San José, CA – Today, Oct. 15, right-wing Republicans in the House of Representatives stopped the House Republican leadership from trying to pass a compromise measure to re-open the federal government and raise its debt ceiling. This marks another step towards the first U.S. debt crisis in history.

On Oct. 17, the federal government will not be able to borrow more money to pay its bills. The federal government will only be able to pay out what it collects in taxes, plus about $30 billion in cash that it has on hand. In the two weeks after that, the federal government will run short of money to pay all its bills, with the most likely date being Nov. 1, when $55 billion in Social Security benefits, Medicare payments, and military pay, benefits and retirement benefits are due.

From now through mid-November, the federal government will have to postpone payment on about $100 billion in payments if the debt ceiling is not raised. This comes to almost 8% of Gross Domestic Product (GDP, the standard measure of the size of the economy based on production of goods and services) on an annual basis, enough to throw the economy in a recession even worse than the one following the financial crisis in 2008.

Background to the crisis

The looming debt crisis has several roots. The first are the budget deficits of the federal government, where it spends more than it collects in taxes, so it has to borrow the difference by selling bonds. The federal government budget deficit ballooned to about $1.4 trillion (or $1400 billion), equal to 10% of GDP, in 2009 because the deep recession lowered tax revenues and the federal government increased spending to bail out Wall Street and stimulate the economy. Since then, a combination of higher tax revenues, spending cuts and economic growth have reduced the deficit to almost $600 billion, or about 4% of GDP in 2012, a decline of 60% in relation to the size of the economy.

The total amount of bonds that the U.S. government sells to pay for the budget deficit is the public debt, which is now $16.75 trillion ($16,750 billion). The federal government has a self-imposed limit on the public debt of $16.7 trillion, which means that the government can no longer borrow more money. The reported debt is slightly higher than the limit because the federal government has been shifting money around to avoid running out of cash for the last five months.

While there have been disputes over the debt ceiling in the past, they have been largely partisan affairs that did not come close to forcing the government to actually delay payment. But the recent rise of Tea Party Republicans means that the Republicans, especially in the House of Representatives, are controlled by right wingers who are more than willing to shut down the government and even force the government not to pay its bills in order to achieve their goal of ending Obama’s health care reform known as Obamacare.

What drives the Tea Party

Many Republican members of congress were denying the possibility of a partial shutdown of the federal government right up to the point that the government shut down. Their behavior is similar to their stance on climate change – just deny that it is happening so one doesn’t have to do anything.

Digging a little deeper, one sees that the government agencies that were most affected by the shutdown, such as the Department of Education, Housing and Urban Development (HUD), the Environmental Protection Agency (EPA) and the Department of Labor, are the programs most hated by the right wing.

There is also an extreme free-market logic among Tea Party Republicans that the government is bad for business and the economy and that a shutdown of the government will be good for business.

What is likely to happen

The world isn’t going to end on Oct. 17 if the debt ceiling is not raised. But the economic effects are already being felt, as the uncertainty of repayment of bonds after that date is causing the prices of bonds coming due soon to fall, which leads to higher interest rates. The interest rate on the shortest term U.S. bonds (called bills), which come due in 30 days, has now tripled and is higher than the interest rates on 60-day bills, which come due later.

While Democrats and the Obama administration are warning of the danger of default, which is what happens when the federal government does not repay its bonds or interest payment, it is hard to see how the government won’t give Wall Street what it wants. But there is chance that some bank or financial institution will find itself in a squeeze if the federal government doesn’t pay on time, triggering another financial crisis.

What is more likely is that the sudden drop in federal government spending will trigger a new recession. This could quickly feed upon itself in what economists call the ‘multiplier effect,’ where the individuals, businesses and institutions that aren’t being paid by the federal government then cut back their own purchases and payments, putting the economy into a downward spiral.

