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Tea Party Fiddles as the U.S. Prepares to Burn

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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.”

Yes, there are some Democrats who are opposed to even looking at entitlement programs. And President Obama has been stung by media and activists on the Left for being willing to compromise his own beliefs on social programs to meet the Right halfway. But there is nowhere the amount of intransigence among Democrats as there is among Repubicans, many of whom are, after all, locked into Grover Norquist‘s “no tax increases, no way, no how” pledge.

Most Democrats believe that the best thing would be to detach the debt ceiling limit from deficit reduction. I agree with that; the president would agree with that. But it’s just not going to happen. It would never get through the my-way-or-the-highway Tea Partiers in the House of Representatives. So, to avoid the default day of August 2, most Democrats in the House and Senate are willing to hold their noses and compromise. Note, I said “compromise,” a word seemingly absent from the lexicon of House Republicans these days.

I’m no happier about the “gang of six” plan to cut more than $3 trillion, including Democratic sacred cows, than are fellow left-leaners on Daily Kos and Huffington Post. But the Republicans (and the Tea Party) won big in November, and there are consequences to elections.

I hate the idea that we have to give in to extortion. I hate the idea that we have to compromise on things so fundamental to our side. But these are the cards we have. And even the incredibly Conservative Gang of Six plan may not have the votes in the House, given the Cantor/Bachmann/Walsh faction. The Democrats have crossed ideological line after line in an attempt to compromise and find common ground. But when the Right won’t compromise at all (and increasing the debt limit isn’t a compromise, it’s a Constitutional obligation to pay our bills), there is little left to do.

The crazies on the Right are willing to hold the U.S. economy hostage, perfectly willing to put the full faith and credit of the U.S. in jeopardy, while they hold their breaths and refuse to listen to anything but themselves (and guru Norquist). They make Ronald Reagan look like a flaming liberal.

So time tick-tocks down day by day. Moody’s threatens to downgrade our credit—and the credit of several states. But the date isn’t real. It’s smoke and mirrors—the Tea Party says. So they’re willing to fiddle and let the U.S. burn.

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About Barbara Barnett

Barbara Barnett is Publisher/Executive Editor of Blogcritics, (blogcritics.org). Her Bram Stoker Award-nominated novel, called "Anne Rice meets Michael Crichton," The Apothecary's Curse The Apothecary's Curse is now out from Pyr, an imprint of Prometheus Books. Her book on the TV series House, M.D., Chasing Zebras is a quintessential guide to the themes, characters and episodes of the hit show. Barnett is an accomplished speaker, an annual favorite at MENSA's HalloWEEM convention, where she has spoken to standing room crowds on subjects as diverse as "The Byronic Hero in Pop Culture," "The Many Faces of Sherlock Holmes," "The Hidden History of Science Fiction," and "Our Passion for Disaster (Movies)."
  • Baronius

    Roger, he was talking about ’08, so I assume he meant no bailouts. Let the market revalue the debt. Let financial companies rise or fall based on their balance sheets (and let’s face it, GM and Chrysler were big financial companies.) The companies would have been shuffled around or restructured, and some wouldn’t have survived, but it would have all been above-board.

    Instead, we saved or abandoned companies at random, sucked money out of the debt market (via government) to put into the debt market (via corporations), and created a credit paralysis. Well, maybe we would have had a credit paralysis if we hadn’t acted. Maybe. Maybe we’d have had skyrocketing unemployment. But we wouldn’t have had ballooning federal debt and impending inflation.

    One more maybe, or in this case a probably: we’d be done with the recession. We’d have pulled off the bandaid quickly and moved on.

    I’m pretty sure that things would have been smoother and quicker. They definitely would have been more just, and resulted in lower federal debt. But I recognize that I can’t say exactly what would have happened, (only that my worst predictions of what did happen came true). Contessa, on the other hand, spoke with the fervor and certainty when someone questioned her story line. That’s the opposite of an analytical understanding, and it’s indicative of the way people have bought into the President’s narrative about ’08.

  • #71

    Good clip, Baronius. But what exactly does he mean by “free enterprise solution”?

