The Massive U.S. Debt Is Making The Oligarchs Even Richer

The following is part of an excellent article by Thom Hartmann (at The Hartmann Report):

Prior to Reagan’s presidency, we’d been steadily paying down our 106-percent-of-GDP debt from World War II; by the time he came into office in 1981, Presidents Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter (and their Congresses) had paid it down to a mere 31% of GDP.

And while we were paying down that debt, we also built the interstate highway system, put into place free college and cheap mortgages for millions with the GI Bill, created Medicare and Medicaid, built thousands of new schools and hundreds of new hospitals, and sent men to the moon.

We were able to do all that because during that entire New Deal era, right up until Reagan took office, the top marginal income tax rate on morbidly rich money hoarders ran between 70 and 91 percent.

One could get rich, but it was nearly impossible to become an oligarch like today. . . .

Reagan and Bush Sr. took our national debt from under $1 trillion and jacked it all the way up to $4.4 trillion in a mere 12 years. If you add up the impact of Reagan’s, Bush’s, and Trump’s tax cuts for billionaires and corporations, and add in the $8 trillion from the wars in Afghanistan and Iraq that GW Bush lied us into, it pretty much equals our entire ~$40 trillion national debt today.

And now Trump wants to give the Pentagon another $1.5 trillion next year, an explosion of “defense” spending that will re-stimulate the economy and add to our debt, crushing families as it spikes interest and inflation. Not to mention the billions he’s demanding from Congress right now to cover the costs of his and Bibi’s stupid war against Iran.

And here’s where the story gets wild with a point that probably 95 out of 100 Americans don’t realize: that trillion-plus dollars we pay every year for interest on our national debt doesn’t just vanish or fly into outer space; most of it goes straight into the pockets and money bins of the morbidly rich.

What a scam!

Forty-five years of Reaganomics have converted what were once the tax bills for the morbidly rich into a source of extremely safe revenue for them, since they’re among the largest holders of US Treasuries. And we’re paying the bill to shovel all that interest money into their money bins.

Money that flowed from the rich into the Treasury between the 1930s and 1980s as taxes now flows from the Treasury into the pockets of the extremely rich every quarter as interest payments, and it’s paid for by working people with their paychecks.

 

We spend more making interest payments to rich people every year than we do on Defense or Medicare, and almost as much as we spend every year on Social Security; interest on the national debt is the second largest line-item in the entire national budget. . . .

When Republicans loudly and self-righteously proclaim that America can’t afford Medicare for All or tuition-free college, we all need to be clear about what they’re really saying. They’re telling us that they’ve already spent that money, on themselves and their rich buddies, and stuck you and me with the debt and the interest payments.

We can step into that information void created by our captured media and flaccid Democratic messaging. Tell everybody you know how this has screwed most of us, while making Musk, Ellison, Bezos, Zuckerberg, and their billionaire class richer than any pharaoh or king in world history. 

And demand that our candidates promise to raise taxes on the morbidly rich and corporations back up to reasonable levels while funding modern social programs like everybody else has.

After all, we paid down most of our national debt once before following the most expensive war in world history, and we did it while building the world’s first more-than-half-of-us middle class because we taxed great wealth at rates requiring the morbidly rich to contribute to society like the rest of us. It worked then and it will work now, if we can just squeeze the political and moral courage out of our elected representatives.