The Crisis of the Tax and Transfer State
If budgets are moral documents, this one is a covenant with death.
“A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.” - Martin Luther King, Jr.
In 1917, Austrian sociologist Rudolf Goldscheid stated that “the budget is the skeleton of the state stripped of all misleading ideologies.” The next year, that phrase was snatched up and popularized by fellow Austrian Joseph Schumpeter in his pamphlet “The Crisis of the Tax State.”
Schumpeter added that “the spirit of a people, its cultural level, its social structure, the deeds its policy may prepare—all this and more is written in its fiscal history, stripped of all phrases.”
And “he who knows how to listen to its message here discerns the thunder of world history more clearly than anywhere else.”
At the time Schumpeter was writing, the First World War (or as he called it, “the war”) had scarcely ended and Austria was obviously mid socio-fiscal-political crisis. “The rich and powerful Empire of Austria-Hungary had in 1919 been broken in war and dismembered by peace as no other country has been in recent history,” wrote Arthur Salter in an article for Foreign Affairs a few years later. He added: “for three years Austria became the beggar of Europe.”
Thankfully the United States is no postwar Austria. Interest rates on U.S. Treasuries continue to steadily rise (see below) but we aren’t necessarily on the immediate precipice of economic disaster. Everyone seemingly still wants the dollar. And being downgraded by Moody’s is a bad sign but not the whole ball game.
Bafflingly, Congressional Republicans obviously recognize that fact. H.R. 1 is not a classic austerity budget: it cuts spending but Penn Wharton Budget Model estimates it’ll still increase the 10 year deficit by $3.5 trillion.1
And that deficit spending would all be used to finance massively regressive tax cuts, not investments in social or physical infrastructure. While working on an article for the Alabama Political Reporter last month, I spoke to three experts about the probable effects of the OBBBA as it stood at the time. Liz Hipple of the Georgetown Center on Poverty and Inequality called the proposed budget “a bill that takes from the many to give to the few and to the few that are already well off.”
Now, that is 100 percent true. The bill will take money out of the pockets of the poorest Americans while shoveling cash at the nation’s richest and wealthiest families.
But folks’ justifiable focus on how much the überwealthy will fill their pockets if the bill passes belies the real purpose of the budget. If the budget “is the skeleton of the state,” then Congressional Republicans are trying to remake America according to the way that Trump sees the world.
Just read what the vice president tweeted recently: “Everything else—the CBO score, the proper baseline, the minutiae of the Medicaid policy—is immaterial compared to the ICE money and immigration enforcement provisions.”
The budget would increase funding for ICE by dozens of billions of dollars, while setting aside even more money for new detention facilities and even more for a U.S./Mexico border wall. Here’s Dan Moynihan with some comparisons:
“The ICE detention budget is larger than the total budget for USAID used to be. The ICE detention budget increase is larger than cuts in education, or for SNAP in the BBB. It is larger than cuts to NIH, CDC and cancer research combined.”
Those are the priorities about to be enshrined in the federal budget.
As the skeleton of the state will soon reflect, in Trump’s America 17 million people losing their health insurance is immaterial when compared to the ability to keep people in “Alligator Alcatraz,” the new compound of cages in Florida that regime toadies boast will be “Hell on earth.” Over 50,000 unnecessary deaths every year according to public health researchers? Immaterial so long as the state can get ready to deport American citizens. The same goes for the children who will go hungry as a result of cuts to SNAP. Immaterial.
If you’ve paid any attention to the consequences of the White House’s evisceration of USAID, you would already know they don’t care if kids starve to death, or have to grow up without their parents.2 As Tom Fletcher of the UN Office for the Coordination of Humanitarian Affairs put it, the international aid community has been “forced into a triage of human survival.” And a recent study published in The Lancet projected there will be 14 million deaths as a result over the next five years. So clearly kids dying is alright according to D.C. Republicans.
After all, to quote Senator Ernst, “We all are going to die.” So the Republican budget is just gonna make sure a lot more people die a lot sooner. Big deal, who cares.
But as a document “stripped of all misleading ideologies,” the budget also reveals what really does matter to Republican lawmakers, not simply the inverse. Children’s lives may not be of concern, but Republicans will evidently still move mountains to cut taxes for the superrich and keep nonwhite people out of the country.3
What else is new.
I for one cannot help but remain pessimistic about the future of the American polity. But with the federal budget about to be, in the Biblical words of abolitionist William Lloyd Garrison, “a covenant with death, and an agreement with hell,” I must remain hopeful that things can improve. That one day we may be able to examine the federal budget and hear the glorious news that “the cross is bending, the midnight is passing, and joy cometh with the morning.”
The Financial Times has a solid explainer of what’s actually in the budget as passed by the Senate Tuesday morning.
This article about the loss of emergency rations for families suffering through a famine in Sudan is especially heartbreaking.
If you believe that Republican policy surrounding immigration right now is not the product of diseased, racist minds, just look at who is in power and what they’ve been doing. Open racists are welcomed with open arms into the admin (and Congressional offices) while Trump appointees use loopholes to rename military bases after traitorous scum who fought against U.S. troops in order to preserve human bondage.