  • Arch Conservative

    I saw that interview Baronius. Contessa Brewer is nothing but a Kool AId drinking bobblehead spouting left wing talking points.

    If I was Mel Brooks I would have asked her if she had a degree in economics and when she said no I would have said “well then you have something in common with Barack Obama.”

  • Hence the reason I think it might actually be a good idea to default after all.

    “Except that it puts out of work thousands of people all at once.”

    So does selling the parks and letting private employees do the same thing.

    “…who really cares if the EPA is no longer protecting the environment…”

    What incentive do they have to protect anything they themselves do not already own?

    “…FDA is no longer protecting our food, right?”

    Because food and drug companies would totally profit from killing their own customers. That sounds likely.

    “And the banks. They don’t need regulators either, they have our best interests at heart, don’t they?”

    Under a market-based set up they would. Under the system we have now in which the FDIC writes a blank check to banks for making bad loans and the Federal Reserve is permitted to engage in the equivalent of legal counterfeit, the situation is VERY different indeed.

    “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.”

    By all means, if you can get away with not being forced to assist people you think are unworthy of that help then do so when you get the chance.

    “Because, you know, government? Who needs it.”

    Indeed, when non-coercive alternatives exist, why support it?

  • I’ve just posted about the President’s dramatic press conference:
    President Obama: “The American People are Fed Up” on Blogcritics.

  • I don’t know if others on here are watching the additional drama going on in Washington this afternoon/evening. I despise Boehner and Cantor and their disrespect for the president. They can go to hell. They are worthless villains and cowardly assholes. They deserve to lose this fight, and the next several elections for their irresponsibility.

  • Baronius

    Arch, did you see the MSNBC interview with Mo Brooks? Contessa Brewer recites the liberal talking points, and gets quite passionate when Brooks questions the wisdom of the stimulus – and Brooks slams the door on her (not rudely, either).

    I’m listening to this interview again, and while I haven’t been reciting “talking points” the last few days, I realize that what this guy said has been bouncing around in my brain. He’s so right on the money.

  • Baronius

    Tommy – I’m not seeing a big difference between “evil” and “haters of truth who do reprehensible things”. Either way, it’s a caricature and contributes nothing to the political discussion. It reduces your credibility and inhibits your ability to understand your opponents.

  • Arch Conservative

    “That is, unless you bear in mind that if the economy takes a real nosedive, the Republicans might actually stand a chance of winning the White House in 2012.”

    Unemployment is at 9.2% now. It was when 7.6% Obama was elected. Despite the proclomation from Obama’s court jester, “Nobody messes with Joe” Biden, that the rate wouldn’t exceed 8%, it has and then some.

    I know. It’s all Bush’s fault. Nothing negative that’s happened since 2000 is Obama’s fault or since 2006 when the Dems controlled congress is the Dem’s fault.

    That extremely insightful analysis aside, I’d say that if things are as they are now on election day in 2012, the GOP have a very good chance of beating the Obamessiah.

  • Glenn Contrarian

    And Baronius –

    To be sure, the Republicans aren’t always this way. In retrospect, Bush 41 wasn’t that bad – and he did go against dogma and raise taxes and slash defense spending. He had courage…as did Eisenhower. There’s been quite a few Republicans over the years who’ve shown courage and even humility.

    But today’s Republicans have neither. That’s why they will NOT do what is necessary to fix the economy, for to do so would cause real harm to the future of their party.

  • Glenn Contrarian

    Baronius –

    Would the Republicans do their utmost to help the economy recover even with the full knowledge that said recovery would ensure the reelection of Obama? Would they? Really? Remember how the mid-term elections were all about jobs? How many jobs bills has the Republican House submitted since they took power early this year? Zero.

    The Republicans remember very well what happened to their political fortunes after FDR took over from Hoover. They don’t want to be minimized again. And let’s not forget that the Republicans DID welcome the racist whites of the South as part of their very successful Southern Strategy. That, sir, was NOT a decision of “right or wrong”, but of “what keeps us in power”.

    So, um, YES, Baronius, the Republicans WOULD refrain from helping America to recover economically, if they felt that such was the best way back to the White House. Why do you think they voted down health care coverage for 9/11 responders that would have been paid for by taking away the tax loopholes that benefited corporations that were outsourcing jobs overseas?