What a debt crisis would mean

If the House Republicans do manage to block any agreement to reopen the government and raise the debt ceiling, the self-inflicted crisis will mark another step in the decline of the U.S. as a world power. Ever since World War II, the U.S. government has been both a protector of Wall Street and big business and the head of worldwide empire of pro-U.S. governments that protect U.S. financial and business interests, backed by the U.S. military.

From an economic point of view, the end in 1971 of the post-World War II system of fixed exchange rates centered on the U.S. dollar, called Bretton Woods, was an early sign of the decline of the U.S. relative to the rising nations of Europe and Japan. This was followed by the OPEC oil boycott in 1973, and then the U.S. military defeat in Vietnam in 1975, showing the rise of the Third World.

Today the withdrawal of U.S. troops from Iraq and coming U.S. withdrawal from Afghanistan shows that the U.S., despite using hundreds of thousands of troops and spending trillions of dollars, is no longer to set up stable, pro-U.S. governments that can defend U.S. business interests. With the looming debt crisis, more and more governments around the world are losing faith in the economic power of the U.S. and the safety of U.S. government bonds. Foreign governments and investors now own more than $5.5 trillion of U.S. government bonds, and any sell-off in the bond market triggered by a debt crisis would quickly spread a financial crisis around the world.

But even if a financial crisis is avoided, a deep recession in the U.S. will also spread around the world. Europe’s economy is still in a depression with the euro-zone crisis and many economies in the Third World are slowing down already. Another worldwide recession, following so closely on the 2008-2009 so-called Great Depression, could again shake the very foundations of the world capitalist economy.

#SanJoséCA #capitalistCrisis #recession #RepublicanAgenda #TeaParty #governmentShutdown #DebtCeiling

Behind the partial shutdown of the federal government was the leadership of the House Republicans, who followed the lead of their right-wing Tea Party congress people. They needed to pass a bill to continue funding the government, since no budget for the 2014 Fiscal Year, which began Oct. 1, had passed. Instead, the House Republicans insisted on using the threat of a government shutdown to get what they wanted, which was to derail the Affordable Care Act, commonly known as Obamacare, even though the Senate, the president and the Supreme Court were against them.

The House Republicans’ willingness to seemingly burn down their own house to rid it of what they saw as vermin (Obamacare), is not only extremism, but also comes from their right-wing view of the government. It was under the Reagan presidency in the 1980s that the term “Starving the beast” arose, as right-wingers targeted the federal government as a “beast” for its social-welfare functions, wanting to pare down the role of the government to basically prisons to protect property rights of the rich and the military to maintain the empire.

Looking at a list of how agencies are being hit by the partial government shutdown, it is clear that many of the programs that the right wing hates will be hardest hit. Among the departments with the highest percentage of furloughed workers are the Department of Education (95%), Housing and Urban Development or HUD (95%), the Environmental Protection Agency or EPA (90%), and the Department of Labor (80%).

On the other hand, the Department of Homeland Security, which includes the Immigration and Customs Enforcement or ICE, has only 15% furloughs, so one can expect the record deportations to continue. The Department of Justice, which includes the FBI, also has only a 15% furlough, so no let-up in spying and harassments of Muslim Americans, Arab Americans and anti-war and international solidarity activists is in sight.

While the House Republicans say that they are targeting Obamacare, by and large the rollout of the Affordable Care Act set for October 1 was unaffected. While there were long waits for web sites to load and phones to get answered, this was largely because nearly 3 million people flocked to the U.S. government web site www.healthcare.gov and more went to state web sites such as www.coverca.gov in California.

In contrast, Senate Democrats and the Obama administration value the role of the government, both to subsidize big corporations (as Obamacare does with big health insurance companies) and to maintain social peace through social welfare programs such as Social Security and Medicare. But they also support the military and policing functions of the government, as seen in the Obama administration’s attempt to unleash a military attack on Syria and the FBI coordination of local police efforts to smash the Occupy movements.

