Do you think the country will default?
Personally, I do not. I think what it keeps coming back to is that the debt ceiling has been raised repeatedly in the past (including over a dozen times during the Reagan years) Suddenly making an issue of it simply stinks too highly of partisan politics, and most of that stench seems to be clinging to the GOP. Will they really be so stupid as to shove the country into default as part of a misguided attempt to try and score political points? I doubt it.
PAD
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Short answer: no I don’t think we will default but the chances are pretty good that the GOP will force Obama into signing some kind of short-term deal that will only be good for several months, thus ensuring that we have to do this all over again, as well as pretty much keeping the White House from doing anything in the run-up to the next election.
I hope you are right , but this time seems different . The freshman members of Congress seem hëll bent on the current path , and seem unaware of the larger costs to us all if they are sucessful .
And some of them know full well, but are revolutionaries who want to burn the whole thing down.
Ok, lets look at what might happen…
So, we don’t raise the debt ceiling. Some of our bills don’t get paid, probably for purchases that the government can just put off for a while. The ratings agencies downgrade the US treasury, so they have to start paying higher interest.
This causes interest rates to rise across the board. Suddenly, banks, who haven’t been loaning any money because they don’t make enough interest to be worth their while, can suddenly make profitable loans again. Those who have money in the bank start getting better interest rates on their money. Businesses that couldn’t get a loan because they were too small to be worth the banks time, suddenly find that they can get loans again!
There is always a silver lining!
Charlie
Your silver lining is completely destroyed by the fact that interest rates on credit cards and so on will go up as well, costing all of us far more than any potential ‘benefit’.
Also, those small business barely able to pay the loans they have or afford the loans available — screwed.
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And let’s not forget mortgages with adjustable interest rates …
It’s not just political points. It’s what the Tea Party believes, about the role of government and also the role of Big Business. To them, defaulting is just a way to restore balance to both. I disagree completely and think they are nuts, but this is why it’s not a game of chicken.
Initially, I was convinced that all the political posturing was just a negotiating tactic that would culminate in the usual 11th-hour compromise, but now I’m not so sure. I think the difference this time is that we have a group of die-hard fanatics in Congress that has hijacked the process and is determined to drive us all over the edge of the cliff that’s looming ahead. They have no incentive to reach a compromise, because they’re convinced that nothing bad will happen. I still think a compromise will probably happen, but I’m getting worried. And don’t forget about Wall Street – the economy could jump the tracks before we even get to the drop-dead date. I have family members that have been stockpiling food, water, and other necessities against the imminent collapse of the economy and implosion of our currency; I’m not laughing at them nearly as loudly these days.
I think we’ll manage to avoid a default, because doing so would be good for both sides. For Obama, it would keep the country from sliding into worse economic troubles before his re-election campaign begins. For Republicans, it would help their constituents in the business world avoid facing massive costs in increased interest rates (not to mention a much weaker U.S. dollar).
What scares me are the Tea Party members of Congress. For better or worse, much of the work in Washington is done by compromise. (This is usually for the better, as it helps mitigate the excesses of either party when they get everything that want.) Unfortunately, the Tea Party position seems to completely ignore compromise (“Dems don’t want to cut spending, Repubs don’t want to raise taxes, so we’ll do some cuts Dems don’t want and raise some taxes Repubs don’t want) and instead go “we’ll default on our obligations and destroy the U.S. economy before raising taxes on anyone for any amount.” They don’t seem to realize (or believe — a lot of them are quite happy to ignore economists who lay out the dangers of default) the consequences of not reaching a deal — or that refusing to work with their “opposition” (who are fellow Americans elected to office, BTW) doesn’t make them patriotic.
(And I’m glad Obama is standing his ground this time. Far too many times he’s given the Republicans whatever they wanted and gotten almost nothing in return. Considering he campaigned on ending the Bush tax cuts and already renewed them once, I’m thrilled he’s not giving the rich a free pass again while cutting help for the most needy in America.)
We’re doomed.
Er, sorry. What I mean to say is that there isn’t a good way out of this, even if a deal is struck tomorrow, because all of the deals that might pass Congress are still lousy policy that will harm the economy in the short run. That’s not to mention that Wall Street and/or foreign banks could panic at any moment and screw up our credit rating for years.
A small part of me almost wants to see a catastrophic default at this point, simply because I think it’s the only thing that might scare Congress and the public enough to move us back towards a sensible government that understands the fundamentals of compromise, negotiation, and working towards a common good for the country. If we scrape by again without consequences, things will only get worse next time (remember we still don’t have a budget for FY12).
On second thought, I think I nailed it in the first sentence. Heh. Thanks for giving me an excuse to drain off some of the bile.
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“Suddenly making an issue of it simply stinks too highly of partisan politics, and most of that stench seems to be clinging to the GOP. Will they really be so stupid as to shove the country into default as part of a misguided attempt to try and score political points? I doubt it.”
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I hope not. However, we’re not merely talking about the GOP here. We’re talking about recently elected Tea Party candidates and the part of the party that tries to pander to that base. Some of that crowd ain’t proving to be too swift on the uptake.
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My hope is that we see a turnaround like we saw with our Governor here in Virginia. He was playing to that part of the base not too long ago, but when it was announced that several states would get their bond ratings killed along with the nation’s, and possibly before the actual date that the country would theoretically default on, he suddenly found the idea of not doing something about this a very serious issue. If we’re lucky, others will follow his lead.
John Boehner has already assured Wall Street that there won’t be a default. Both houses of Congress, and both parties, serve their ultimate masters.
And then, there’s this:
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http://spectator.org/blog/2011/07/27/obamas-people-admit-he-was-lyi#
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Nope. No default. It’s all lies and threats. As is the notion that Social Security checks will not be sent out.
