THE BLOG

Debate This: False Deficit Narrative Serves Wealth Redistribution Upward

10/16/2012 05:44 pm ET | Updated Dec 16, 2012

Code words like "shared sacrifice" used by Gov. Chris Christie and "balanced" deficit reduction invoked in President Obama's campaign ads serve as cover for Washington's false deficit narrative that ultimately supports large tax breaks for the wealthy by cutting programs serving the working/poor, including Medicare, Medicaid, and Social Security.

The central unspoken issue of the 2012 campaign remains the 30-year wealth transfer upward, a primary source of widening disparity of wealth that compromises economic recovery.

Economics professor Jack Rasmus describes the Washington consensus -- that $4 trillion of tax cuts for the rich over the previous decade, be paid for over the next decade by $4 trillion in budget cuts disproportionately taken from programs invested in by the working/poor, including Medicare, Medicaid and Social Security.

While Republicans have made the false deficit narrative an excuse to shift evermore wealth upward, Democratic leadership have failed to effectively counter this narrative, and instead have offered to move further to the right -- in 2011 as part of a "grand bargain," President Obama made several offers to cut Medicare and Social Security, an intent that he expressed prior to his inauguration. Among Washington Democrats who have offered to compromise traditional Medicare, Sen. Ron Wyden joined Rep. Paul Ryan to promote a plan diluting the efficiencies of Medicare and subjecting it to adverse selection, by offering parallel privatized health coverage to seniors.

Rep. Chris Van Hollen, top Democrat on the House Budget Committee recently predicted that the Simpson-Bowles proposal will become the "framework" for congressional negotiations post-election to avoid the January "fiscal cliff." Among cuts to programs for working people, Simpson-Bowles promotes privatized or "voucherized" managed care plans for Medicare recipients, shifting greater costs of co-pays, deductibles and premiums to seniors.

Dr. Robert A. Johnson is just one economist who has named Medicare-for-All the best cure for inflationary health costs, and means to deficit reduction. Over 20 federal and state studies demonstrate average $400 billion in annual savings with Medicare-for-All. Traditional Medicare has 3 percent overhead costs, contrasted with 30 percentoverhead for private insurances. Yet, Washington does not shrink from funneling hundreds of billions of dollars in taxpayer subsidies to health insurance and pharmaceutical industries. Nor do lawmakers balk at the legislative prohibition against Medicare negotiating bulk drug rates, as the VA does.

An indicator of their fealty to corporate money, mainstream media and both political parties dance around a primary means to address both inflationary health costs and deficits: Improved Medicare-for-All as Major Deficit Reduction.