#SanJoséCA #TeaParty #governmentShutdown #Obamacare #AffordableCareAct

Fight Back News Service is circulating the call to march on the 2012 Republican National Convention. A massive protest that will coincide with the opening of the convention will take place August 27, 2012, in Tampa, Florida. Organizers of the protest have set up the web site: http://marchonthernc.com Demand Good Jobs, Healthcare, Affordable Education, Equality and Peace Say NO to the Republican Agenda Money for human needs, not for corporate greed

On August 27, 2012, while the Republican National Convention selects a candidate for president, we will be marching in the streets of Tampa, Florida demanding jobs, healthcare, education, equality and peace. We will let the entire world know, “We have had enough of the endless attacks on the rights of working people and our standard of living!” We will defend Medicare, Medicaid and Social Security. We will defend ourselves against union busting. We will defend our children's right to an affordable, quality education. We want money spent on human needs, not on wars overseas and corporate greed.

In Congress and in states across the country, the Republicans and their Tea Party allies have unleashed a war on the people of this country. While the Republicans bailed out Wall Street, many of us lost our homes. While they push tax cuts for the rich, they are destroying working families and our way of life by cutting programs that serve us. The Republicans are trying to break our unions and take away our right to bargain collectively. They are spearheading attacks on immigrants and promoting an agenda of racism and hatred.

For too long, too many politicians in both political parties have ignored our needs, while serving the interests of the rich and powerful. We need to take things into our own hands and make them understand the consequences of their actions. Monday, August 27, 2012, is the time to advance the cause of justice and make our voices heard. Tampa, Florida is the place for all of us to raise our demands. Whether you are working to defend reproductive rights, standing up against attacks on immigrants and racist discrimination, resisting attacks on working people, or saying no to government cutbacks, we can come together from across the country to let our voices be heard. From California, to Illinois, to New York, we can join our brothers and sisters in the South in mobilizing and building a united protest with a clear message, “No to the Republicans! We demand good jobs, healthcare, affordable education, equality and peace!”

On Monday, August 27, 2012, the attention of the entire world will be focused on Tampa, Florida. The Republican National Convention brings together some of the worst politicians that this country has to offer. We're calling on all those ready to fight back against the attacks launched by the Republican Party and their corporate masters to take to the streets and demand a better future for our families, our communities and our children.

#TampaFL #AntiwarMovement #Labor #RepublicanNationalConvention #TeaParty #RNC2012 #RepublicanNationalConvention2012

Minneapolis, MN – Around two hundred people marched from the OccupyMN People’s Plaza to nearby TCF Bank Tower, Oct. 11. Marchers chanted “The banks got bailed out, people got sold out!” and “ho ho hey hey, make the rich pay!” The march targeted TCF Bank because the locally-based bank tries to dominate Minnesota’s economy and politics with extreme pro-corporate policies.

As the protesters marched through downtown at rush hour, many passers-by honked and waved in support of the protest. When they arrived at TCF Tower, the protesters found the doors locked with security guards standing just inside even though the bank was supposed to still be open. After chanting loudly outside the locked doors, several speakers expressed outrage at TCF Bank’s ultra-conservative political agenda they try to impose on Minnesota.

Mick Kelly of the MN Coalition for a People’s Bailout said to the crowd, “TCF Bank is a Tea Party bank. That’s the truth.” He detailed some of TCF Bank CEO William Cooper’s history of anti-people and extreme pro-corporate actions, as well as other prominent people associated with TCF, such as former TCF executive vice president Peter Bell, who went on to head the Met Council and the U of M Board of Regents. At both of those institutions, Bell’s budget cutting and union-busting attempts provoked workers to go on strike.