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That article isn’t proof of anything, Tim. Okay, he’s trying to reassure banks and business that he won’t let the things come crashing down and into flames. Does the article discuss how he’s going to do that? Does the article say that the government won’t go broke or will still be able to pay the bills it owes?
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Actually, even the article you cite says that there will be issues and that Obama’s team is telling people that there will be issues.
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“Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders.”
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Obama is having his people tell financial power brokers to not panic or freak out. That’s smart. What the article doesn’t discuss (while calling Obama a liar) is what exactly they mean when they say that they “privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.”
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What does that mean, Tim? Does it mean that nothing happens if we blow through August with no deal in place and no increase in the debt ceiling made? Does it mean that the Obama Administration will, as some have floated here and elsewhere, act unilaterally to preserve our financial state and find a means to raise the ceiling that will ultimately be thrown to the Supreme Court for a ruling?
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We don’t know. We certainly don’t know from the article you linked to. What do we know from that article? We know that the The American Spectator is still big on posting/printing vague half quotes and pretending that they actually say/mean anything of substance while spinning like mad.
If that’s the case and both sides are lying, then the comparing of pëņìš sizes for the sake of party image must stop immediately. This game of chicken has already had a negative impact, and it can only get worse from here.
Um….
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I was agreeing with Elayne. She said, “Both houses of Congress, and both parties, serve their ultimate masters.” She cited an article indicating that the Repubs were up to no good. I cited one that indicated that the Dems were playing the same game. I didn’t disagree with her info. I just added additional info.
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Why is that a problem for you? PAD asked for opinions, and I chimed in on the side of no default, while agreeing with others here. Why the hissy fit? Do you honestly believe that Obama isn’t being partisan in this?
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Of course there’s partisanship to greater and lesser degrees being displayed by both sides here. I’m not disputing that. I was just reacting to the article you linked to. I don’t agree 100% with the content of the article Elayne linked to, but the writer at least took the time to try to lay out a convincing point of view. And they took a nice backhanded swipe at Obama in the end. 🙂
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The Spectator article, and I would barely call it that, declares that Obama is lying about what will happen if the debt ceiling isn’t raised and supports that by offering… Well, nothing really. I clicked the link expecting at least something readable and found something that might as well have been an empty page given that there was so little substance in what was actually there.
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Just reacted to the article is all.
You have a very interesting take on things. Elayne’s article isn’t news. It’s analysis. It’s the writer’s opinion on what Boehner is up to. It doesn’t quote anyone. It doesn’t have any sources. It’s an opinion piece of what the writer thinks the Repubs are up to. I don’t disagree with it. I’m just saying.
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The article I linked to is an opinion piece that cites a Fox Business report as it’s basis. I see that I should have cited the Fox report instead of the resulting American Spectator piece. The Fox Business article is an actual news article that quotes unnamed banking sources as stating that while the Obama White House is threatening default publicly, they are privately reassuring banks that this is not going to happen.
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I don’t disagree with either article. I think both sides are playing politics. What I disagree with is your rather strong reaction, which I can’t see any reason for.
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No, I know that her link doesn’t go to a news piece. I also noticed that the thing she links to doesn’t actually really support what she said in the post she linked it in. However, the piece she linked to at least was written in an intelligent manner that tried to make and support a position with some level of coherence and logic. I might not agree with it completely, but it was at least interestingly argued and well thought out. The Spectator piece was basically putting up a vague half quote and declaring that Obama is lying about what will happen if we don’t get the matter worked out in time without actually supporting any ideas our positions in the least.
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The Republic article, biased as it may have been, was at least an interesting food for thought piece, The Spectator piece was drivel that only qualifies as intelligently written by the fact that it isn’t rife with spelling errors and misused words.
I hope not either, but if it does happen, it’ll be default of the Tea Party.
Under Section Four of the Fourteenth Amendment, it is possible that Obama might be subject to impeachment if he doesn’t act – with or without Congress acting to raise the artificial debt ceiling that Congress created – to avoid a default.
Wikipedia’s article on the Fourteenth Amentment states:
I was under the impression that the president already had his lawyers inspect that possibility and there wasn’t any firm footing for that approach.
There’s a lot of to-and-froing.
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Quite a few Constitutional scholars are more or less in favour of it.
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The only way to find out is to try it – and the only Supreme Court decision with any relevancy basically holds that Congress does not have the power to set aside Government obligations – which is basically what the debt ceiling does, in practice.
I’ve been reading about the 14th Amendment for a while now. Personally I’d love it if Obama invoked it and used it to do whatever was necessary. It would be the equivalent of hauling out a huge pair of scissors and cutting right through the red tape. “The people elected me to get things done; I just did. The GOP doesn’t like it? Let them try to impeach me for following the Constitution. Good luck with that.”
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PAD
Exactly! Maybe this has all been part of Obama’s Master Plan! After the debt ceiling is hit, he goes in and resolves the budget directly, slashing and burning as he goes due to the crisis!
Oh, I wish he WAS this devious. Unfortunately, I don’t think they have that much imagination… 🙁
Charlie
NPR had the President’s (Daily?) chief of staff on this morning. He said that their lawyers had looked at the 14th Amendment argument and that they didn’t think it was legal. He came right out and said that the President couldn’t do it without expecting to be impeached.
Well, Obama did once say (I’m paraphrasing here) he’d be glad to be a one-term president if it means he got some meaningful changes done. Unfortunately, most of the time he seems to just cave into Republican demands (Gitmo remains open! Bush tax cuts remain! Health care weaker!) in exchange for, well, nothing.
Maybe this is the time when Obama finally steps up and says “I’m doing this for the country” instead of “The House won’t give me what I want, so I’ll give them what they want.”
Number one, even the White House has ruled out acting unilaterally with the 14th Amendment.
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See http://www.foxbusiness.com/markets/2011/07/26/white-house-says-14th-amendement-not-available-to-avoid-debt-deadline/
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Number two, your understanding of how Obama could use the 14th Amendment is simplistic at best. It would not be like cutting through red tape. It would be more like cutting through the Constitution or using it in a way that would almost certainly be rebuked by the Supreme Court.
