The closer we get to August 2, the more I think that the voluntary crisis called the “debt ceiling debate” will end badly. That’s something I would not have considered last week, believing, naively perhaps, that even the Tea Party intransigents would compromise enough to rescue the U.S. from potential economic disaster.
“We will not raise the debt ceiling.” Full stop. That is their cry, and no more vociferously than from poster girl/presidential candidate Representative Michele Bachmann (R-MN) who has been using her intransigence to underpin campaign
ads.
The thing that worries me is not so much ideology (which worries me, but can usually be overcome in the national interest), but that some of these guys on the Right don’t even believe that the default date is actually real.
If they don’t believe the date is actual, there is little at stake in missing it. Ergo, there is no motivation to do anything at all, and no urge to compromise even one teeny, tiny baby step. It’s almost as if they are daring the date, daring the experts—hell, even daring the bond rating agencies. Do they want to prove to themselves that the date is bogus?
The two stupidest reasons I've heard from the Right to explain the August 2nd date are 1) to go a day longer would infringe on President Obama’s birthday party, and 2) Ramadan begins, and would tie up the president, since, of course, he’s a Muslim. Yeah, seriously. And, somehow, the president has used his superhuman powers (or he stole Dumbledore’s wand) to persuade economists, Moody’s, and Standard and Poors that the date is really the drop-dead date before a calamitous economic catastrophe ensues.
So this is the mentality which the president and the Democrats in Congress are up against. Add to that the Tea Party’s misguided notion that they have some sort of economic and social mandate from The American People. (All they need to do is read the polls to understand just how misguided they are.)
What emerges is a perverse sense of compromise that amounts to “my way or the highway.” They are “willing” to allow the president to raise the debt ceiling—something sane people know is mandatory, and allows us to pay for things already purchased—in exchange for adopting their agenda. To me, this is more extortion than compromise. It says: “We’ll let you do what you have to do to ensure the economic safety of this country, if you do everything we say.”
Article comments
— go to most recent comments1 - jonolan
From what I can research, the Aug 2 deadline is just something that Geithner pulled out of his ass. Actually, it's the third or fourth such drop dead date he's put forth and then moved during the course of this debacle.
As for Moody's, they've been threatening to downgrade the US for a while now over the deficit so this is no shock.
As for you views on Americans - This is what you Liberals are up against now that we've finally got principled governance in place in at least one party.
We Americans, unlike Liberals, do not willingly compromise our principles.
2 - barbara barnett
jonolan--I'd love to know you're research sources. And actually what you say is simply not true. Full Stop.
You "Americans?" WOW. So, anyone who doesn't agree with you isn't? Liberals aren't Americans? Lovely.
3 - handyguy
If Boehner had the courage to separate himself from the Tea Party wing of his party, at least on this one issue, he could easily get a "clean" debt limit vote, with 150 or more Dems and maybe even more than 100 GOP votes.
[He probably worries that such a vote would put his speakership at risk. If he has no more influence over his caucus than he has demonstrated so far, his speakership deserves to be at risk.]
The tax/spending debate will continue with the FY12 and FY13 budgets, which is where it belongs.
Stop the insanity.
4 - barbara barnett
Handyguy--if only. I think Boehner needs a little courage right now. Yes, it could cost him the speakership, but look at the dems who are risking their own liberal street cred.
5 - Tommy Mack
No one has asked it yet of House Republican Representatives, so I will. What does not raising the debt ceiling do for your constituency?
Eric Cantor, the House Majority leader by title and fancy office, represents the 7th District of Virginia that went Republican in 1973. It is middle-class, Richmond suburbia. He has been reelected four times. He seems to believe that he has a safe seat. Although he aspires to be the next Speaker of the House, should it remain Republican, he is the chair apparent of the GOP tea party wing. The Honorable Mr. Cantor appears to believe that his constituents are members of the House Representatives more than the residents of Virginia’s 7th District.
Michele Bachmann represents the 6th District of Minnesota, middle-class Twin Cities and St. Cloud suburbia, and is the first Republican woman to be elected to congress from Minnesota. She is the founder of the Tea Party Caucus in congress. Serving since 2006, she has been reelected twice. Her district changes parties every two to three elections. She seems to believe that she has a safe seat like Mr. Cantor. She aspires to become President of the United States, should she endure the primaries. Like Mr. Cantor, Mrs. Bachmann appears to believe that her constituents are also members of congress more than the residents of Minnesota’s 6th District.
The Speaker and the Republican Party has demonstrated a policy that puts ideology ahead of the representation of their constituents. Independents who resuscitated the GOP in the last election must wonder who represents them because it certainly isn’t the people they sent to congress.
Tommy
6 - Colin M.
There is a history of the extremists simply denying realities they don't like and which make their positions undefendable. The debt ceiling, the usefulness of torture, evolution. You know, reality.
7 - barbara barnett
Colin--also known as "inconvenient truths"
8 - Baronius
"The two stupidest reasons I've heard from the Right to explain the August 2nd date..."
I haven't heard either of those. What I've heard is that we've already hit the cap, and Treasury is currently shuffling around money to keep the books balanced, and that they'll still be shuffling around money after the 2nd, but it'll be tougher. There's no reason that there would be a default on the 2nd without a deal.