Tood Dahlstrom of SEIU Local 26 spoke about the protest that Minnesotans for a Fair Economy led earlier in the day against Wells Fargo and US Bank, saying that TCF might have thought they’d gotten off the hook since they weren’t targeted earlier in the day, but this protest was bringing the anger to their doorstep too. Giving an example of TCF’s ultra-conservative politics, Sarah Martin of the Committee to Stop FBI Repression spoke about how TCF Bank froze the accounts of Chicago Palestinian activist Hatem Abudayyeh, even though he hasn’t been charged with any crime. Only after national public pressure did TCF give Abudayyeh his money back. Other speakers talked about how the banks are making record profits while most people are falling further and further behind in debt.

TCF Bank is a huge contributor to pro-corporate politicians and causes in Minnesota. In the 2010 elections, TCF Bank gave $250,000 to the State Fund for Economic Growth, LLC, which in turn gave the money to MN Forward to support far right wing pro-corporate politicians, and the Taxpayer’s League of Minnesota, which is dedicated to destroying any government program that benefits poor or working people.

The OccupyMN occupation has been going on since October 7 in the plaza in front of the Hennepin County Government Center, which the occupiers have renamed “People’s Plaza”. The occupation is part of a national movement of occupations inspired by Occupy Wall Street with a message of “people over profits.” The round-the-clock occupation is ongoing. Organizers are encouraging people to come out to People’s Plaza anytime, and there are rallies daily at 5:00 p.m.

#MinneapolisMN #MinnesotaCoalitionForAPeoplesBailout #HatemAbudayyeh #TeaParty #CommitteeToStopFBIRepression #OccupyWallStreet #OccupyMN #TCFBank

According to the Congressional Budget Office, the wars in Iraq and Afghanistan could cost more than $1.5 trillion over the next ten years. The Bush tax cuts for the rich will cost about $600 billion dollars over the same period of time. Ending the wars and restoring the taxes on the rich would save more than $2 trillion, and, including savings from lower interest payments, would save about $2.6 trillion, more than the recent debt limit deal.

Let’s be clear. The real issue is not the deficit, it is about keeping taxes low for the rich and continuing to fund our present and future wars, while cutting programs that serve poor and working people. Social Security and Medicare did not cause the federal debt. In fact ever since the FICA payroll tax that pays for Social Security and Medicare was raised in the 1980s, these two programs have run surpluses and have helped to pay for the wars and tax cuts for the rich.

Half of all workers have no private pension plans, so Social Security is their only guarantee of income security when they retire. For more than a quarter of seniors who are lower-income, Social Security provides over 90% of their retirement income. About 40% of seniors have no private health insurance, and would suffer the most from any cuts in the Medicare.

Unfortunately, the fact is that the vast majority of politicians in Washington D.C. are more beholden to Wall Street and/or the Tea Party than they are to the interests of poor and working people and seniors. What is needed to be build a mass movement for economic justice that can unite workers, both union and non-union, and oppressed nationality communities, especially African Americans, Chicanos, and Latinos, who have the least income and wealth are who are hit hardest by cuts in government services. Students and youth and seniors are especially vulnerable to these cuts. We need to demand that the politicians bring our troops home now, end the Bush tax cuts for the rich, and protect Social Security, Medicare, and other government programs.

End the Wars!

Tax the Rich!

No cuts to Social Security, Medicare, and other programs for poor and working people!

#SanJoséCA #SocialSecurity #TeaParty #Medicare

Workers and students began the protest in front of The Landing by waving signs and chanting “When working families are under attack, what do we do? Stand up! Fight back!” Two right-wing Tea Party members heckled the protestors, but the vast majority of cars that passed by waived, honked and cheered the protestor’s pro-labor, pro-education message.

When Rick Scott was scheduled to speak, the protesters marched on The Landing holding signs that read, “Fight Back Florida!” and “Stop the war on working families!” The Landing’s corporate developers tried unsuccessfully to shut down the protest, but a union worker from the National Association of Letter Carriers pointed out that the protest was on public property.