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We have checks and balances. Three branches of government. Obama could no more act like a dictator and hide behind “following the Constitution” and unilaterally interpret an amendment to be used in a way it never has before it any more than Bush, Clinton, Reagan, Carter or Nixon could.
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And the President is elected to “preserve, protect and defend the Constitution” and represent the people who elected him, not just to “get things done”, “popular will and founding document be dámņëd”.
Given that the latest deal offered by the Dems (as of 8:20 PM Pacific time, 7/26) cuts the budget by as much as the Repubs wanted, and includes no tax increases, is being rejected by the Repubs because it doesn’t cut the right budgets and would not expire in the middle of the Presidential election cycle, I begin to doubt that there’s much the President can do (aside, perhaps, from ordering the Attorney General to hold all of Congress in contempt of Congress for failing to uphold Amendment XIV). The Republican Party can’t even say yes to what is, essentially, their own plan, because it’s being offered by the wrong side.
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One hopes that they will come to their senses and begin to listen to their own constituents (who have reportedly been flooding Capitol Hill phone lines and websites with concerns, and overwhelmingly favoring a tax increase on the wealthy to help solve this issue)…
The Republican Party can’t even say yes to what is, essentially, their own plan, because it’s being offered by the wrong side.
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And this is nothing new. After all, “Obamacare” was in part basically GOP-care before the Dems decided that they liked it after all.
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For Boehner to make a comment like he did last night, about Obama wanting a ‘blank check’ after the Bush years, is just downright insulting.
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The Bush tax cuts need to expire. Corporate tax loopholes need to be closed. The deficit cap must be raised again for the time being. In short, not a dámņ thing that the suddenly again fiscally conservative Republicans will care to do because they care more about how they can get the White House next year.
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So, nothing from the (far) Right would surprise me right now. Up to and including allowing this country to sink into an economic nightmare to improve their odds of ‘winning’ the next election.
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And, just for good measure, slash all congressional pay by 75% and remove all of their health care benefits, and then see how many of ’em still want the job.
I love the slash congressional pay idea. You just need to include their staffers as well!
There are several simple truths. First, we have enough money to pay our debts. The problem is that we NEED to borrow over fifty cents on the dollar that the present budget has allocated. It doesn’t excite people to tell them that we will have to slash dozens of little programs, so instead they talk doom and gloom!
By law, the first thing they have to pay is the interest on the debt, so we won’t default. We have more than enough coming in to do that.
Second, social security just about pays for itself. The money coming in from worker’s paychecks covers something like 95% of the benefits being paid. If they told all the seniors and disabled that they will have to reduce their payments 5%, it wouldn’t cause any panic, so where’s the fun in that!
The real truth is that the bills they won’t be able to pay are the salaries of federal workers and contractors, who might then go elsewhere to get their gravy train…
This would remove their power, and that would be a REAL disaster! 😉
Charlie
*begin rant*
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Well, apparently slashing dozens of little programs does excite some people. Otherwise, talk of cutting all funding for PBS, Planned Parenthood, National Endowment for the Arts, and many others, all of which receive a pittance in the grand scheme of things, would never even come up.
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The only problem with Social Security right now is that the government has borrowed against it, which should never have been allowed.
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But in the end, I can’t help but wonder if this country is up a creek, regardless. Everybody wants the economy back on track, but how the hëll are we supposed to do that?
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Corporations are getting record profits, but often paying little or nothing in taxes. The rich-poor divide continues to widen as the rich somehow get the poor and middle-class to complain on their behalf that that the rich are paying too much in taxes. Oh, I forgot: too many people are still too naive to believe in “trickle down economics”, one of the biggest farces ever played on this country.
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There are no new jobs being created as more and more of them are shipping overseas; manufacturing is all but dead in this country. Unless you think part-time, minimum wage McDonald’s qualifies as manufacturing and real job creation. I’m sure down the road we’ll find another unnecessary war or two to fight in. The costs for food and goods aren’t going to be going down and look to ‘outperform’ inflation.
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How does anybody think that we’ll recover when corporations are just hoarding money instead of spending it on jobs, and the poor & middle class have no extra money to put back into the economy? How does it help things to have the rich pay less in taxes when they have no reason to spend? How much longer can we all expect to life and die by the stock markets?
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Take, for example, the company I work for. It’s a small business, no more than a few dozen employees. At the height of the housing boom, we had over 60 employees. This year alone, we’ve lost 3 employees for various reasons, and we’re not going to replace any of them. It’s simply “cut costs, keep costs down, everybody do more”.
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So what’s the point of giving my employer more tax cuts and more incentives and so on when, unless the housing market recovers overnight, we’re flat out never going to hire anybody?
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What a joke we’ve become.
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*end rant*
The belief in trickle-down economics isn’t naivete, it’s part of their theology of the free market. It’s a given that economics is always mired in ideology, but they’re taking it too far.
I guess I should’ve specified there who I think is being naive.
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Those in power believe in it, because they’re already in power and benefiting from it. They’ve got nothing to lose from spouting the bs.
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Everybody else, which is the vast majority of Americans who also think the American dream is still alive and well, should know better.
I was gonna say something but you guys al beat me to it.
I have to agree with the general consensus that the country will not wind up defaulting.
However all this internal bickering might result in our International credit rating being reduced anyway.
Why can’t they raise the debt ceiling enough to just cover inflation and interest on what we already owe? Is there some rule that says it can’t be adjusted for only those two factors?
I do personally think the Republicans are making a stronger stand in hopes of having their party look good, especially in light of the fact that they don’t have a viable candidate for the 2012 election yet.
But am I the only one who noticed that Boehner never once mentioned the rich’s tax cuts in any way, shape, or form during his response to Obama’s address Monday night?