9 - barbara barnett
Baronius--yup. Heard 'em with my own ears!
Fact is that once we're in August there will not be enough coming into the treasury to meet the Aug. obligations. Something(s) will go unpaid. That's actually unconstitutional in itself, since the money has been appropriated and obligatory. But so is defaulting. So either way. Things will close, people will be furloughed, services will not be rendered, checks won't be sent. Question is--which ones? Hope it's nothing that affects you personally.
10 - Baronius
Tommy - I'm sure that they both believe that they're doing the best thing for their constituents. Do you have a problem with them standing on principle, or a problem with the principle? Back in JFK's day, if a politician voted his conscience and lost office because of it, he'd be a profile in courage. We'd laud him for sticking to his principles. I'd bet that if this were, say, the health care debate, you'd be applauding candidates who stood their ground. I dunno. Maybe you wouldn't. But it seems like you could create a narrative that ascribes some good motives to Bachmann and Cantor.
11 - barbara barnett
Baronius--I am a huge fan of Bernie Sanders--he is one of my Congressional heroes and a man of great courage. He is standing on ideology in this fight. I believe he's wrong here.
They must compromise, but not give away the store to achieve what must be achieved to keep the economy even on the shaky ground upon which it still stands (and not keel over completely).
This debt is in large part due to the policies of the previous administration (directly and indirectly). It is tremendous chutzpa (with "ch" as in Bach, not chewy as Rep. Bachmann would pronounce it) for the Repubs to take this particular stand.
12 - Baronius
Barbara (#9) - You do raise a good point about defaulting. The term is being used too casually. The US will default on some payments around August 2nd, but not necessarily on loan payments. I'm not sure about the constitutional question, but there's nothing I can think of that would compel the US to continue payments on anything other than debt.
13 - Jet Gardner
It's simple-raise the damned debt ceiling-no attachments should be added, no far right-wing blackmailing people who depend on Social Security, no "deals". It's a stand-alone deal
Obama needs to say fuck you to them all and invoke the 14th amendment.
sheesh
14 - RJ Miller
I am not quite sure what to think of raising the debt ceiling at all. While I think bloated government is undesirable, maybe the author of the following has a point
15 - jonolan
The constitutional issue is a Liberal straw man, and a particularly offensive one since they should never be citing America's constitution for anything.
The constitution demands that the government consider all legally incurred debts to be valid, not that it pay them on time if it cannot by law or reality do so.
The constitution does not demand that America borrow more money to pay our existing debt.
Of course I'm not completely sure if kiting checks was even a phenomenon back them so this situation might not have occurred to them.
16 - barbara barnett
RJ--yeah. So the government pays bondholders, Social, Security, Medicare and Medicaid. The we let all the agencies, parks, etc. gather moss. Who cares, right? Except that it puts out of work thousands of people all at once. So, their states don't get income taxes from them, they don't buy stuff, etc. But eh, so the economy takes a little hit? Right, RJ? No biggie.
Oh yeah, about those agencies: who really cares if the EPA is no longer protecting the environment, FDA is no longer protecting our food, right? Corporations are all responsible citizens and they'll take care of it, right? And the banks. They don't need regulators either, they have our best interests at heart, don't they?
Yeah. No one on your side wants federal agencies or federal help, I forgot. Next time a Red state is devastated by a hurricane or fire or tornados, maybe I'll withhold that part of my taxes earmarked to help out. Because, you know, government? Who needs it.
17 - Baritone
Barbara, I believe it was Romney who stated that Federal aide to victims of disasters was immoral and should be stopped.
Bar - Yeah, Bachmann stands on her principles. That's great. I applaud her for it. Of course her principles are idiotic. She's a fucking nut job, but a principled one. Remember, she's the one who claims that being gay is like being in prison, and her husband runs a clinic through which he claims he can "pray away the gay." So hallelujah!
The August 2nd date is only partially relevant. It provides some kind of target. It is likely that the carnage to the economy will begin over the next few days regardless.
I take this very personally. All of you idiot right wingers intent upon blocking the raising of the debt ceiling, if successful, may well be responsible for putting me out of business. If interest rates shoot skyward as predicted by many, my business will cease. We are on the brink of losing our house as it is. I have 25 years in a career that a bunch of idiot freshmen congressmen and women will destroy over their fucking principles through an act they obviously have no understanding of.
A few of the dim bulbs on the right have awakened to some degree. The Virginia governor who just days ago found no compelling reason at all to raise the debt ceiling, suddenly climbed on board when it was revealed that his state would be among the first to go into the dumpster along with the country. Now he's preaching a different tune.
I'm not sure which I find the most maddening among many right wingers: The stupidity, or the hypocracy. It's about even. Some even manage to be both supremely stupid and incredible hypocrites at the same time which is rather a feat, if one thinks about it. Hypocracy usually requires a modicum of intelligence, but some truly adept rightys have found a means to bridge that gap. Kudos!
And BTW jonolan, as Barbara noted, you have some hackneyed views about who is or isn't an American.