    “It’s all about power”, my neo-con friend said…and he was right. At least for the Republicans, he was right. And I suggest you apply as much cynicism against your own fellow conservatives as you do against the Democrats.

  • The phony part, incidentally, is their bogus budget which would necessitate raising the debt ceiling.


  • You’re right, my dear Cardinal Baronius. Neither did we say Republicans are evil. They may hate the truth and take delusional stands, but they are not evil. However, their congressional actions are reprehensible at best and just plain phony at worst.


  • Baronius

    Tommy and Glenn, did you ever think that if the Republicans are really fish, they’d be secretly trying to destroy the government to inaugurate a new Empire of the Fish?

    The thing is, they’re not fish. They’re also not evil conspiracists trying to destroy the economy. Just because you disagree with them doesn’t make them evil.

  • I Concur.

  • Glenn Contrarian

    Clavos –

    I agree.

  • Clavos

    I still say we should just abolish the “debt ceiling.” It’s meaningless.

  • Glenn Contrarian

    And who is it that refuses to raise the debt ceiling unless they have everything their way? The Republicans.

  • In which case, Glenn, the GOP objective would be to tank the economy on purpose because it is the only thing they have.


  • Glenn Contrarian

    Tommy –

    “Default is not an option”

    That is, unless you bear in mind that if the economy takes a real nosedive, the Republicans might actually stand a chance of winning the White House in 2012. That might sound too cynical by half…but I also remember a certain “Southern Strategy” in which the Republicans were willing to welcome the Southern white racists in order to stay in power.

  • Christopher is spot on with his analogy. I would add that argument for the sake of argument here and in Congress does not advance a solution. The GO6 plan does.

    Clavos’ questioning the debt ceiling is a position that FDR took in 1940. Having not been challenged in court and being of arguable utilitarian value leads me to conclude that the debate is contrived. Moody’s agrees. However, Moody’s also rates our bonds. So contrived as it may be, default is not an option.

    The President, the country and world business know that. Argument about it is futile.


  • Glenn Contrarian

    Baronius #53 –

    Have you seen any of the BC liberals decry the cuts proposed? Perhaps, but not to any great extent. I know I haven’t, because I readily acknowledge that because of the end of the baby boom, the number of people supporting the number of retirees may not be sustainable.

    Is that not a Republican talking point? I don’t disagree with it! I think the point is blown way out of proportion…but enough of it is based on fact and obvious trends that we would be foolish to ignore. The major problem with the Republican efforts in the cuts is that they’re wanting to slash funding to our science and R&D infrastructure, and that is foolish in the extreme.

    But what I DO disagree with is the Republican intransigence when Obama proposes to close some corporate loopholes and end some corporate welfare. The ratio was something like 83% spending cuts compared to 17% increased revenue. Why should we continue to give Exxon billions while at the same time we’re slashing Medicaid for the disabled?

    That makes no sense whatsoever…but that’s what the Republicans want, and are willing to drag us into default in order to have it their way.

    That’s not right, Baronius.

  • Baronius

    Chris – I mention it only because I made the point earlier (#20) about how the US debt is crowding out the debt market. Yes, we’re a good solid investment, so it’s not like people would be gambling all their money on Greece if we weren’t issuing debt, but we are tying up money that would be invested elsewhere.

  • Glenn Contrarian

    Handy –

    I agree strongly with your #47. It’s just that – no offense – you read my statistic wrong. It wasn’t taxes v. GDP, but taxes v. total taxpayer income.

  • Baronius

    Oh, comment #46 was totally meant to be exasperating. No denying that. But if I’d said “that’s not what you said the first time” it would have been just as irritating. I could spend a month trying to find a way to say it that wouldn’t have come off obnoxious. “I told you so” is always obnoxious. But your statement that we’re not increasing our debt was just so totally misleading that I had to say something.

    Of course we’re going to be increasing our debt load. You know that; we all know that. Republicans are willing to do so, in exchange for some institutional reforms that will prevent us from running up even more debt than that.

