Thursday, August 04, 2011

The Debt Crisis and Jewish Communities

As I write this, the stock market has just dropped like a rock, a 500+ plunge, which is the 9th decline in the last 10 days of trading. It has been only a few days since Congress passed the debt ceiling extension. Mitch McConnell et al promised that if this extension was passed without raising taxes and with sufficient spending cuts, that everything would by hunky-dory and our problems would be on their way to being solved. Unfortunately, this fairy tale isn't fooling anybody.

Here's my analogy of the current US economy: Mrs. Silver-Spoon and Mr. Wall-Street used to pay a big chunk of the household expenses in their home – when the marginal tax rate approached 90% for very high income groups, this couple gladly stepped up to the plate and supported their household, and still had plenty of luxuries in their lives. But they are no longer willing.

Also in the household are the couple's aged parents and their own children, Miss Unwed-mother, Mr. Un-or-under-employed, Miss Has-cancer, Mr. Underwater-mortgage, and Miss Still-marginally-middle-class. They have some undocumented household servants, too, who shall remain nameless. But since the 80s in particular, Mrs. Silver-Spoon and Mr. Wall-Street have paid less and less of the household expenses, even putting the family into more debt and quietly dipping into grandma and grandpa's funds, mostly by hiring Uncle Warmonger to send his thugs to intimidate or “take care of” little problems with their overseas “business partners,” or to be a token show for “allies.” They made a pile of money doing this, both for themselves and Uncle Warmonger, but the grandparents and kids have benefited in no real way. In fact, thanks to Dad, the kids now get to compete for jobs with people willing to work for fifty cents an hour.

Now, Mrs. Silver-Spoon or Mr. Wall-Street could easily retire the household debt and give the family a new clean slate and a balanced budget, but they choose not to. Some would argue they have no obligation to do so. Either way, they have announced clearly that they will contribute nothing further to the mess they made. Instead, they expect their kids to take up the slack. Of course, even all five of the kids combined cannot make enough money to cover the household expenses and support grandma and grandpa, much less get out of debt. Mrs. Silver-Spoon and Mr. Wall-Street don't care. In fact, they have hired new legislators to gut all the programs that would help the grandparents and the kids.

Needless to say, this household is careening towards bankruptcy, and their accountants know it – hence the lack of confidence in US currency/treasuries and the declining stock market.

What does this mean for us, in this particular Jewish community? In the past, Jewish communities had organizations that hired their own community doctors, took care of stipends for their own elderly and unemployed, formed co-ops, utilized interest-free loan societies, provided scholarships for young people, etc. But since the “New Deal” we have stopped taking care of our own and expected government to do it. And worse, here in the 21st century, even in the face of declining government social services, JFS offices all over the country rely on other charities, especially Christian ones, to take care of our own. My community is guilty, too.

I have blogged several times in the past that the IMF or World Bank would impose austerity measures on the US eventually. Even if such are self-imposed from within, it is unlikely that the “reformers” intend to cut off Uncle Warmonger et al or protect basic human rights to life (healthcare), etc. – their priorities are just not our priorities. We need to get real about this. Complicate all that with the ongoing issues of the continuing rising costs of goods and of gasoline due to peak oil, and you have a recipe for disaster. G-d forbid we get hyperinflation. Even without that, households will increasingly sink, because they just can't swim in these waters.

“Reformers” intend for already overburdened charities to do what govt. is no longer willing or able to do. But it is not realistic to expect other charities to continue to support people who will not agree with their religious or political philosophies. As the Teapartiers and Republicans gut the govt. social safety net, the need will be overwhelming and charities will all have to pick and choose whom they will serve.

Will they still serve Jews? When push comes to shove (and it will) I fear the answer is likely to be “no.” Of course, this won't happen right away, but it will snowball quickly when it starts. They will be too busy taking care of their own.

That brings us to the next question: Is our community willing to pick up the slack and take care of our own? We have some small bit of time to plan for the future. Is our community willing to put the funds and programs in place to take care of these problems as they careen toward us? What should the Federation's role be? This is the question we have to ask ourselves now. It's a discussion we urgently need to have and we aren't having it.

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