tax cuts for none, and cuts to social programs or no compromise. What this means essentially is that working families are being held hostage for political gain.
Of course this entire situation is a canard. Our deficit isn't even the issue its been made out to be. Interest rates are low, inflation is virtually nonexistent, holding at .2 percent, and investor confidence is so high that people are paying the government to keep their money in the United States. The return on every dollar borrowed is greater than the amount it costs to borrow it. What's more, modern economists agree that when in times of recession spending on credit is not only acceptable but necessary to boost the economy and create jobs. Driving America off the fiscal cliff would deny President Obama more stimulus money to do just that. The GOP is not really concerned with working class/middle class Americans.
So why then are Americans not completely up in arms over the debate about the fiscal cliff? Why are America's working and middle classes divided along party lines when we stand to lose programs we all benefit from? The answer get's back to John Steinbeck's quote. We Americans have this idea that one day we'll be rich, and when we get there we want to pay low taxes. We also like to feel responsible for ourselves—The idea of sacrifice for the greater good does not jive with our frontier mentality. We want to believe that everyone is a victim of their own limitations rather than potentially a victim of their circumstances. The GOP likes to encourage this kind of thinking as it allows them to cut social programs, disenfranchise labor, and give handouts to big business and the rich. In the recent election conservatives referred to the “haves” and the “soon-to-haves.” As ridiculous as this rhetoric is, and as impossible as it is for every American to be rich, it does tickle that feeling of endless possibility every American holds in their heart. As Steinbeck was pointing out so long ago: we need to reevaluate the American Dream.