He only kept commenting about fiscal responsibility and the tough times we’re facing.
My budget is as tight as it can be. What about theirs?
I am extremely worried about how the debt ceiling thing is going to work out. I think that all the players believe that they have a good idea how they’re going reach a deal, but I keep coming back to how horribly similar that is to the thinking of great European Powers I the run-up to World War I.
They all thought that war was impossible because their huge collection of mutual treaties made it unthinkable that anyone would actually start that ball rolling. Then some nobody in Serbia who didn’t know and/or care about such things assassinates Archduke Ferdinand and the dominoes start falling. The machinery was impossible to stop once it started. I’ve heard that at one point the Keiser wanted to stop an action that would put Germany at war with Russia and was told by his generals that it was too late because “the troops were already on the trains.”
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That’s a long-winded and meandering mess, but the short of it is that even though the consequences of default make it unthinkable doesn’t mean that the players aren’t going to paint themselves into a metaphorical corner and the blame each other for the whole thing.
There’s one thing I really can’t understand: why can’t governments solve debt problems the way ordianry folks like me do? Case in point:
In 2007, when Nicolas Sarkozy took office, his prime minister, François Fillon, told reporters that “the country is on the verge of bankruptcy”. He was right. France is really deeply in debt. When I was in debt (three credits, amounting to some 8000 € in total), I did the sensible things: a) raise my revenues, by doing overtime, b) cut down my expenses, and c) avoid taking any further credits. The result is that, after much effort, I ended up being debt-free, and has been so for the last three years. But that’s not what the Ferengi living in the Elysee palace did, no, far from it. First, he instaured a fiscal reform benefiting the richer (some of them having managed not to pay any taxes at all). He also raised his salary by some 170 %. And bought himself a plane so he could have his own Air Force One.
Now, I realize, of course, that a country is not a single-person household, but couldn’t those that govern us (whatever their political leanings) use a little common sense? Like not spending the money you don’t have, for starters?
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So, choose which orphan, little old lady, endangered species, or crime victim you would like to throw to the wolves when you stop spending that money.
Your principle is sound. Your practicality is much tougher. Every dollar is spent because someone somewhere thought it was important, and will fight to keep their dollar.
Iain, by the nature of the things you’re thinkiging that I would cut, i could infer you probably think that I am a UMP voter (the french equivalent of the Republicans). Except that I’m not. I noted two examples of spending that Sarkozy has done which would have De Gaulle spinning in his grave (let’s remember that, for all his faults, the General knew that his personal expenses should not be paid with public money. After all, he installed a electric-light meter in his private appartments in the Elysée, and paid for his own electricity with his own money, not on taxpayers francs).
So what I would cut would be luxurious expenses like the ones listed in my first post (after all, did the Elysée Ferengi, whose private fortune was alrady not inconsequential before he took office, really need a pay raise of 200%? Does the leader of the french military need a private airplane? I think not.)
And yes, I maintain that Nicolas Sarkozy is a Ferengi in (not a very good) disguise; Look at the evidence: favouring the rich and pìššìņg on the poor, attracted to beautiful ladies taller than he is, and that smile… He could be played by Armin Shimmerman!
Well, at least Donald Trump is stupid enough to say what the rest of the Right-Wingers are afraid to: Force the country to default to keep Obama from being re-elected… no matter how many people (read: poor people) will suffer. I can’t believe people were seriously thinking of voting for that idiot Trump for president.
The country is not going to “default” if an agreement is not reached by August 2. There is a a very strong likelihood that our ever-increasing debt, which will increase even more if the ceiling is raised, could cause us to lose our AAA credit rating.
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THAT could have enormous consequences that no one can truly predict.
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Open your eyes.
Mr. David, never EVER underestimate the power of stupid.
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I give it even odds.
In order to recognize the utter dishonesty of the GOP in this brouhaha, you only need be aware of two things:
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* The House GOP refuses to raise the debt ceiling, citing the need to control deficits.
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* As their proposed budget, the House GOP recently passed the Ryan Plan … which, in order to effect, would require that the debt ceiling to be raised since it runs huge deficits.
I really hope this idiocy is resolved soon: I’ve been postponing buying my airplane ticket to DragonCon just in case the GOP succeeds in suicide bombing the economy.
The possibility of President Obama using the 14th Amendment has now made the news.
If Congress doesn’t raise the debt ceiling…
…I will die.
That is not fear, hyperbole, that is a cold hard FACT. I’m disabled and my only source of income is my disability check without that I can’t pay my rent, my bills, and most importantly I can’t buy food, or my meds.
Now I voted for Obama in 2008 and I haven’t a cost of living adjustment since he came into office due to poor economy and I have had no problem with that sacrifice. I voted in the 2010 mid-terms for the first time a full Democratic ticket in previous elections I would split my vote the reason was I hated and still hate everything the Conservative Republicans Teabaggers represent.
I trust Obama over any of the those GOP/Teabaggers morons who as my late grandmother (who was a hardcore Democrat) said don’t know their áššëš from a hole in the ground.
My father is on social security and just got his medicare (which I also have and believe me it works) and he is danger too.
If these GOP/Teabaggers want to prove that they are patriots they should raise the debt ceiling and stopping wasting time because if they don’t this country will head into a depression that will make the one back in the 30s seem like a day at beach and in the end this country will tear itself apart.
I know in the grand scheme of things my life and death would mean very little to anything but I would like have a few more years to enjoy my life.
Well, the Republicans probably would say that if you just worked harder, then the invisible hand of the market would have lifted you up. In other words, it’s all your fault, buddy. Don’t come crying our way, because it’s a deadly sin if one rich guy has to pay one more cent of taxes.