The Tea Party’s event began with a racist portrayal of President Barack Obama in a skit. Protesters booed the bigoted event and chanted, “Rick Scott, stop the hate! Not our city! Not our state!” Tea Party thugs tried to block protesters from waving signs. One Tea Party thug shoved Dustin Ponder, a Fight Back Florida organizer, to try and provoke a fight. Police restrained, but did not arrest the Tea Party member.

When Rick Scott arrived, protesters confronted him with thunderous chants of “Tax the rich!” and “Hey-hey! Ho-ho! Rick Scott has got to go!” The protesters were chanting so loud that Rick Scott left after just five minutes. As he quickly retreated, workers and students yelled, “You’re a crook!”

After the rally, Dave Schneider, a Fight Back Florida organizer, briefly spoke to the protesters. “These Tea Party thugs can try to silence our voices, but they can’t stop working people and students when we stand up and fight back!”

#JacksonvilleFL #TeaParty #FightBackFlorida #GovernorRickScott

When the counter-protesters arrived, the Tea Party reactionaries quickly turned nasty, making vicious and racist remarks. “Speak English!” several Tea Party reactionaries shouted at protester Jose Soto, a PhD candidate at the University of Florida. Soto commented on why he was there: “Private insurance corporations have an obvious conflict of interest between providing health care and maximizing profits. The problem comes from the inherent selective bias built into these companies, where it's not lucrative for them to provide health care for people who really need it, but to instead pick and choose those who are healthy and will pay for it and not use it.”

However, the pro-health care activists stood their ground, to put out another message, chanting, “Funding for health care, not warfare!” Many said, “We are here to demand health care for homeless veterans in honor of Veterans Day.” It was clear at the protest who stood for the interests of most Americans and who stood for the interest of the few rich health care profiteers.

#DaytonaFL #StudentMovement #OppressedNationalities #StudentsForADemocraticSociety #Healthcare #TeaParty

St. Paul, MN – On November 14, immigrant rights activists in the Twin Cities confronted a “tea party” rally of about 40 right wing anti-immigrant extremists at the Minnesota State Capitol. The anti-immigrant “tea party against amnesty” was in opposition to immigration reform legislation that may be introduced soon in the U.S. Congress, which might provide legalization for some undocumented immigrants. The tea party organizers oppose any legalization and instead support repressive mass deportations of the estimated 12 million undocumented immigrants in the country. The anti-immigrant extremists gathered to hear speakers and held signs with messages such as “If You Are Illegal Go Home” and “Pack Their Sack and Send Them Back”.

However their message did not go unopposed. They were confronted by about 30 immigrant rights activists standing up for legalization and full equality for all regardless of immigration status. The immigrant rights presence was initiated by the Minnesota Immigrant Rights Action Coalition (MIRAc). Immigrant rights activists chanted during the anti-immigrant speakers, and held banners that said “Stop Raids and Deportations” and “Immigration is Not a Crime”. The immigrant rights protesters clearly frazzled the anti-immigrant organizers throughout their event.

One immigrant rights activist going by the name of Robert Erickson even tricked the anti-immigrant rally organizers into letting him speak at their rally. He began his speech with what sounded like the usual hateful anti-immigrant message. But as he continued, it became clear he was not criticizing Latin American immigrants coming across the Mexican border. Instead he was condemning the European colonizers who came here starting 500 years ago and stole the land from Native Americans while committing genocide against them. At first the anti-immigrant crowd cheered for him until they slowly realized he was not giving their message. Then they fell into silent confusion, as immigrant rights protesters shouted their approval.

Video: “Robert Erickson” Tricks Anti-Immigrant Rally Organizers

The following video clip shows immigrant rights activist “Robert Erickson”, who tricked the anti-immigrant tea party organizers into letting him speak at their November 14 rally. His speech at first sounds like an anti-immigrant speech but then changes the message part way through. This left the anti-immigrant forces confused and speechless, while immigrant rights protesters shouted their approval.

#StPaulMN #antiimmigrantAttacks #MIRAc #MinnesotaImmigrantRightsActionCoalition #TeaParty #RobertErickson