Tag: Default in 2011

[…] 4. The Congressional Budget Office estimates that in FY 2014 (which runs from October 2013 through September 2014), total federal income will be $3,042 billion and total spending will be $3,602 billion, a difference of $560 billion.

5. This is the amount of debt we need to issue to pay for everything in the budget, which means that if the debt limit isn’t raised, we need to immediately cut spending by $560 billion, or $46 billion per month.

6. That’s roughly the equivalent of wiping out the entire Defense Department; or wiping out two-thirds of Social Security; or wiping out all of Medicaid + all unemployment insurance + all food assistance + all veterans’ benefits.

Kevin Drum, excerpted from a longer “10 sentences about” piece on the debt ceiling breach.

He’s right, of course, but I think he also touches on exactly the sort of messaging that’s required here by the Democrats. Out there, every day, saying “why does the GOP want to eliminate the Defense Department?” until people just can’t stand to hear it anymore. Then you say it 10,000,000 more times. Then, when the lunatic wing of the GOP relents or is bypassed by some less pure version of democracy in the House than “the majority of the majority party rule,” you continue to say “why did they want to eliminate the Defense Department? Can we trust a party that would take away all veterans benefits over some sort of party ideological purity test?” You continue saying something like that for at least 20 years, after which it might start to sink in.

This doesn’t seem so hard to understand, but The Democrat still doesn’t seem to get it.

Republicans have very decidedly not agreed to any kind of tax reform that raises federal revenues. This is the whole crux of the debate. They have never agreed to anything other than revenue-neutral tax reform.

Kevin Drum, saying what should be printed in the maximum size possible, laminated in armor-strength plastic, and posted on the wall of every news agency large and small. Every single news outlet gets this simple, straightforward fact utterly and completely wrong every single time they venture here. Wishing hard and clapping louder will not make the GOP sensible. Neither will acting as though they want a “sensible” deal when they have made no such overtures, large or small.

Reporting this as though both parties are equally at fault is doing The Republic no favors.

Where’s the Urgency?

Henry J. Aaron provides must read stuff over at Brookings:

To see what the Boehner rule means, consider the following facts. Based on projections done last August by the Congressional Budget Office, the national debt will increase over the next decade by about $12 trillion under current law. To cut spending over the next decade by $12 trillion, it would be necessary to cut annual spending by an average of $1.2 trillion a year. Since total non-interest spending over that period will average $4 trillion a year under current law, about 30 percent of projected spending would have to be eliminated. Because big cuts are impossible next year or the year after, the required cuts toward the end of the decade would have to approach 50 percent to satisfy the Boehner rule. As it happens, no one in either party—and, most tellingly, none of those insisting on the dollar-of-cuts-for-a-dollar-of-increase-in-the-debt-ceiling trade-off—has indicated where spending cuts of even one half this amount should come from. Even so, they have declared that they will oppose any increase in the debt ceiling unless these terms are met. And they have the votes to make their commitment hold.

My only real complaint is calling any of these “rules” in the House rules. Hastert, Boehner, what-have-you: they have no force of law and only exist as a “rule” in the sense that washing one’s hands after using the toilet does. If one does so, one is following the rule. If not, well, uh not much really. The Boehner Affectation, or the Boehner Most Dangerous Strongly Held Opinion. Whatever, just not a “rule.”

But: yep. And the reason no one “has indicated where spending cuts of even one half this amount should come from”? Because they don’t give a shit about the deficit. This whole “crisis” was created and continues to exist as a useful cudgel to extract tax cuts for the rich and benefit cuts for the poor. Period, the end. Positive deficit impacts of said policy, be they large or small, are purely coincidental and entirely unintended.

Read the whole thing.

Where’s the Urgency?

There Is No GOP Budget Proposal

Can we please at least agree that vaguely worded letters sent to the President do not constitute a legislative proposal? Or did the CBO start scoring letters that are 90% vacuous talking points; add to that the fact that these very empty talking points were soundly crushed by plebiscite just weeks ago?

Likewise, slightly less vague details provided on background do not a serious proposal make. These details are provided on background precisely so they may be disavowed at any moment. This is not “Boehner’s Proposal.” It is bullshit. But, even then, the GOP proposes extracting from the backs of the poor, elderly, and infirm a dollar value less than half of what Obama attains by slightly inconveniencing the very rich. Apparently this fact was not worth noting, background or otherwise.

Our media entertainment complex finds none of this worth noting. Math is hard and so very boring, but can’t we at least admit the vacuity and shady sourcing of this “plan” when reporting it? Apparently not.

Dictionaria

Clip and save this section for use during fiscal “negotiations”:

Serious (ser’ ee uhs) adj. any of a group of proposals that immiserates large numbers of ordinary people, either immediately or in the future, via cuts to broad-based social welfare programs.

Unserious (un ser’ ee uhs) adj. any proposal that slightly inconveniences rich people via modest tax increases or annoys military contractors via small cuts to the Defense Department.

Dictionaria

Why am I optimistic? Because you can smell the winds

Chuck Schumer, Senator from New York, explaining why I am very glad not to be involved in or even be located near these “negotiations.”

We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction.