Conservatives would say that if we weren’t conditioned to believe it’s the government’s job to take care of the disadvantaged, and we weren’t paying so dámņ much in taxes, that people would pitch in individually to help. My family has hit a financial rough spot, and it is my friends, not the the guvmint, that have pitched in to help. I don’t think a one of them earns close to $40k a year, and all of them but one have families. Before I hit this rough spot, I personally lent over $2k to one friend. I was raised to believe that when your friends or family are in trouble, you take care of them.
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As for the rich not paying their fair share, it’s their money. How is it that the demand for other people’s money is defined as need while we define the desire to keep your own money as greed? I try hard to avoid envy in my personal life, and I refuse to give in to it in politics.
I am sorry, but that sounds incredibly naive to me. What about families that don’t have any generous friends? Or when their friends are as out of luck as they?
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I can see the philosophical basis of your position, I just think they’re unrealistic as hëll considering human nature. You could as well say: let’s abolish all laws against stealing and let’s trust in people’s good faith so they’ll not rob each other.
Alright, who wouldn’t want to see a movie about “tea party hobbits”? 🙂
I wouldn’t.
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Lovin’ the spectacle of GOP internecine warfare. That’s usually a Dem specialty.
I found it hilarious the other day that Boehner was reported to have told Republicans to “get their áššëš in line”.
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The GOP isn’t guilty of goose-stepping for once? What a time they’ve chosen to show an independent streak.
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But then, the Republican Party has made their bed by wooing the Tea Party in the first place. As usual, they cared more about winning those seats – and the Tea Party is simply a branch of the GOP – than whether they could actually *control* those seats.
The more I think about it, the more I think Obama has to step up to the podium and say, “Screw it. I’m signing an executive order invoking the 14th Amendment and raising the debt ceiling unilaterally. And if the Courts and the Senate and the Tea Party want to come after me for single-handedly preventing our global economy from tanking, then I say: Bring it. I’ll be waiting.”
PAD
The other Alexandrian solution: coin seigniorage.
Agreed.
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Sometimes I fear that the ideological divide has become too big and the Republicans just can’t work with non-Republicans any longer.
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For 10 years now, with the GOP in the White House or out of the White House, it’s their way or their way.
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Obama will have to accept this. Either give them the reins of government or utterly disregard them. They have shown that there is no compromising with them.
” They have shown that there is no compromising with them.”
There rarely is with fanatic zealots.
On the other hand, the GOP could deal with the Dems, whose deals always seem to be of the “We will add the taxes and spending TODAY, and do the cuts tomorrow!” type of thing, because they know that they can eliminate the cuts before they go into effect, but will get to keep the taxes and the spending. For once, the GOP is standing its ground, insisting on the cuts first!
Otherwise, we end up like Greece…
For 10 years now, with the GOP in the White House or out of the White House, it’s their way or their way.
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Actually, I like the way Stephen Colbert put it: that the GOP philosophy is, “You scratch my back, I’ll get my back scratched.”
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PAD
For once, the GOP is standing its ground, insisting on the cuts first!
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Right, “for once.” Because all the previous times, when it was Reagan raising the debt ceiling, and Bush the first raising the debt ceiling, and W. raising the debt ceiling, the GOP was okay with it. But they chose this moment in time and this president for their “for once.”
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Please. This has nothing to do with cutting spending and everything to do with hard line Tea Party lunatics trying to bring the economy crashing down so they can endeavor to blame it on Obama and get him out of office in 2012.
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PAD
If Obama did invole the 14th, I’m sure he’d do it with class and maturity. I, on the other hand, would tell Bainer, “Remember all the budget cuts I offered and you rejected them all? Well, I’m invoking the 14th, so I’m raising the debt ceiling and you’re getting NONE of the cuts I offered. See you at the negotiating table, jerkwad!”
(Amazingly, this is far from the biggest reason I could never be president.)
“Please. This has nothing to do with cutting spending and everything to do with hard line Tea Party lunatics trying to bring the economy crashing down so they can endeavor to blame it on Obama and get him out of office in 2012.”
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No, this has to do with spending. W’s poll numbers were low with the Republican base precisely because of the spending. In fact, Democrats recaptured congress by running fiscal conservatives in the 2006 house elections. Then TARP I & II happened and brought frustrations to a head.
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When my son was born on 12/30/2008, his share of the national debt was $35,153. As of June 30th, exactly two and a half years later, his share of that debt is $45,268.
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The Tea Party says they won’t tolerate congress spending away our children’s future. Now when Republican leadership tries to buckle to the Dems, the Tea Party holds them accountable for their campaign promises. If we get another Republican who goes the same way W did on domestic spending, I can guarantee a Tea Party revolt against him as well. The frustration over the deficit and the debt has simmered for decades now, and it’s finally boiling over.
Were that so, Boehner, Cantor, McConnell, Ryan, and pretty much every other legacy Republican would have been thrown out of office for rubber stamping W.’s agenda. Yet somehow, all of these deficit enablers became GOP-base champions without a single one of them repenting for their fiscal sins. Bush only started to become unpopular when he became a political liability after the wave election in 20006. Up to that point, he was venerated as the resurrected Reagan.
Curious that the TP’s couldn’t bother to be worried about the deficit when deficit-exploding tax cuts were enacted during war time, and two wars and a new entitlement were put on the nation’s credit card.
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Even now, the TPs refuse to consider allowing the Bush tax cuts — the biggest driver of the deficit — to expire, close any loopholes, and won’t allow the GOP to accept a deal that is grossly in the Right’s favor … and that’s after manufacturing a crisis that threatens to make the deficit even worse.
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Our children won’t have to worry about Congress spending away their future. The TP GOP are doing their dámņdëšŧ to make certain our kids will have no present.
No, this has to do with spending. W’s poll numbers were low with the Republican base precisely because of the spending. In fact, Democrats recaptured congress by running fiscal conservatives in the 2006 house elections.