B
18 - handyguy
The bigger issue is not which checks are issued, but how the world bond markets react. If our credit rating is downgraded and interest rates shoot up, we're all screwed. This could happen even before Aug 2. Markets can get spooked, even if the reasons seem utterly unreasonable.
19 - Matt
We wont default on the 2nd, but as we move money around, it will lead to a default, as we can't pay everything, so in the end we default. It is like plugging a dyke with your fingers and toes in the end you run out. The reason they want a July 22nd was because of the affects on the economy, it is already harming us.
Losing the AAA rating, the affect on the dollar makes it worse, then we have Medvedev with is new global reserve currency ready to go into production.
Don't think it can't happen losing the global reserve. That makes repayment a lot harder, turning our 14 T into the equivalent burden of 25 T.
So if they allow a default then agree to a deal after the fact, the damage that is done to the economic position of the US is substantial.
As our allies dollars rises as ours fall and it affects their trade surplus even they will seek a break from the US dollar as a reserve currency, giving Russia and China support they could never believe.
The US never had to deal with a PRC as the second largest economy, India an economic power, Brazil etc.
Look how they tried to cut the US out of the Climate Change talks a decision affecting the globe being taken with out the US the world largest economy, the Tea Party want to smell the coffee.
At the moment they all say we are fiscally irresponsible after a default they will have evidence and support internationally to switch from the US dollar.
If we lose the status of the global reserve currency we are Greece.
So if they will agree to a deal after we have a default why not before and prevent that damage.
And during a time of war, our soldiers not getting paid, their families at home not getting paid.
20 - Baronius
Handy - If we keep increasing our debt, we're going to see interest rates shoot up anyway. And if interest rates are our main concern, why have we been printing so much money? I'm not saying that interest rates don't matter - they do - but let's stop playing games. We're endangering our credit rating in lots of ways. According to Standard and Poor's, they'll reconsider our credit rating if we don't make a debt limit deal, and also if we make one that doesn't address the medium- and long-term debt. So that's where we are.
It's just like the example of the gambler that I keep coming back to. He'll tell you that the problem is the $5K that he needs by tomorrow. You've got to tell him that the problem is his gambling. He'll say that he needs the money right away, but you'll reply that what he needs is to get his finances under control. A compulsive gambler may have to hit bottom and ruin the lives of his loved ones before he seeks help. Let's hope that we don't come to that in the US.
A side note - no one's talking about this, but we're carrying about 22% of the total sovereign debt worldwide. We're strangling off not just private investments (the stuff that creates jobs) but public investments in other countries (the stuff that prevents starvation and wars). The entire European Union has less debt than we do, leaving it with a better GDP/debt ratio. And that's not counting the $2T in US municipal debt.
21 - Glenn Contrarian
Baronius -
As I've pointed out (and as zero BC conservatives have refuted):
1 - Our deficit right now as a percentage of our GDP is LESS than what it was for half of Reagan's presidency.
2 - Our overall tax burden for the past two years under Obama is LESS than what it has been since Truman was president.
3 - Our corporate tax rate, nominally the second-highest among developed nations, is in reality the second-LOWEST when it comes to effective rate of taxation.
In other words, Baronius, America and America's businesses are paying significantly LESS than what they have been historically. There is NO reason - other than conservative dogma - that we cannot raise the taxes on the wealthy and on the corporations and balance our budget...which is precisely how it was done when Clinton was president.
But the Republicans will never agree to this. Why? Because if another Democratic president balances the budget as Clinton did, the Republicans will face a much harder time convincing the voters that they're better at managing taxpayer dollars. In other words, the Republicans have a vested interest in making sure that America's economy does NOT improve and in ensuring that Obama canNOT balance the budget.
If the Republicans want to have any hope of holding the White House in the near future, they MUST torpedo Obama's efforts to fix our economy and balance the budget.
22 - Baronius
Glenn - Where did you get that first stat? I checked the GPO site, and they say the opposite.
23 - handyguy
Glenn, before Baronius says it, I will: part of the reason tax revenues are a low percentage of GDP is the aftermath of the recession. When the economy picks up, the revenue picture will improve, even if Congress does nothing.
Baronius, no one, not the most liberal House Democrat or anyone else, is suggesting we should spend more or increase the debt.
The interest rate spikes that could be caused by a sudden drop in our credit reputation among global investors is a lot different from interest rate pressure caused by the Fed's actions at home [which are so far near zero]. I believe you know that, but your comment suggests otherwise.
24 - handyguy
And if you take a look at these lovely deficit charts, you’ll see that the deficit, after spiking the last two years mostly because of emergency measures to deal with the financial crisis and recession, is projected to fall to $600-$700 billion in FY14 and later. That’s if Congress does nothing! [Which means the Bush tax cuts would lapse.]
So the $400 billion per year in net cuts you have been deriding would reduce the deficit by more than half. Health spending [Medicare and Medicaid] would eventually send the deficit soaring again without a fix.
25 - handyguy
So [last point for now] why do these huge cuts have to happen right now or else? Only because the rightmost faction of the GOP sees a political opportunity. Any other explanation is disingenuous.