By Ian Ocx and Hari Kumar, Red Phoenix correspondents.

Late in the night June 1, 2023, Congress voted to pass an agreement on the debt ceiling to prevent the US government from defaulting on its national debt. This debate recurs frequently as the representatives of differing factions of the ruling class fight to preserve their advantages. As they do so it is the workers that end up being squeezed further. However, they reflect the factional struggles within the ruling class.

What is the “debt ceiling”? Like any organization, the government operates within a budget. If its previous outgoing payments exceed that, it risks “default” — being unable to pay its bill. These past bills were already previously approved by Congress. In recent years there have been an increasing number of such debates as priorities are set for future spending by the Senate and House. The national debt began to mount seriously with the First World War. According to Department of the Treasury data it escalated rapidly starting with the Reagan administration, that is, with the onset of the neoliberal era and the increasing domination of the financial wings of global capitalism. We have discussed this in detail elsewhere. 

It is worth making two points. First the equation of a state with an individual household is ridiculously naive, as the more insightful bourgeois commentators, for example Paul Krugman, make clear. Individuals have an earning curve that declines after they hit a peak as they age. The same is far from true of governments who “normally see their revenues rise, generation after generation, as the economies they regulate and tax grow.” Governments do have to “service” the debt — pay off bits at a time. But the state does not have to pay it all off and can defer it to the future far more easily than an individual household. Krugman drives this point home with the example of the debt incurred by England during the Napoleonic wars, which were deferred for decades and decades and to this day have not been totally repaid.

Secondly none of this is new. It is fundamental to capitalism. Marx wrote in Capital Volume III that:

“The only part of the so-called national wealth that actually enters into the collective possessions of modern peoples is their national debt. Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making … The public debt becomes one of the most powerful levers of primitive accumulation.” 

That is why the debt ceiling is a matter of politics and not simple accounting. Senate majority leader Chuck Schumer even went so far as to say that with the reaching of this agreement, “America can breathe a sigh of relief.” The immediate next question is: who in American society can breathe a sigh of relief? Perhaps the bourgeoisie and their representatives in the government, but it will not be the American working class, who, without any proper national representation, lost the most in this debt ceiling agreement. 

The agreement that was reached allocates a total of around $1.5 trillion dollars that will be used to fund the government for the next year. The budget is broken down to show an $886 billion military defense budget, but only allocates $704 billion for non-defense spending. This in turn means that while the US military-industrial complex will encompass 60% of the budget once again, the American working class faces austerity measures in order to satisfy the needs of US imperialism. The current debt ceiling agreement also entails several expanded work requirements making it more difficult to receive and keep food stamps. This will also cut funding and limit the amount of credit families in the Needy Families program may receive, and student loan repayments will restart. This attack on working class families comes at a time when 34 million people in the US face hunger and food insecurity with 9 million children living in food insecure conditions, and while student loan forgiveness plans are being struggled for on a national level.

Discussions concerning the national debt ceiling are nothing new to the American worker and they reappear in bourgeois political circles and bourgeois media outlets regularly. Each time these debates and such agreements in Congress are reached, it is the American working class that is told to pay the price and “tighten their belts” so that the US does not default on its national debt. Each time the limit is raised to “keep the country functioning,” the bourgeois politicians decide that it is the workers whose social benefits are cut to make up for the past ventures and policies of the American bourgeoisie.

Debt ceiling debates turn into economic murder for the working class. While there is a new labor movement on the rise it lacks national leadership and representation. The bourgeoisie take advantage of the lack of organized power that the American working class is struggling to build, especially in order to cut the already limited working and social benefits that workers receive. Since the voices of the workers are silent in these debates it is all too easy for bourgeois politicians to simply cut the funds allocated to social benefits won by working class struggles in the US over the years. The results are then justified as necessary in order to keep the government functioning.

In essence, the debt ceiling debate and agreements reached act as a weapon of the ruling bourgeois class to strip workers of the already limited benefits that they are allowed, and as a defense mechanism for the bourgeoisie who see these debates as a time to secure their place, role, and status in American society by diminishing and attacking the lives of the working class. 

The way forward for the American workers lies in the continued struggle to build an organized labor movement with a national leadership that forces the bourgeoisie to moderate its strategy of sucking dry what little benefits the workers have to pay for their system of oppression. The American working class is not represented by the reactionary bourgeois government. It has no stake in this government’s existence as a class. Simply put, the US government does not represent the interests of US workers; it represents the American bourgeois and its class interests. As such, it is not the American workers who should have to sacrifice to maintain the functionality of a government that does not represent them.

Categories: Economy, U.S. News