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Noooo, W’s poll numbers sucked and the Democrats rolled in because Bush lied to the American people repeatedly, tanked the economy getting us into two wars, and sent his polling numbers into the toilet. The debt ceiling was on no one’s radar and only got there because the GOP and the out-of-control tea party put it there in order to exacerbate the situation and get Obama out of office.
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PAD
“Bush only started to become unpopular when he became a political liability after the wave election in 20006. Up to that point, he was venerated as the resurrected Reagan.”
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The hëll he was. Bush faced constant criticism over the deficit spending. The National Review, Limbaugh, and a whole host of others took him to task almost daily for the deficit spending. He was venerated for his handling of 9/11 and the War on Terror.
Tax cuts don’t explode the deficit. I realize that modern liberals believe government to be the source of all wealth, but tax cuts actually increase revenue. Even Democratic icon JFK knew this to be true. This is fact is even more true in a Keynesian economy which intentionally punishes savings through inflation.
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I’ll float two examples. During the 80’s congress passed a heavy tax on Yachts. The reasoning behind the bill was that people who owned Yachts could afford the extra cash. Those who normally bought yachts either quit buying them or, in the case of John Effin’ Kerry who voted for the tax, they bought and kept their yachts off shore to avoid the tax. This resulted in massive lay-offs in the American yacht industry. Now how much in taxes did those laid off workers pay? The tax increase actually decreased revenue. When that tax was later repealed in the 90’s, suddenly the rich started buying yachts again, and the people who made them started paying taxes again.
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For the second example, let’s look t Obama’s recent rants against private jet owners. He says they aren’t paying their fair share. Your most basic private jet costs roughly $5 million to buy. When a rich guy buys a even the basic private jet, that’s $5 million or Beechcraft get paid. However, that jet doesn’t just occupy space somewhere. I have it on good authority that the yearly maintenance on such an aircraft runs a minimum of $500,000. If the jet owner actually decides to fly anywhere, that cost goes up. That money employs pilots, the people who gas up the plane, anyone the rich guy hires to serve drinks to his buddies on the flight, the oil field workers who provide the resources for the fuel and a host of others and these people pay taxes.
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Though the average “rich guy” (which depends heavily on your definition of rich) can’t afford a jet or a yacht, the more money they make the more they’ll spend, and hence the more people they’ll directly or indirectly employ.
Bush faced constant criticism over the deficit spending
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You honestly believe that? Because the GOP in Congress did just a GREAT job dealing with this that the deficit nearly doubled in W’s 8 years.
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Depending on the source, some estimates say Bush’s wars added $1 trillion to the deficit, while his tax cuts added as much as $4 trillion.
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Yet the Right continues to talk tax CUTS for the rich!? Guess what: tax cuts helped get us into this mess; they sure as hëll won’t get us out.
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All this bìŧçhìņg and whining about how the rich pay too much when their tax rate is the lowest it’s been since the Depression while the gap between rich and poor has exploded since Reagan first took office.
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Solution? Make the poor and middle class pay! Nice.
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Though the average “rich guy” (which depends heavily on your definition of rich) can’t afford a jet or a yacht, the more money they make the more they’ll spend, and hence the more people they’ll directly or indirectly employ.
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And there’s the myth of trickle down bûllšhìŧ.
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The rich are not driving the economy. The rich do not spend all that money, they just put it away. Hëll, much of the rich’s money isn’t even real; it’s in the stock market and such where it will sit for decades.
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And where do you get off thinking that it’s all the rich that are employing people? Because many of them are overpaid CEOs who, in some cases, have received tens of millions for driving their companies into the ground? Or they’ve been rewarded for taking thousands of jobs overseas and driving tons of small businesses out of business?
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But, as I pointed out earlier regarding the bûllšhìŧ, thanks for being one of the naive ones.
“The rich are not driving the economy. The rich do not spend all that money, they just put it away. Hëll, much of the rich’s money isn’t even real; it’s in the stock market and such where it will sit for decades.”
Are you really that ignorant of how the stock market? You think money invested in the stock market just sits there? When an IPO comes, the money raised from it funds the business in question. It provides the salaries for the people who work the company. It allows the company to buy equipment which in turns employs the manufacturers of said equipment. When the company is successful, they receive dividends, that is to say the get a share of profits. They either return those profits into the market for a another round, or they’ll withdraw it and use it.
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“And where do you get off thinking that it’s all the rich that are employing people? Because many of them are overpaid CEOs who, in some cases, have received tens of millions for driving their companies into the ground? Or they’ve been rewarded for taking thousands of jobs overseas and driving tons of small businesses out of business?”
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I never said, “all the rich people” but how many times have you found steady employment from a poor man? Only the government employs people with money it doesn’t have.
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The skill set of the CEO is highly specialized and is something most people can’t do. If they take jobs overseas, it’s to reduce the cost of the goods they produce. You’d rather everyone, including the poor, pay more for the goods and services these companies produce? That would really concentrate money into the hands of these corporations you already despise.
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And while we’re at the where-do-you-get-off-game, where do you get off thinking you’re the arbiter of who gets too much money. You may call me naive for believing in supply-side, but you have arrogance, envy, and hatred in your heart. If those are my choices, I’ll take being being naive.
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The more I read these forums, the more I convinced of the accuracy of George Will’s statement that the natural base of the Republicans is the rich and the natural base of the Democrats is the poor, and both parties do everything they can to expand their base.
“Noooo, W’s poll numbers sucked and the Democrats rolled in because Bush lied to the American people repeatedly, tanked the economy getting us into two wars, and sent his polling numbers into the toilet.
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I don’t think you read what I said closely enough, Peter. I specified the Republican base, for a reason. The democrats base was going to disapprove of W no matter what. Bush takes the blame for No Child Left Behind from both parties. Conservatives will blame Kennedy for writing the dámņ thing as well, but the liberals won’t. The result is Bush’s numbers take a hit on both sides of the aisle, while Democrat numbers stay the same.
