Debt Ceiling myth

mikepegg44

interesting opinion piece. I am sure most won't take any of it seriously because it is from fox but
here goes anyway
http://www.foxnews.com/opinion/2011/01/ ... t-ceiling/

JTH

mikepegg44 wrote:

I am sure most won't take any of it seriously because it is from fox but
here goes anyway

Yeah, he lost me at this:

"Two years into the Obama administration and the overused tactic of claiming crises to push legislation is becoming tiresome."

As if this is the first administration to (over)use that tactic.

Halifax2TheMax

Pretty good explanation of the "crisis" from the other side:

http://www.washingtonpost.com/blogs/fac ... ml?hpid=z1

Note who wrote the study and which administration he worked for.

Yeah, he lost me at this:

"Two years into the Obama administration and the overused tactic of claiming crises to push legislation is becoming tiresome."

As if this is the first administration to (over)use that tactic.

Yellow cake and mushroom clouds, anyone?

Halifax2TheMax

Pretty good explanation of the "crisis" from the other side:

http://www.washingtonpost.com/blogs/fac ... ml?hpid=z1

Note who wrote the study and which administration he worked for.

Yeah, he lost me at this:

"Two years into the Obama administration and the overused tactic of claiming crises to push legislation is becoming tiresome."

As if this is the first administration to (over)use that tactic.

Yellow cake and mushroom clouds, anyone?

mikepegg44

Halifax2TheMax wrote:

Pretty good explanation of the "crisis" from the other side:

http://www.washingtonpost.com/blogs/fac ... ml?hpid=z1

Note who wrote the study and which administration he worked for.

Yeah, he lost me at this:

"Two years into the Obama administration and the overused tactic of claiming crises to push legislation is becoming tiresome."

As if this is the first administration to (over)use that tactic.

Yellow cake and mushroom clouds, anyone?

great link!

I am posting the link to the bipartisan policy center sited in that article
http://www.bipartisanpolicy.org/sites/d ... INAL_0.pdf
very interesting read.



that was definitely interesting...but the

CL8148

Nobody gets it.... But for those who care


Spending v Systemic Reform ( by martin armstrong) - view all his work @ http://www.martinarmstrong.org/economic_projections.htm

The primary reason we are doomed is because those in government by and large still do not see that they are the problem and that the theories and mantras spewed out in press sound bites portray a world that no longer exists. The whole theory of Marxist-Socialism is that we can raise taxes on the rich and corporations to pay for the programs of the poor. The implicit presumption is a closed economic system as if there were no outside world. It fails to account for the migration of capital and is as practical as speeding laws or how about adultery that remains a crime in many New England states based upon the old Puritan moral values embodied in the whole Scarlet Letter story. Capital can simply leave taking employment with it. There is no practicality in the dogma. I hate to tell anyone who has not yet noticed, but this is a global economy these days. A Roman Emperor tried to eliminate prostitution and decreed that a prostitute could not be paid with a coin that bore the image of the emperor. Solution? They created tokens that could be purchased and then given to a prostitute who redeemed them. You cannot simply pass laws against human nature and expect them to actually work. All you do is create an underground economy.
Speaking to people on Capitol Hill reveals a tremendous impasse. We have NOT even defined the problem making any hope of a solution fantasy. The only consensus is that the economy is still in trouble. The Democrats regret NOT stimulating (spending) enough, and the Republicans believe we have a spending problem that reduces confidence in government. This is why there seems to be no solution. 1
Neither side has even begun to address the problem of – WHAT IF the whole economic theory of managing the economy is just dead wrong? What if this is NOT a spending problem, but a systemic structural problem at the very core?
We seem to begin with the presumption that borrowing is normal and this is just the way things are done. This presents a problem that can destroy civilization as we know it. The Republicans see this as a spending problem, so they draw the line in the sand and argue against raising the debt ceiling and that there must be spending cuts. Yet they do not understand the mechanics of what they preach.
If we freeze the debt ceiling and move to cut spending, as noble as this sounds, it would create a Great Depression. Why? We would create a Great Depression by eliminating spending on everything tangible along with the 20% of private income that is dependent upon state spending (inter alia; welfare, unemployment, pensions, and disability). Interest expenditures would crowd out all other spending since there would be no default. The Democrats think just spending money will somehow stimulate the economy, but fail to realize what happens when you are not spending new money (inflationary in theory) but borrowing money from foreigners. In the end, since 40% of the debt resides in foreign hands, that interest would be exported from the economy creating a cash shortage and economic depression because interest expenditures being exported will never stimulate the domestic economy.
The Republicans actually believe that by reducing spending, confidence will be restored, and the economy will boom. This fantasy emerges from the lack of questioning the core system and how it is actually operating. Nice theory, but where’s the beef? However, there is no precedent for this wish list. The Democrats regret not stimulating (spending) enough and see that as the problem. They fail to see the massive exodus of interest leaving the country is a problem, and they too are not questioning the perpetual model of constantly borrowing to sustain the system.
Unfortunately, there is no hope whatsoever of sitting down and solving the problems. The debate just has not reached the level of systemic reform. Therefore, until the shit-hits-the-fan, we cannot expect anything but more economic crisis on the horizon. How do you bail out countries by lending them more just to keep the Investment Bankers happy going to solve anything long-term? The debt will increase. The economic implosion of government continues and the fuels unemployment to come.
We are being driven in a cab and the driver has no license because he can’t read to take the test. The Debt Crisis is continuing because nobody has yet figured out that just perhaps the system is in dire need of reform because it is broke! Oh ya! The Investment Bankers won’t let that happen because they sell the debt for all the countries.

