By Steve Fraser
11-29-11

Steve Fraser is Editor-at-Large of New Labor Forum, a TomDispatch regular, and co-founder of the American Empire Project (Metropolitan Books). A historian of Wall Street, his most recent book on the subject is Wall Street: America's Dream Palace. He teaches history at Columbia University. This article originally appeared at TomDispatch.

In 1729, when Ireland had fallen into a state of utter destitution at the hands of its British landlords, Jonathan Swift published a famous essay, “A Modest Proposal for Preventing the Children of Poor People in Ireland from Being A Burden to Their Parents or Country, and for Making Them Beneficial to the Public.â€

[i]The Obama administration like the Bush administration before it, and the one before that, and the one before that, has bent its knee to “the Vatican of capitalism.â€

I see.
So the chap who bought "more house than he could afford" when his house was over-appraised by the banksters who then deliberately devalued his house via their fraudulent derivatives and then demanded the difference between the two or get foreclosed needs to "suck it up"?

Yup!  He didn't buy an evaluation.  He didn't buy a devaluation.  He borrowed money that he didn't have the income to pay back and he knew it.  He and the bank both fell into the ponzi scheme thinking that, by the time he got to the point where the grits and the pan met the house would have appreciated enough that he'd be able to get out of it.  It didn't work that way and he's as much to blame as the bank is.

When I bought my house I was actually approved for a mortgage two or three times as high as I actually borrowed.  What I looked at when I took the loan wasn't how much I could spend but, rather, how much I felt I could comfortably pay because those payments were going to be my responsibility.  If the value of the house went up great.  If it went down, to bad, so sad.  But, either way, my responsibility was to pay the mortgage. 

  

And my point is that it's not just the one percent who are going to have to pay their share.  The middleclass in the U.S. has been getting a bit of a free ride too.  Something that doesn't get mentioned a lot is that, when the Bush tax cuts expire next year, middle class taxes go up too.  Not just the rich.  One of the things I really disagree with Obama on is this pending cut to the the Social Security tax.  Social Security is already in trouble and he's cutting funding?

  

Please re-read my post.

  

 The middleclass in the U.S. has been getting a bit of a free ride too.

It's all gobbledygook to me...

I get my disability check... I pay my bills... I buy food... I rub two coins together for the rest of the month.

Everybody is going to have to pay more.

Very true and I think most recognize that.
But that still fails to address the corruption that turned a workable government system into an unworkable one.

The middle class wasn't asked. It was told - remember "trickle down"? They didn't tell you what was trickling down. It was the 1% pissing on everyone else.

"Greed is good."

So is revolution.

But it was the middle class that elected and then re-elected Reagan and Bush.  It's also no longer matters whose fault it was.  The problem is so big that everyone has to work at it.  Remember, Sid, we went through the same thing back in the nineties.  It hurt for a bit but then we had a long string of balanced budgets and, despite the constant bitching, our social programs all intact and well funded.  Unfortunately due partly to the recession and partly to Conservative ideology we're back into deficits again.   

  

Also, unfortunately, the middle class is rapidly shrinking. On top of that, a large portion of them are just above the poverty level. If they are imposed higher taxes, you'll see rapidly rising poverty. That won't help anything and will severely strain what little assistance is provided by the Feds (if the cons don't cut them all out).

IMO, the 1% should shoulder the majority of the burden for a few years, until things settle.