Many of us are still reeling from Congress's down-to-the-wire agreement on the debt ceiling that may have averted, at least temporarily, a catastrophic downgrade in US creditworthiness. The compromise consisted of USD one trillion in budget cuts and the creation of a new congressional committee to oversee an additional one and a half trillion in promised reductions. However, there were no immediate plans to increase revenues and the deal lacks any repair to our already failing social safety nets offering instead only token fixes to ballooning federal deficits.
In the United States, working families, already struggling with stagnant job and housing markets, may be crushed under the weight of these latest cynical and destructive maneuvers.
While the affluent continue to be cushioned by their accumulated wealth from feeling any real pain over the turbulence in the economy, the rest of us are not so lucky.
For communities of color, the recession has had dire consequences even before this latest crisis. A Pew study released last week outlined the extent of the racial wealth gap: white households have on average 20 times the wealth of black households and 18 times that of Hispanic households. It was the "worst disparities in a quarter of a century," according to the Women of Color Policy Network at NYU Wagner. It is important to realize that African-American women earn only 62 cents, and Hispanic women only 53 cents, for every dollar earned by white, non-Hispanic men, as reported by the National Women's Law Center.
What will a further weakening of our economy mean to families, small businesses, local and state budgets, pensions, student loans, and property taxes? In a time of molasses job growth and increasing uncertainty about how to confront our failing schools, crumbling infrastructure, and lack of energy and environmental policy, now is not the time to be decimating critical programs, like Medicare and Social Security.
Holding the US economy hostage to political expediency is a radical and irresponsible tactic. Sadly, it is the least vulnerable of our citizens: low-income and often female-headed households and not the wealthy, the powerful, or the influential, who will bear the brunt of the fallout.
This crisis has sent alarm bells through an already skittish global market and the aftershocks will reverberate for months, maybe years to come.
As PIMCO CEO Mohamed El-Erian pointed out, worldwide perceptions of US credit-worthiness may be thrown into a tailspin of closing doors on badly needed opportunity and growth.
As concerned citizens, we need to keep our eyes on the ball and challenge any attempts to underplay the seriousness of the current situation as we renew calls for bringing balanced and sustainable growth to our shaken economy.