Obama's economic warfare against Republicans

By Li Hong (People's Daily Online)

11:15, September 21, 2011

U.S. President Barack Obama's recent proposal to raise taxes on wealthy families and super-rich corporations to help make up for the shortage of fiscal stimulus, crucially needed by a sputtering economy there, has hit the stone as Congressional Republicans categorically shut down the door. 

The chance of writing Obama's prescriptions into law and rushing government spending with a replenished government coffers to avoid starving U.S. economy, is slim. The only way out for Obama administration is to borrow more from creditors home and abroad, piling on an already huge budget deficit and escalating the debt risks. 

The opponents of the president branded the White House initiative as waging “class warfare”, pitching the increasingly impoverished Americans against the privileged. It is sad to see the U.S. faces such a colossal predicament, and the haves still refuse to give a hand to the have-nots, demanding a heavy reduction in Medicare, Medicaid and Social Security programs that the poor rely on most. 

On the opposite side of the Pacific, Chinese people used to be summoned by their leaders prior to 1978 to engage in endless “class warfare”. Political restlessness and bruising struggles among different groups of people whipped up acrimony among them, destroyed production and led China to the brink of outright collapse. 

It is cunning for the Republicans to dangle the reminder of communism before cameras to scare ordinary Americans with possible protracted ideological skirmish and widespread street violence on their land. However, hasn't wealth chasm and income inequality in the U.S. reached a glaringly unfair point that puts its trumpeted democracy and social sustainability at peril?

Ultimately, when the poor cannot seek ways to make ends meet, they will have to take the law in their own hands. No one is willing to see their loved ones to starve. 

Therefore, asking higher income-earners – those singles making 200,000 dollars and families making 250,000 dollars a year – to pay more for the sake of U.S. deficit reduction so as to preserve its economy keeping running, is hardly “class warfare”. Former Republican President George W. Bush's giving the wealthy deep tax breaks – in place now even the federal deficit has hit 14 trillion dollars – is, in the world's eyes, a very selfish move favoring the haves. 

For the sake of America's survival, and also, aiding the global economic recovery from the 2008-09 financial crisis and recession, the tax holidays should be repealed. (The Federal Reserve's extraordinarily loose monetary policy and “quantitative easing” by printing dollars to purchase debts, has not and won't save the U.S. economy.)

The wealthy American individuals and families have prospered disproportionately over the past decade, thanks in no small part to federal regulatory and fiscal policies that helped them more than any other segment of society. As a result, they're in a better position than any other group to help close the budget gap.

So, it's more than fair for the rich to be paying more as U.S. confronts its long-term fiscal problems. Obama administration has underestimated the ferocity of Republican opposition before, in healthcare overhaul and the debt ceiling debate. Now, it must do more to persuade the whole nation to act. 

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