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This what is what happened with domestic spending. I remember listening to the election returns in 2006 and being amazed that exit polling data showed voters thought Republicans were the party of Big Government.
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“The debt ceiling was on no one’s radar and only got there because the GOP and the out-of-control tea party put it there in order to exacerbate the situation and get Obama out of office.”
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That’s not true at all. In 2006 an out-of-control Obama made the following statement on the Senate floor. “The fact that we’re here today to debate raising America’s debt limit is a sign of leadership failure. Leadership means ‘The buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”
Are you really that ignorant of how the stock market?
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No, but the over-reliance upon it is a problem.
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They either return those profits into the market for a another round, or they’ll withdraw it and use it.
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And there is part of that problem. Bill Gates sold 5 million shares of MS the other day. Who is that helping unless that money goes to charity?
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It’s likely that a majority of people aren’t in the stock market. They’re not seeing dividends, they don’t have shares to sell.
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The skill set of the CEO is highly specialized and is something most people can’t do.
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Well, it must be nice to have the ‘specialized’ skill set to drive a company into the ground, yet collection tens of millions of bonuses for doing so. Oh, and the employees of those companies? Obviously the CEO was just doing things in their best interest… losing them their pensions, giving them their pink slips, etc.
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You’d rather everyone, including the poor, pay more for the goods and services these companies produce?
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As it is, the rising cost of many goods are still outpacing inflation. And now we just have a 9% unemployment to go with it. This is benefiting the poor how, exactly?
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But yes, it’s *obviously* a good thing for CEOs to be making tens, hundreds, thousands of times more than they did 30 years ago, while sending those same numbers of jobs overseas and replacing them with profits that line their own pockets.
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“In 1980, according to a Forbes magazine study, executive compensation was 40 times the average worker’s pay; by 2007, that had soared to more than 400 times.”
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Because this is what’s best for America. Or some bûllšhìŧ.
Hmmmm… what is it with the interface, that sometimes I have Reply links, and other times I don’t…
PAD,
The Tea Party doesn’t want to bring the economy down… The Tea Party is such a loose assortment of loose and wild cannons that they don’t know WHAT they want!
I should know, I’m one of them! 😉
No, both sides have been raising the debt ceiling higher and higher that some of us have finally started seeing that there HAS to be a limit. Like all those folks that kept re-fi’n their homes every year, taking out more and more equity, there comes a time when you actually have to make the payments. And, not by borrowing more so that can!
And, this has real consequences both ways for us normal Americans. If they keep borrowing, buying off the American people with their own and borrowed money, eventually we will all be in such dependency on the government that we will become Greece, but on a much larger scale.
If they stop borrowing, and are forced to live within their means, then it means a big hit in the economy. All those folks that presently rely, both directly and indirectly on government assistance or employment, are going to be hurt.
It is a typical lose-lose proposition, with neither side willing to make the really hard choices to fix it.
Charlie
No, both sides have been raising the debt ceiling higher and higher that some of us have finally started seeing that there HAS to be a limit.
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This, of course, makes no sense.
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A debt ceiling is in numerical dollars. When an economy grows (which it has over the decades), that numerical number is not and cannot be a concern.
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Ane remember that Greece’s problems is tied it in the problems of Goldman Sachs, not particularly much in government policies.
Roger,
Of COURSE it makes sense! If you wanted to be scientific about it, you could just express the debt ceiling in percent of GDP or something (allowing monkeying with the definition of GDP to allow more more borrowing) but it is much easier to just have a numerical number. Right now, however, the economy is NOT growing, but shrinking, so by your reasoning, we should be REDUCING the debt ceiling, not raising it! 😉
Greece’s problem is not just that they can’t keep borrowing, it is twofold. First, they can’t afford to make the payments on the debt they have, and second, that IIRC 70% of the population is employed by the government. They have become socialist in all but name, and the government has run out of non-government people to tax, so they can’t afford to PAY all those people.
Onve you get below two levels or replies, the Reply button vabishes, a bad side effect of the tiny-width setup…
You do know there is a sizable contingent of the TP GOP who have actually advocated for default, right?
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Living withing one’s means also includes intelligent budgeting, which mean both cuts in spending *and* increased revenue. Only one side has actually advocated that.
For me and you, increasing revenue means working harder, or getting a second job. For the government, it means figuring out who it can steal the money from. The Dems seem to want to demonize the wealthy, or the ‘big’ corporations, so that they can steal their money, but in reality, they want to steal EVERYONE’S money. You see, there aren’t enough wealthy or big corporations to steal from, but there are a lot of US! So, they propose a tax that they say will apply only to the wealthy (while excluding themselves!) that really hits all of us
Raising taxes isn’t the answer. Making a clean start, and rewriting the tax code probably would be the answer, but no one is that brave in congress…
Charlie
So, closing loopholes and allowing a tax cut to expire as designed is theft. Does that mean that dramatically cutting services to those who desperately need them in order to maintain historically low tax rates for the top margin is the charity?
Malcolm Robertson: “I realize that modern liberals believe government to be the source of all wealth, but tax cuts actually increase revenue.”
Nope, sorry, not true, although it’s been told often enough that lots of people apparently believe it. A 2006 (during W’s administration) Treasury Department report, which documented the revenue effects of every major tax law passed since 1940 “found that laws that lowered taxes produced declines in revenues, and that laws that increased taxes produced increases in tax revenues. This undermines claims that tax cuts can actually increase government revenues more than they would have increased otherwise.” (Source: Politifact.com)
I think the opening lyrics from “Living On The Edge” by Areosmith fit the mood of the discussion.