    As for the timing of the confrontation, Boehner and the gang have been in charge for about half a year, and have been trying to get some kind of budget deal from the get-go. You can’t blame them for not doing it sooner, because they were trying to do it sooner. You can’t blame them for putting it off until the election, because there’s always a House and Senate election within two years, and they weren’t in power in 2009-2010. As for blaming them for not putting it off beyond 2012, how would that count as *not* playing politics? You never explain that. Putting off reform because it’s politically awkward is a political play, but it’s what you repeatedly champion.

  • Baronius, that isn’t significant, it is the debt to gdp that matters. It’s like being overweight, it isn’t who weighs the most, it is who is the most obese.

  • #46: If you are really not trying to exasperate me, your attempts are failing. You in fact repeatedly go out of your way with the sole aim of being exasperating toward anyone/everyone you argue with. It’s a bad habit.

  • And the main reason the world buys so much of our debt, and on such favorable terms, is that we are so far considered a good risk. That could go out the window in a hurry, just because of this stupid pointless fight in DC.

  • Baronius

    Christopher – In terms of debt-to-GDP, yes. In terms of total debt, the US is #1.

  • According to this article on one of my favourite sites, Business Insider, it is actually a myth that China owns a huge amount of American debt. It is actually only 8% and the USA isn’t anywhere near being one of the most indebted countries, not even making the Top 15, as the link at the bottom of this article will show.

  • Glenn, I wasn’t really trying to prove you wrong. It’s just that some of our current problems will be automatically eased when the economy finally begins growing at a normal rate. Tax revenues will go up, the deficit will go down. This is part of what happened in the mid to late 90s.

  • Baronius

    Handy – Thank you for admitting that what you said was wrong.

  • #40 – Ridiculous. Do you ever read a newspaper?

    Take a look at this CNN Money article, which explains it better than I can.

    Because the government takes in $118 billion less than it spends every month, the debt goes steadily up, with or without additional new spending. The $2.4 trillion is what Treasury estimates is needed to get past the election next year. [That would be 20 months @ $118 billion per month; I don’t know for sure if that was the calculation used.]

    It’s not based on new spending plans! And you know it! Or you should know it.

    I agree — almost everyone agrees! — that we need to reverse the deficit spending trend. But if you shift a car going 50 mph into reverse suddenly, you could cause considerable damage.

  • Baronius

    YR GDP %in %out sur/def
    2010est 14,623.9 14.8 25.4 -10.6
    2011est 15,299.0 16.8 25.1 -8.3
    2012est 16,203.3 18.1 23.2 -5.1


  • Baronius

    Speaking of Glenn and errors, Glenn made the following statement: “That will really hurt the economy as a whole…and some influential Republicans know this…and relish the thought since a bad economy might mean a Republican victory in 2012.” I assume that Glenn meant that the article supported the idea that the economy would be hurt by a default, and that Republicans would benefit from the economic hurt. The article says the opposite.

    Point One: “Do not believe the doom and gloom. Wise decisions are never made when premised on fear.”

    Point Two: “Are you willing to lose to advance freedom?”

    Read the article’s second-last paragraph:

    House Republicans, this is a time for choosing: Do you choose to be more courageous than the Democrats who were willing to risk defeat to advance socialism? Is keeping your job more important to you than saving the country? If so, the odds are you will both lose your job and lose your country.

    (The comment about losing their jobs, by the way, refers not to the economy but to political failure.)

  • Glenn Contrarian

    Baronius –

    You just cited some statistics and made some partisan non sequiturs. I pointed out that the first statistic was wrong; Handy pointed out that the second one was misleading; I don’t know what the third one was supposed to address, but it wasn’t anything in the article or thread that I can figure.

    1 – Where did you read that those particular estimates are based on a 5-6% growth rate? I see nothing indicating such an assumption.

    2 – Handy misread it, and it was not at all misleading. As I pointed out in comment #31, the statistic is NOT a matter of the total amount of revenue as a percentage of GDP, but of taxes being a lower percentage of all personal income.

    3 – I included the third statistic with the first two to strengthen my argument that the conservative anti-tax claims are, frankly, false…and if you’ll check, the protection of corporate welfare and corporate tax loopholes is most of what the Republicans are trying to do in their proposals to raise the debt ceiling.

