Tag: Default in 2011

This Is Why

Standard and Poors to downgrade US credit rating:

A source says Republicans [steadfast refusal] to accept any tax increases as part of a larger [deficit] deal will be part of the reason cited [for the historic downgrade].

How do you imagine the radical Socialist Obama administration plans to respond on behalf of The Democrat?

[An administration] official says that S&P made a “serious mistake” in its analysis, “based on flawed math and assumptions,” so the Obama administration is pushing back.

This is why they fail.

This Is Why

Number Two

LA Times: “Investors are looking past the budget situation and realizing this is an austerity plan,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “We have an economy that’s struggling to stay afloat and we don’t have the ammunition to keep prodding it forward.”
Kevin Drum: Oh really? Now you tell us? There are really only two options here. (1) The Times is wrong. (2) The Times is right and America has the stupidest goddamn investors on the planet. For months they sat around cheering on the tea partiers and declaring solemnly that the federal budget was just like a household budget and we needed “real action” on the debt in order to build confidence in the economy. Then, suddenly, when they got it, they realized that what they really wanted wasn’t dumb slogans but actual policies that would help spur the recovery. And that means looser monetary policy and fiscal stimulus.
Lemkin: I’ll take #2 for $1000, Alex. Tea Klan nonsense works because it feels good. It’s fun to rage away and tilt at grand conspiratorial windmills. Never you mind that actions have consequences, many of which will have direct and painful consequences in your lives. FOXnews and its political wing, the GOP, have a President to defeat. Nothing else matters. Pure electoral nihilism.

Here’s an idea: Democrats demand $100 billion in new tax revenue for every Democratic vote Boehner needs to pass this thing or we kill the hostage (e.g. ‘Merica).

Oh, and did we seem to have concluded an agreement just then? Sorry. We also want a Progressive Taxation amendment to the Constitution.

It is hard to come up with words that are strong enough to describe what an appalling display of misguided ego, inept negotiating postures, bad policy thinking, and utter disregard for the public interest are on display in [the debt ceiling] fiasco. But as a friend of mine likes to say, “Things always look darkest before they go completely black.”

Yves Smith, bringing the optimism.

In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations.

Robert Greenstein, writing about the “Boehner plan” at the nonpartisan CBPP.
Said it approximately one billion times: this isn’t some side affect. It’s the intended consequence. The debt ceiling is simply a useful construct for ramming the same old policy of “zero social safety net, all wealth and benefits to top 2%” GOP dream government setup. All it is, was, or ever will be. If they fix the debt ceiling this morning, they will be using the next federal budget (which will need to be done to have a government post-September) to push the exact same line by this afternoon.
The GOP does not care about deficits. If they did, they’d have taken any of the four increasingly huge deficit cutting plans offered them. They want low to nonexistent tax rates on the top 2%. Simple arithmetic will show anyone that this means eliminating the social safety net; as Ezra Klein has noted: the federal government is better thought of as an insurance conglomerate with a large standing army. To cut taxes to “GOP preferred” levels, services have to go. And to get rid of those hugely popular and helpful services, a large number of people using them have to be convinced said services (and government in general) aren’t working or even in their interest at all. This is the core GOP governing strategy in fifty words or less. Everything they have done and said in the past several decades of tight, lockstep messaging with the aid of the most popular “news” network on television has been aimed at and in service of making those 48 words reality.
Everyone not already up the ladder will kindly go die in the streets. Today they’re using the debt ceiling, tomorrow it will be the FY2012 budget, the next day it will be veterans benefits or whatever else comes to hand. And until they are forced to pay a steep political price for steadfastly using gridlock and economic hostage situations as a negotiating strategy, they will continue to use them. That Congressional and Executive Democrats seemingly haven’t figured this out yet is why they fail.

I really don’t understand how bipartisanship is ever going to work when one of the parties is insane. Imagine trying to negotiate an agreement on dinner plans with your date, and you suggest Italian and she states her preference would be a meal of tire rims and anthrax. If you can figure out a way to split the difference there and find a meal you will both enjoy, you can probably figure out how bipartisanship is going to work the next few years.

John Cole, peering in to the future on February 5, 2009.
Source: washingtonmonthly.com

The United States never had a debt ceiling until 1939, and doesn’t need one now. Congress can control debt by its control over revenues and expenditures; all the debt ceiling does is create the possibility that the government will not be able to borrow the money needed to carry out the laws Congress has already passed.

Mark Kleinman says what should be the first thing out of Obama’s (and every other Democratic) mouth every time a microphone is switched on. Or, perhaps, paired with the depressingly ever-present “God bless you and may God bless America” tagline. Whatever works for them.

Give the utter lack of any unified message on the issue, it’s genuinely remarkable that public opinion has turned so mightily in favor of what you could broadly call the “Obama position” on the debt ceiling. People still don’t seem to grasp what the hell the debt ceiling is or what purpose, if any, that it serves… but they’re beginning to dislike GOP demagoguery on it no matter what. At least we’ve got that going for us.

Again with the Gangs

Steve Benen reports that the Gang of Six, er, Five, er, Six, er five plus Coburn who left but is back again is claiming to have come to terms on a broad budget agreement:

Coburn … noted the Congressional Budget Office would score the plan as a $1.5 trillion tax cut because it would eliminate the Alternative Minimum Tax. It would generate a significant amount of revenue out of tax reform and reduction of tax rates, which authors believe would spur economic growth.

Ah. So we’re going to eliminate the AMT, apparently without paying for it (because when has any gang ever actually paid for something), further cut other tax rates, and then, magically, revenues will just rise and rise. Just like they’ve never done in the past. At least we’re finally getting the serious people together over the kitchen table, as it were. Now if we can just placate the unicorn caucus and raise the ceiling to eleventy trillion billion dollars, we’ll have a deal.