mikepegg44

CL8148 wrote:

Nobody gets it.... But for those who care


Spending v Systemic Reform ( by martin armstrong) - view all his work @ http://www.martinarmstrong.org/economic_projections.htm

The primary reason we are doomed is because those in government by and large still do not see that they are the problem and that the theories and mantras spewed out in press sound bites portray a world that no longer exists. The whole theory of Marxist-Socialism is that we can raise taxes on the rich and corporations to pay for the programs of the poor. The implicit presumption is a closed economic system as if there were no outside world. It fails to account for the migration of capital and is as practical as speeding laws or how about adultery that remains a crime in many New England states based upon the old Puritan moral values embodied in the whole Scarlet Letter story. Capital can simply leave taking employment with it. There is no practicality in the dogma. I hate to tell anyone who has not yet noticed, but this is a global economy these days. A Roman Emperor tried to eliminate prostitution and decreed that a prostitute could not be paid with a coin that bore the image of the emperor. Solution? They created tokens that could be purchased and then given to a prostitute who redeemed them. You cannot simply pass laws against human nature and expect them to actually work. All you do is create an underground economy.
Speaking to people on Capitol Hill reveals a tremendous impasse. We have NOT even defined the problem making any hope of a solution fantasy. The only consensus is that the economy is still in trouble. The Democrats regret NOT stimulating (spending) enough, and the Republicans believe we have a spending problem that reduces confidence in government. This is why there seems to be no solution. 1
Neither side has even begun to address the problem of – WHAT IF the whole economic theory of managing the economy is just dead wrong? What if this is NOT a spending problem, but a systemic structural problem at the very core?
We seem to begin with the presumption that borrowing is normal and this is just the way things are done. This presents a problem that can destroy civilization as we know it. The Republicans see this as a spending problem, so they draw the line in the sand and argue against raising the debt ceiling and that there must be spending cuts. Yet they do not understand the mechanics of what they preach.
If we freeze the debt ceiling and move to cut spending, as noble as this sounds, it would create a Great Depression. Why? We would create a Great Depression by eliminating spending on everything tangible along with the 20% of private income that is dependent upon state spending (inter alia; welfare, unemployment, pensions, and disability). Interest expenditures would crowd out all other spending since there would be no default. The Democrats think just spending money will somehow stimulate the economy, but fail to realize what happens when you are not spending new money (inflationary in theory) but borrowing money from foreigners. In the end, since 40% of the debt resides in foreign hands, that interest would be exported from the economy creating a cash shortage and economic depression because interest expenditures being exported will never stimulate the domestic economy.
The Republicans actually believe that by reducing spending, confidence will be restored, and the economy will boom. This fantasy emerges from the lack of questioning the core system and how it is actually operating. Nice theory, but where’s the beef? However, there is no precedent for this wish list. The Democrats regret not stimulating (spending) enough and see that as the problem. They fail to see the massive exodus of interest leaving the country is a problem, and they too are not questioning the perpetual model of constantly borrowing to sustain the system.
Unfortunately, there is no hope whatsoever of sitting down and solving the problems. The debate just has not reached the level of systemic reform. Therefore, until the shit-hits-the-fan, we cannot expect anything but more economic crisis on the horizon. How do you bail out countries by lending them more just to keep the Investment Bankers happy going to solve anything long-term? The debt will increase. The economic implosion of government continues and the fuels unemployment to come.
We are being driven in a cab and the driver has no license because he can’t read to take the test. The Debt Crisis is continuing because nobody has yet figured out that just perhaps the system is in dire need of reform because it is broke! Oh ya! The Investment Bankers won’t let that happen because they sell the debt for all the countries.

very interesting read.

RFTC

this thread resembles one on zerohedge.com, sarcasm aside-it really is a systemic issue. if i hear one more politician say 'its their debt, not ours' i will...

listen to PJ and crack open an DIPA.

Prince Of Dorkness

"Two years into the Obama administration and the overused tactic of claiming crises to push legislation is becoming tiresome."

