In the USA, we've been hearing about "the deficit" for decades. Any nation has to figure out its cash flow to finance all of its domestic and international activities. The not-yet United States came out of its war of separation from Great Britain with a mountain of debt. The amount has gone up and down, but never gone completely away.
For those of us in the lower tiers of the economy, the economics are clear: you need a definite amount of money to service a definite amount of debt. I don't mean people on public assistance or evading social safety nets. I mean the working and lower middle classes. As you go up from there, the lines become blurrier. The more money you have or can make people think you have, the less you have to make every equation balance all the time with solid cash or collateral. Once you reach the status of a billionaire or a nation, it gets very mumbly.
Large financial entities with whole departments of lawyers and accountants can play off perceived assets against negotiable debts for decades or, in the case of nations, centuries. Somewhere in the US deficit is probably a line item for cannonballs bought with French funds in 1779. Allied nations have been helping each other out in various conflicts throughout history, with the ledgers balanced by returned favors as well as money. As with any friend to whom you owe money, it only becomes a problem if you have friction. These times come and go. The international community bumps along.
Bankruptcy ceased to be the kind of shame that would drive a tycoon to suicide by the mid 20th Century. Now it's just another device in the corporate toolkit to avoid paying back the full amount that you owe. Sometimes it means liquidation and the corporate equivalent of death. Other times it just means a restart with the pesky loans and losses recalculated.
For individuals, the process is a bit more dire. Individuals can declare bankruptcy, as can small businesses, but the consequences weigh on them more heavily and for longer than would be the case for a massive corporation whose collapse sends shock waves through the global economy and plunges thousands of people into unemployment, poverty, and fear. We must be stern with our erring children, and force them to learn from their mistakes. Keep the little people in line.
Starting in 1980, Republicans instituted policies that favored reducing government income. This has had the predictable effect of raising government debt. The other half of the Republican equation was their drive to make government smaller, releasing the controls on businesses, especially large and powerful corporations, while slashing and burning the social safety nets that they asserted were just making hammocks for born losers, and tangling the feet of an agile economy just waiting to sprint to nationwide wealth. In order to get into office at all during these dark times, the Democratic Party has been forced to play along. The players have been more or less reluctant depending on how susceptible they are to the lure of investment income.
Step one was to vilify government. Step two was to elect officials who would make government ineffective. The GOP called for unity above all else. There were plenty of disaffected constituencies that could be pulled together with promises to address their particular grievances. Most people have a jaundiced view of the government because, right or left, we've all been let down in one way or another. Find the right framing and you can create party loyalists for life.
At first, the proponents of trickle-down economics may actually have believed their silly theory that increased economic activity would follow when taxes on the top brackets got smaller, and that this would generate the needed revenue. If they really did think that, it wasn't for long. The real long-term goal was to consolidate private wealth and make it the dominant force in government policy. The rich wanted to get richer. It's only natural. Give them the freedom due to all people created equal. Let them use that freedom to become emperors. Equality under the law is a fairy tale you use to get poor people to fight your wars for you.
Modern media made it increasingly difficult to operate the government to the advantage of concentrated wealth without any scrutiny at all. Occasionally, idealistic principles won a round. Overall, however, the trend has been toward feeding money upward and hardship downward, flogging the tired myth of upward mobility to a more and more jaded audience.
Part of the audience has been dragging student debt for years, because a college education was supposed to be a necessary rung on that upward climb, as well as just a nice thing to have for your own intellectual expansion. The encumbrance became a drag on the economy as those workers were less and less able to participate fully in the consumerist gorge that sustains the modern world. While the gorge is itself a major threat to our survival as a species, it remains necessary to the individuals of each generation as they try to extract sustenance from the world they're thrust into. So the current administration in the US decided to extend to the student debt bloc as a whole -- or at least in large part -- the same courtesy extended to major corporations and allied nations, of just writing it off. Let the liberated wallets frolic among the retailers, the real estate market, and the service sector.
The opposition refused to see the student debt population as a large blockage in the national cash flow, and instead continued to see them as little people who needed to live with their mistake of seeking higher education that didn't pay off adequately. Hey, we've all made bad investments! Suck it up! They haven't noticed yet that student debt forgiveness is the perfect metaphor for their plan to shrink the government and drown it in a bathtub. I will explain:
Cutting taxes was supposed to make voters automatically favor politicians who cut government expenses. They've tried, but certain expenses are very hard to reduce, and other categories attract the support of lobbyists to keep the money flowing. Penurious voters keep sending angry representatives to Congress, hoping for the glorious day when the IRS finally falls like a statue of Saddam Hussein, and everyone gets to take home ever dollar they earn. But it keeps not happening! Meanwhile, economists look over their glasses at us and tell us that this deficit thing is going to keep two, three, twenty, a hundred generations enslaved just to the interest payments!! We have reached the point now where a functional percentage of voters might be convinced that the best way out of the mess is just to collapse the government and walk away from the wreckage. It's a young adult fantasy novel come to life. John Galt and his rich buddies hang out in their luxurious compounds waiting to stride out over their newly conquered world after convincing the majority of underlings that democratic government is just too complicated and difficult for them. Y'all couldn't handle the expenses. And yet those expenses miraculously disappear once the nanny state is replaced by the boss state.
I'm not sure where the super rich think their wealth will come from once they have all the money. Huge dollar figures will become even more meaningless than they are already. The key becomes an economy based on job satisfaction rather than money. Tyrants need jobs done. Individuals need intellectual and emotional gratification. And because gratification is itself an emotion, it's all about emotion. Feelings, nothing more than feelings. Put sadistic bastards in charge of security. You don't have to pay them anything. Just make sure that they have the equipment they want, and whatever food, shelter, and company they require to keep them happily on task. Find workaholic drudges for your necessary tasks. Find sycophantic suckups to be your property caretakers and household retainers. There are endless ways to create a barter economy from tendencies already easy to see among people now handled through the cumbersome intermediary of pay rates. Still, the super rich will have to measure themselves against each other somehow. Oh well, I guess that's their problem to solve. We too dumb down here.