There’s somethin’ wrong with the world today
I don’t know what it is
Something’s wrong with our eyes
We’re seeing things in a different way
And God knows it ain’t His
It sure ain’t no surprise
We’re livin’ on the edge
We’re livin’ on the edge
We’re livin’ on the edge
We’re livin’ on the edge
There’s somethin’ wrong with the world today
The light bulb’s gettin’ dim
There’s meltdown in the sky
If you can judge a wise man
By the color of his skin
Then mister you’re a better man that I
I honestly think two things are at work here: the GOP is so hëll bent on making sure that Obama does NOT get a second term that the tea party will drive the country right over the edge.Second I think at its basic core that its because Mr. Obama is black. Some people may not admit it but I think racisim is a THE driving force behind this. Look at the rise of the Tea Party and go back at look at the signs at some of the rallies. The people who support the tea party are what I call “salt of the earth” kind of people. They are not educated (high school diploma or GED), they watch Fox News or they get their “news” from talk radio (Rush Limbaugh or Sean Hannity) and no other sources. Why do I think this? I use my very own family as an example. I come from a small town north of Nashville, Tennessee with a population of 30,000. Most of the people in my family only have a high school education and are “salt of the earth” type people. I am a rarity in my immediate family. I have 2 college degrees and I am going back to school for a certification to help get a better job (I was laid off from my last job in Feb of this year) and I plan on taking the LSAT later this year for a possiblity of going to law school. If that doesnt pan out then its on to school for my masters program. I am by nature liberal-moderate and I get my information from different news sources (NPR, MSNBC,CNN, USA Today, Huffington Post etc..) The commen “complaint” that I hear from own “family” is that they dont like Obama because he is black. When I ask them about ok what his policy on (insert policy here) it ALLWAYS goes back to him being in their own words a “ņìggër cant be trusted but I do like Sarah Palin and I can vote for her”. I dont claim or talk to my family if i dont have too. Only once a year at family re-unions. I am curious to see what the rest of you think.
Please, Michael, get a clue!
That characterization of Tea Partiers as racist, lower class white trash is just as much a myth as the tooth fairy! While I have no doubt that there are some who are, there are just as many like myself, with a MS in engineering, a wife that is an accountant, whose family was active in civil rights in the 60’s that just flat out believe you can’t spend yourself out of a recession. People are fed up with the nanny state, and want to get back to being America again, even if we have to wreck it first… 😉
Charlie
You wrote (in a post with no reply thingy below it): “The Dems seem to want to demonize the wealthy, or the ‘big’ corporations, so that they can steal their money, but in reality, they want to steal EVERYONE’S money.”
Why are the GOP/Tea Party entitled to decide what EVERYONE’S tax money goes towards? While, if the Dems do it, it’s “stealing?” There are wealthy liberals among the Hollywood/entertainer types. People like Linda Bloodworth-Thomason, Martin Sheen, Rob Reiner, Susan Sarandon, the late Paul Newman, Steven Weber, Alecia Beth Moore (aka Pink), Sean Penn, the late Carroll O’Connor, Larry Hagman, etc. Steven Spielberg was listed as one of the “400 Richest People In America” – Forbes 2005 – with a net worth of about 2.7 billion. He tends to support the Democratic party (Particularly, the Clintons). Steven’s good pal, George Lucas, (also one of the 400 richest) supported Barack Obama’s Presidential run.
Some of the taxes that they pay are going for things that they don’t support, things that they consider wasteful. So in the spirit of fair-mindedness it isn’t just the right wingers who are paying for the welfare programs. Both sides pay taxes. The right complain about some of their tax money being used for welfare. While a common complaint of the left might be that some of their tax money is used to fund unwinnable wars that kill people.
So to reiterate... Both sides pay taxes. Both sides have some of their taxes go to things that they support. Both sides have some of their taxes go to things that they don’t support. Yet, some people on the right are demanding that only THEY have the right to decide what EVERYONE’S taxes goes towards. That people on the left aren’t entitled to have any say in it. That isn’t a democracy. That’s a dictatorship.
One question: what will happen in the world if the United States default on their debt? Well, in addition to yet another market crash (which seem to happen as often as DC changes its continuity), there’s a real risk that other countries could think: “The US did it, why don’t we”, and start refusing to pay their debts as well. And as each country is indebted to at least one other, the domino fall won’t be pretty to watch, because countries depend on the debts that they are owed to pay for the debt they owe.
Worst thing that could happen, every lender country could decide to act militarily to recover what is owed to them (yes, I’m looking at you, China!) And all that because some morons want to make a political point.
Well, apparently both groups of poo-flinging monkeys are finally close to a deal this morning. And the ‘basic framework’ looks like it’ll be a joke of a solution in the end: no tax increases, raise the debt ceiling in two stages, etc, etc…
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“The way this deal is shaped, Congress can avoid BOTH the tax and entitlement fights until 2013,” NBC News’ Chuck Todd said in a tweet.”
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Because that’s what America needs: Congress avoiding real problems like America’s debt and long-term deficit problems.
Works for me. So long as the TP GOP are running the House, nothing sane will ever be proposed.
Except there’s a very real chance it WON’T work for you, Sasha. We have real problems. they deserve serious debate and solutions. That you would prefer putting off our problems until the situation becomes truly dire because you would prefer demonizing people who, whatever you think of them, at least are trying to establish some fiscal sanity for the U.S. and are saying kicking the can down the road isn’t good enough anymore…well, your arguments and logic are usually better than that.
Forgive me for being flip, but I’m just calling it as I see it.
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I have no desire to put things off until they are on the verge of blowing up. (I’ve frequently learned the hard way that procrastination rarely the best way to deal with things.) However, it is impossible to find responsible solutions to serious problems so long as an utterly unserious and irresponsible political faction is part of the equation — a faction that has proven itself willing to intentionally blow things up in the name ideology, rather out of a real desire to fix things.
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I don’t see the TPs mellowing out anytime soon. Frankly, now that they’ve learned that they can extort an agenda and get away with it, expect the crazy to be turned up to 12 in October when next year’s budget needs to be addressed.
Yep, they gave in to the little toddler’s tantrum once, so expect the TP to get even nuttier.