    My point stands. The Republican anti-tax arguments are false.

  • Baronius

    Handy, just for the record, I’m not trying to exasperate you, and I’m not trying to dodge anything. It’s just that passion is not a substitute for accuracy, and we need accuracy if we’re going to talk about effective solutions. I have no doubt that your heart is in the right place. Ditto with Barbara. But she cites the two stupidest people I’ve ever heard of, mischaracterizes the both the default and the August 2nd deadline, and concludes that Republicans are to blame. If we’re to have an honest discussion about the issues, we should at least note that some of her facts are wrong and some of her opinions do not follow from the facts.

  • Baronius

    Handy, I haven’t heard if anyone’s talking about raising the debt limit to cover current commitments. Like I said, the only number I’ve heard would allow for more than $2T of increased debt over and above current commitments.

  • Baronius

    Glenn, it’s not right to compare the data from 2012 forward, because that data is a projection. As I pointed out, the projections are based on 5-6% growth over the next two years, higher than the growth projections that Tim Pawlenty was laughed off the stage for suggesting. As for your particular point, Glenn, you didn’t seem to have one. You just cited some statistics and made some partisan non sequiturs. I pointed out that the first statistic was wrong; Handy pointed out that the second one was misleading; I don’t know what the third one was supposed to address, but it wasn’t anything in the article or thread that I can figure.

  • John Lake

    I still cling to the knowledge (perhaps hope) that at the last moment, at or near the beginning of “overtime play”, our esteemed representatives will pass the plan that has been secretly harbored in the depths of their back pockets all along.
    Incidentally I might take this opportunity to mention that China, and several other of those to whom we are hopelessly indebted, will no longer take gold in lieu of more (less?) tangible currency. So, gold buyers beware.
    The glass darkens.

  • Glenn Contrarian

    Clavos –

    A strong argument can be made that under the fourteenth amendment, a debt ceiling might well be considered unconstitutional. I’m sure you’ve already heard that argument…and I’m hoping that Obama will use exactly that.

    But the whole argument on the debt ceiling is a strawman that has been used by both sides including by Obama himself as a senator…but never have we been so close to having our national credit rating slashed because of such obstructionism. If we default, Clavos, it’s going to hurt your business significantly too, since the interest rates of the banks will jump in response.

    That will really hurt the economy as a whole…and some influential Republicans know this…and relish the thought since a bad economy might mean a Republican victory in 2012.

  • The debt limit has been routinely raised dozens of times in the past. It’s not just that “handy says” it’s only about money already spent; that is the objective truth.

    The argument in Washington [now and seemingly forevermore] is over how much [and when] to cut spending/raise revenue. Not how much to raise spending.

    If failing to raise the limit does cause bond market chaos, will that finally convince you that you’re focusing on the wrong argument? Jeez.

  • Glenn Contrarian

    I should have mentioned that the 1981 deficit was from Carter, and that the 2009 deficit was from Bush 43. That changes the picture somewhat.

  • Clavos

    If we’re always going to raise the debt ceiling when we approach it (and we always have), why even have a debt ceiling, for a ceiling it is not under those circumstances.

    Why have any limits on government spending, they’re ignored anyway? Let the congressshits spend all they want; they do it anyway.

    We can always keep borrowing money from the Chinese; they’re surpassing us already and will one day own us altogether — they already have a better handle on capitalism than we do.

  • Glenn Contrarian

    Baronius –

    Okay, I checked out your reference, and apparently my reference screwed things up somewhat. Here’s the short skinny on what your reference shows:

    Reagan’s deficit-to-GDP ratio 1981-1989:

    1981 -2.6
    1982 -4.0
    1983 -6.0
    1984 -4.8
    1985 -5.1
    1986 -5.0
    1987 -3.2
    1988 -3.1
    1989 -2.8

    And Obama’s deficit-to-GDP ratio, 2009-2015 (est.):

    2009 -9.9
    2010 -10.6
    2011 -8.3
    2012 -5.1
    2013 -4.2
    2014 -3.9
    2015 -3.9

    My reference was wrong…but does the degree of their error disprove my overall point? No. Why? Because if you’ll look, beginning in 2012, Obama’s ratios are not significantly worse than Reagans…especially considering that the crap sandwich that Obama inherited in 2009 was orders of magnitude worse than what Reagan got when he took over. Furthermore, Reagan did NOT have to deal with the most obstructive Congress since the Civil War.

