DEAR editor,

I found the article by Shawn Mesaros in the September 10 edition of Shanghai Daily ("US debt crisis makes Europe look like picnic") disappointing.

Since the fact that the US has a sizable debt is hardly new information, it is unusual that the writer provides no insight into how this debt was amassed in a short time. Nor does he provide any advice on how this debt could be reduced over time. His basic position appears to be that any government spending to reduce the impact of economic hardships upon the poor and struggling middle class is illegitimate.

For instance, near the beginning of his article he says, "The government borrows heavily in recession, saying that this activity is good for the country, that it saves jobs, etc. And yet after the recession, the debt is not repaid and somehow this 'productive pursuit' was good for America." Later in his piece he states, "Politicians would say that 'recessionary spending enhances the effectiveness of government' to which I would counter that 'recessionary spending effectively pillages the sacred altar of individual sovereignty which all Americans view as a birthright, as Americans.'"

This is but another serving of the kind of meaningless cant heard so frequently in the US these days, words serving to generate more heat than light.

To responsibly resolve America's imbalanced budget in an informed, accountable, and adult way, we need a fuller context of how this fairly recent matter of deficit spending came about, and discussion of which policy choices might be most useful.

Since the US had succumbed to deficit spending long before the lingering Great Recession which began in 2008, it should be clear that the root cause of the US' current level of debt - indeed, of the very recession itself - can absolutely not be attributed to so-called "recessionary spending."

Since this is the case, what really caused this explosion of debt? Key policy decisions made in the early years of this century's first decade ensured that America would be deep in red ink for years to come:

1. It was the unwise (and factually unsupportable) invasion of Iraq by the US in early 2003 that began the debacle. The decision not to raise taxes to fund this war guaranteed that future budgets would quickly sink into red ink;

2. The subsequent cut in taxes, most of which favored the already obscenely rich, compounded the situation; and, finally,

3.The decision to start a costly expansion of the Medicare program, laudably intended to help the elderly pay for prescription drugs but without identifying new revenue streams to support it, was the next to the last blow.

All of this occurred before Mr Obama was elected president.

Final nail

The final nail in the fiscal coffin came in 2008 with the beginning of the Great Recession. As its tremendous scale and potential impacts became known, it was President Bush who first used federal dollars to "bail out" the largest banks.

Upon taking office scant months later, President Obama granted loans to American auto companies in order to save them, and their thousands of employees, from insolvency. (Most of these loans have since been paid back, as have some of those rendered to the large banks.)

The president also took steps to lessen the dramatic rise in unemployment by providing assistance to the states, which had seen dramatic drops in revenue flow.

It is these latter measures which could, among others, be called "recessionary spending." These measures did add to America's dire fiscal state.

In taking such measures, both Presidents Bush and Obama acted according to Keynesian economics theory which stipulates that when the economy is retracting this is the time to increase spending. Only when the economy has recovered, and unemployment is much lower, can payment of debt on any significant scale be resumed. It is also easier to pay down debt from a tax base expanded by improved employment.

On the other hand, if governments concentrate on reducing deficit levels through the contraction of spending before fighting unemployment and preserving safety nets for the poor and unemployed, the debt level will continue to rise while the economy contracts further or only feebly staggers forward.

We can see the actual consequence of making such a bad policy course in the current plight of the Eurozone economies.

Why is it, then, that many voices insist that the deficit is the most important issue, while denouncing any emergency spending to alleviate the negative impact of recessions on people?

Now we are getting to the meat of the issue. What is really going on is an extension of policies begun under President Reagan 30 years ago - a deliberate attempt to "starve" government of revenue so that conservative forces can eliminate those programs intended to aid the poor and unemployed, and to provide assistance to the ill or elderly.

'Trojan horse'

David Stockman, President Reagan's first director of the Office of Management and the Budget, let the cat out of the bag in several candid interviews in the 1980s when he admitted that efforts by that President to cut taxes was a "Trojan horse" designed principally to bring down tax rates for the rich.

Mr Mesaros railed against "recessionary spending." It is interesting to consider what the political right considers as falling under this category.

It is clear, for instance, that all measures to provide unemployment assistance, or loans to auto companies, or assistance to struggling state governments, etc easily fit. However, in recalling that the federal government continues to spend massive amounts elsewhere as well, we need to probe a little further.

Does spending for the military when we have a deficit represent "recessionary spending"? Nope! Hmmm. What about further negative impacts to the deficit by cutting taxes even more for the rich? No again! Can we continue to support the Social Security and Medicare programs for the elderly? No, they must be curbed. Can we continue to allow tax breaks to corporations, including for the giant energy companies? Oh, yes! The hypocrisy is stunning.

We certainly must address the deficit, first reducing and then eliminating it over time. But we cannot do so blindly, robbing poor Peter to pay rich Paul. What America needs even more these days is a commitment to the restoration of a true democracy where the needs of the people - not the wealthy elite - come first.

Responsible deficit reduction would include not only appropriate tax increases on those most able to bear that burden - and it is hard for me to cry over the "burdens" of millionaires and billionaires - but also looking seriously at eliminating tax subsidies to corporations, placing reasonable restraints on the military portion of the budget, and taking steps to ensure the continuation of the vital programs of Social Security and Medicare for the elderly, and expanding Medicaid for the poor.

The central problem - and tragedy - in the US today is the almost complete triumph of a greedy plutocracy that almost totally controls the federal government and many of the states. They are working hard to buy this November's election, and they may well succeed.

The author has been a college teacher of American history and political science, the director of the US National Catholic Rural Life Conference; he served as a member of the Iowa State House of Representatives, and retired from public service in the Iowa executive branch in 2004. Shanghai Daily condensed the article.