For a Moratorium on the Debt

April 17, 2011

The Workers Party has called for a moratorium on interest payments on the federal debt. Such a moratorium would immediately free up hundreds of billions of dollars which the government must use to guarantee investments in Medicare, Medicaid, education, welfare and other social programs so urgently needed by the masses of American people. Such a moratorium is an important step in resolving the "deficit crisis" and changing the direction of the economy in favor of the people.

To see more clearly what is at stake, let us again examine the origin and character of the on-going debt and deficit crisis.

To begin with the government has gone into debt precisely because it allowed the big corporations to plunder the public treasury. During the last 15 years, the federal government's total debt has grown by some $8 trillion. Yet during these 15 years, the government has spent $7.7 trillion on the military alone (not counting billions more spent on nuclear weapons, funding for NASA, the billions spent for the Department of Homeland Security and billions spent in "supplemental funds" for the wars in Iraq and Afghanistan.) Trillions more in direct hand-outs as well as tax loopholes have also gone into the coffers of big business. Score one for the capitalist class.

Round two. Having allowed the corporations to stuff themselves at the public trough and put the government in debt, the politicians turned around and financed this debt by borrowing money from the big banks and Wall Street investment firms. But where do the funds which comprise these loans come from? These billions of dollars loaned by the bankers to the government are not part of the personal wealth of the bankers but rather a portion of the social capital of the whole country, which in the form of individual and business savings, had been concentrated and accumulated in the banks. Yet, in the hands of the bankers these billions function as private capital – as a means through which the bankers enrich themselves. Thus, while the monies loaned to the government by the bankers were in fact public resources, the interest payments received by the banks are purely profits which accrue to the individual bankers. Score number two for the capitalist class.

Over the last 15 years, the government's total debt as well as its annual interest payment on this debt have both continued to soar – each feeding the other in a vicious cycle. Every year the government pays some $300 billion in interest to the big bankers. Score number three for the capitalists.

As the debt and deficit crisis deepened, the bankers, to insure the security of their loans, issued the battle cry to "balance the budget" by slashing social spending. And the Democratic and Republican party politicians – loyal soldiers for the bankers – have marched to this drum beat, drastically cutting Medicare, Medicaid, education and other vital social investments. While the politicians are trampling the rights of the people underfoot, they have declared, over and over again, that the government must uphold its "creditworthiness" by meeting its "obligations and commitments" to the bankers. Score number four for the capitalists.

In sum, the government has helped to create and solidify the position of the Wall Street money-lenders as a parasitic class of coupon-clippers – usurers – who have a legal title to receive every year a hefty portion of the wealth produced by our country and its people. The solemn "obligation and commitment" of the politicians is to ensure that these parasites – literally in the manner of feudal lords – receive their annual tithe out of the public treasury.

It is this class of parasites and the government's "commitment and obligation" to it which are sucking the lifeblood out of the working class and stifling the progress and development of our country. Our country does not lack the resources and the government does not lack the funds to guarantee the economic rights and well-being of the people. By cutting the parasitic money-lenders off the body of society, we can begin to reinvigorate our economy and direct it in service of the people. As a first step, by declaring a moratorium on interest payments to the Wall Street bankers, we put hundreds of billions of dollars at the disposal of society as a whole and use these resources to make the social investments needed to guarantee the rights of the people.