John Boehner, Speaker of the House of Representatives, tipping his hand. I’d say this is the first time you can see real fear of the status quo. More broadly, that doing nothing will fix most of the deficit over the near term by eliminating the Bush tax cuts and a few other money-sapping provisions. Were it deemed reasonably likely that Obama will win reelection in the fall, they’d quickly calculate that the only chance the GOP has for full extension of the Bush tax cuts is to force the issue before that happens. You do that by holding the full faith and credit of these United States hostage. Again. And the only way they get there is by reneging on their previous agreements and hope nobody remembers that they’re doing so. Nothing that has transpired in the past 20 years leads me to believe they are wrong on this count.
Sadly for them: they think this cunning scheme to yet again needlessly and recklessly and by choice yet again delivering the nation to the economic precipice has the benefit of being a big political winner for them. Sadly for the rest of us: you can only put this particular gun to the hostage’s head so many times before it gets fired. Maybe this time, maybe next. But soon.

The Republicans are serious budget reformers; the lady from Washington, doesn’t do budgets.

Grover Norquist, primary driver of conservative economic policy in the form of his idiotic anti-tax pledge. In every way that matters, this is who they are.
He’s referring to the second highest-ranking member, male or female, of the Senate Budget Committee, Senator Patty Murray. You stay classy, Grover.
Source: The New York Times

S&GOP

Ezra Klein:

My hunch is that S&P was making a political argument and felt the need to cast it as deficit arithmetic. Then, when their arithmetic proved wrong, they were left looking foolish. As it stands, you actually can’t coherently merge the first and second versions of S&P’s explanation of the downgrade. That should tell you something about how rigorous their framework is, even if doesn’t obviate the still-legitimate points they made about our political system.

I think Ezra is fundamentally right here. The problem is this: if S&P set out to make a political point, they did so in such a fumbling manner that the political message, the most important part, was utterly lost. The MSM has a fundamental inability to report on something negative relative to a single party. Obama offered at least four debt ceiling deals, including several that had previously been GOP deals. How was this reported? “Both parties unwilling to compromise; President unwilling to lead and/or deal”
S&P issues a report castigating GOP intransigence on revenues. Reported: “political system unable to deal with current crisis.”

If S&P truly intended to make a political point, the report itself needed to be called “The GOP’s Willful Destruction of The American Century” or “Political Nihilism and Today’s GOP: A Downgrade Story” and furthermore needed to be told through colorful pictures and in fewer than 50 words. There’s no way in hell a company like S&P is going to do this; they are fundamentally incapable of really making the political point that they seem to have set out to make, as such moves soon prove to be bad for business. (And don’t think for a moment the GOP will forget this slight. There will be GOP initiated investigations, damaging ones, into S&P at the first available opportunity). Therefore: you don’t do it at all unless you can back it up with hard numbers such that the conclusions are inescapable. Which they also couldn’t do. But that national embarrassment is a whole other post.
Assuming for the moment that they went there and made the political point utterly and inescapably explicit, even then, it would be hard to get the MSM to report it as such. They’d dodge with a “it’s all very complicated” or “let’s leave it there” or simply book only conservative guests and allow them to talk as long as they want to without challenge or correction. Above all else, they’d avoid any mention of what was actually written in the report. You know: pretty much what’s happened in the last several days.

Naturally, this all has to transpire alongside the slow-motion European financial collapse and its effect on global markets. Typically “USA über alles” reporting over-stresses the influence, if any, of the downgrade on global events. “Post hoc, ergo procter hoc motherfucker” may as well go on the Times masthead. People are stampeding for Treasuries!!! It must be the downgrade of that instrument’s backing that is causing them to do this!!! (Had the downgrade not occurred, at least FOXnews and maybe the broader media would have blamed the collapse in value on the Presidential birthday BBQ’s failure to durably impact jobs creation). The MSM response? Get some folks on to scream “I blame the Democrat and the dirty fucking hippies for this historic downgrade of the United States and the similarly timed collapse of the global markets. The only response is to slash the social safety net, cut taxes, and increase defense spending. Or a mandatory National Week of Constant Prayer. Whichever.” What other rational approach is even possible?“

This is why we fail.

Who’s To Blame?

Jay Bookman wants to know a few things:

Who rejected “the comprehensive fiscal consolidation program,” with cuts to entitlements accompanied by higher revenues, producing a debt reduction of $4 trillion, proposed by President Obama? That would have produced twice the debt reduction promised in the deal that was finally accepted.

Who rejected the very notion of compromise, making “the differences between political parties … extraordinarily difficult to bridge,” with one side announcing that only total capitulation by the other side would be accepted?

Who embraced the policy of political brinksmanship that pushed the country so perilously close to default? Who publicly embraced the threat of default as “a hostage that’s worth ransoming,” announcing that the tactic would be used every time the debt-ceiling issue arises from now on?

To hear any of these questions, much less any of their answers, one would be well advised not to even bother with the MSM. They are in full on “pox on both houses” mode. This is an entirely self-inflicted, politically motivated wound. Why won’t anyone ask the GOP why they thought it best to bring ‘em on?

Who’s To Blame?