    My overall point stands. Our overall tax burden under Obama is less than under Eisenhower, Reagan, Nixon, Bush 41, or Bush 43, and our effective corporate tax rate is the second-lowest in the developed world.

    And here’s a really interesting USA Today site that tells you where your money’s going…and how little your overall tax burden has significantly lessened over the years in comparison to your overall paycheck.

  • Baronius

    Glenn, I was asking about the deficit-to-GDP ratio.

  • Glenn Contrarian

    Baronius –

    I got it from a USA Today article from last year:

    Federal, state and local income taxes consumed 9.2 percent of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis reports. That rate is far below the historic average of 12 percent for the last half-century. The overall tax burden hit bottom in December at 8.8 percent of income before rising slightly in the first three months of 2010.

    And for handy, you’re wrong.

    Why? The statistic is NOT a matter of the total amount of revenue as a percentage of GDP, but of taxes being a lower percentage of all personal income.

    Right now, the total tax burden – taxes as a percentage of income (and not GDP), remember – is about twenty-four percent less than its historical average.

  • Baronius

    “Baronius, no one, not the most liberal House Democrat or anyone else, is suggesting we should spend more or increase the debt.”

    The deal on the table, last I heard, involved an increase of $2.4T to the debt limit. I don’t know who proposed that number, or what period it’s anticipated to cover, just that that’s the only number I’ve heard. We might need $300B to finish out the fiscal year. The remainder allows for a potential increase to the debt beyond current obligations.

    I’m trying to phrase things exactly right so that you won’t accuse me of playing word games.

    You’ve said that the debt limit isn’t about future debt, only about paying past commitments. But an increase beyond what we’d need to pay past commitments can only serve the purpose of allowing us to make more commitments, ie increase the debt.

  • Fine, but agree with them or not, TARP, the stimulus, etc, were temporary, not permanent, additions to the budget.

  • Baronius

    No bias intended. I was addressing Glenn’s stat, and the chart was verging on (or careening past) the unreadable.

  • You conveniently fail to include projections for FY13 and following, in which the percentage drops very significantly.

  • Baronius

    Table 1.2 – Summary of Receipts, Outlays, and Surpluses or Deficits (-) as Percentages of GDP: 1930-2015:

    YR GDP %in %out sur/def
    1980 2,724.2 19.0 21.7 -2.7
    1981 3,057.0 19.6 22.2 -2.6
    1982 3,223.7 19.2 23.1 -4.0
    1983 3,440.7 17.5 23.5 -6.0
    1984 3,844.4 17.3 22.2 -4.8
    1985 4,146.3 17.7 22.8 -5.1
    1986 4,403.9 17.5 22.5 -5.0
    1987 4,651.4 18.4 21.6 -3.2
    1988 5,008.5 18.2 21.3 -3.1
    1989 5,399.5 18.4 21.2 -2.8
    2008 14,439.0 17.5 20.7 -3.2
    2009 14,237.2 14.8 24.7 -9.9
    2010est 14,623.9 14.8 25.4 -10.6
    2011est 15,299.0 16.8 25.1 -8.3
    2012est 16,203.3 18.1 23.2 -5.1

    I hate the way tables come out on BC, but here’s the gist. We’ve got a 2011 projection of an 8.3% deficit-to-GDP ratio, and that’s assuming a 5% growth GDP in the past year. Assuming a 6% growth rate for 2012, the deficit-to-GDP ratio will be 5.1%. Reagan had one year of 6.0%, one of 5.1%, and one of 5.0%.

  • 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.

  • 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.

  • 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.

  • Baronius

    Glenn – Where did you get that first stat? I checked the GPO site, and they say the opposite.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • 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

  • 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.


  • 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.

  • 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.

  • 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.

  • 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.

  • 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.

  • Colin–also known as “inconvenient truths”

  • 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.

  • 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.


  • 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.

  • 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.

  • 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.

  • 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.