The big-business media promotes the myth that bonds offer a public service to help finance schools, public transportation, and other things that benefit working people. It also tries to foster the illusion that some workers and those in the middle class can assure themselves a measure of stable income through investing in bonds.

Bonds, however, are designed primarily to enrich the superwealthy, taking a little more of the surplus value that workers produce. Municipal governments run on deficit budgets and float bonds--which serve as loans--to make up for the shortfall. The overwhelming majority of these coupons are bought up by multimillionaire and billionaire families who have enough money capital to purchase coupons and skim off interest until the principal is paid back in full years later. As a bonus, it’s usually all tax-free.

In times of economic crisis, the government uses the "budget deficit" argument to justify slashing social services and city and state jobs. Capitalist bondholders are protected by the "full faith and credit" of the government coupons they hold, however, and continue to receive payments on interest and principal. In the "budget debate," their profits come first, while the burden for the financial crisis is placed on the backs of working people. In other words, to ensure interest payments to the rich coupon-clippers, workers are told we must accept cutbacks.

A prime example is the current New York budget. This year Mayor Michael Bloomberg has tried to drive through the slashing of funds to the Administration for Children’s Services, pension and health benefits owed to city workers, and the building of new schools, among other services.

Today, some workers in the Bronx who have been pushed out of their homes have the blessing of staying in an abandoned prison, with lead paint on the walls, that serves as a city shelter. Meanwhile, in 2002 the city will spend 20 percent of its budget to pay debt service straight into the hands of the billionaire coupon clippers.  
 
Nest egg for workers?
The rulers try to convince the middle class and layers of the working class that they can ensure a stable source of income, and even get ahead, by investing in stocks, bonds, or 401 (k) retirement schemes. The labor bureaucracy ties billions of dollars earmarked for workers’ pensions into these paper values. They feed into the myth fostered by the rulers that "we"--exploited and exploiters alike--have a stake as "stockholders" or "bondholders" in maintaining the capitalist system.

These illusions can be rapidly shattered, however, not only by a collapse in stock and bond markets--as we are seeing today--but by mass layoffs that often leave working people with no protection.

Einhorn asks what kind of program socialists put forward. As the U.S. economy spirals deeper into a depression, it is easier to see the need for workers and farmers to fight around a program that defends the interests of all working people against the ravages of the capitalist system. Such a program should begin with the demand of jobs for all at union-scale wages, a demand that helps cut across the biggest division in the working class--that between the employed and unemployed. This includes calling for a public works program to build schools, housing, day-care centers, parks, and recreation centers, and other services that benefit workers.

The starting point of labor’s demands cannot be what is profitable for the ruling rich, but what working people need to protect ourselves against attacks on our social wage. As part of that, the demand for a steeply graduated income tax on the wealthy, excluding workers and working farmers, also strengthens the hand of the exploited.  
 
 
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