Yeah.

that was a LOT more exciting when we were told "WEAPONS OF MASS DESTRUCTION!!!" and "THEYRE GOING TO HAVE DEATH PANELS!" and "GAY MARRIAGE WILL LEAD TO PEOPLE HAVING SEX WITH THEIR DOGS!" and "GAY MARRIAGE MEANS THAT YOUR KIDS WILL BE TAUGHT HOW TO HAVE BUTT SEX IN KINDERGARTEN!!" and "THEYRE COMING TO TAKE OUR GUNS!" and "FEMINISTS WANT TO TALK GIRLS INTO KILLNG THEIR BABIES!" and "OBAMA IS SPENDING $200 MILLION DOLLARS PER DAY IN INDIA!" and..

Stop me any time.


by the way... if you'd like to read some actual news.... Rupert Murdoch... who owns and runs Fox "news" is terrified at the moment. He's being investigated by the FBI. And trust me... this ain't gonna end well for him.

Prince Of Dorkness

CL8148 wrote:

Nobody gets it.... But for those who care


Spending v Systemic Reform ( by martin armstrong) - view all his work @ http://www.martinarmstrong.org/economic_projections.htm

The primary reason we are doomed is because those in government by and large still do not see that they are the problem and that the theories and mantras spewed out in press sound bites portray a world that no longer exists. The whole theory of Marxist-Socialism is that we can raise taxes on the rich and corporations to pay for the programs of the poor. .

You realize that the term "Marxist-Socialism" is like saying "fan of Pearl Jam's Disco Album," right?

Sludge Factory

Prince Of Dorkness wrote:

CL8148 wrote:

Nobody gets it.... But for those who care


Spending v Systemic Reform ( by martin armstrong) - view all his work @ http://www.martinarmstrong.org/economic_projections.htm

The primary reason we are doomed is because those in government by and large still do not see that they are the problem and that the theories and mantras spewed out in press sound bites portray a world that no longer exists. The whole theory of Marxist-Socialism is that we can raise taxes on the rich and corporations to pay for the programs of the poor. .

You realize that the term "Marxist-Socialism" is like saying "fan of Pearl Jam's Disco Album," right?

I bet if they made a disco album it would be pretty stellar though.

Prince Of Dorkness

Sludge Factory wrote:

I bet if they made a disco album it would be pretty stellar though.

And speaking as the most "out" gay guy here, the three best Disco songs in history are "I was made for lovin' you baby" by Kiss, "You shook me all night long" by AC/DC and "I WIll Survive" by Gloria Gaynor (which doesn't double a rock song but had to be included on the list or I'd have my gay card revoked and THEN where would I be?

Halifax2TheMax

Sludge Factory wrote:

Prince Of Dorkness wrote:

CL8148 wrote:

Nobody gets it.... But for those who care


Spending v Systemic Reform ( by martin armstrong) - view all his work @ http://www.martinarmstrong.org/economic_projections.htm

The primary reason we are doomed is because those in government by and large still do not see that they are the problem and that the theories and mantras spewed out in press sound bites portray a world that no longer exists. The whole theory of Marxist-Socialism is that we can raise taxes on the rich and corporations to pay for the programs of the poor. .

You realize that the term "Marxist-Socialism" is like saying "fan of Pearl Jam's Disco Album," right?

I bet if they made a disco album it would be pretty stellar though.

Eddie in a purple, suede suit with a white fedora, Boom with a fedora and a feather, Stone with sun glasses and pleather pants and 3 inch, thigh high lime green leather boots, Jeff with a bowler and gold chains, Matt with an afro and mirrored sunglasses and Mike, well, being Mike. The show has ended after the debut of Pearl Jam's Disco in America tour........................................

Eddie, "I'd like to thank y'all for being hip to the down beat. Lemme introduce y'all to the power behind the mic. That's right. That's what I'm talkin 'bout.......

Mr. Boom Gaspar on the electronic keyboard, y'all..........That's right......

Laying down 'da beat, Mr Beat hisself, Matt, I got the beat, I got it, CAM-MER-ON! Yea, everybody.........Ya know.....

Over there in the extra-stellar corner, playing wit dat funky soul, not sayin much but lettin his playin' doin' da talkin, Mr. Stooooooone Gossssssssssssaaaaaaaaahhhhhhhh! Oh, yea, baby, he's cool. Yo, Stone, baby, where's yo sun glasses?

And where would we be at wit out the groove? Huh? Ya know what I'm talkin' bout. You gots to have your groove on, yea baby. Givin' us Sweet Lou, on bass, the one and only and you know it baby, the one and only, the GROOVE Master layin it on...............Mr. Jeff, I meant, Ament BABY, yea, it gots to have the groove baby da groove, yea! There ain't no one sweeter, baby!

And on the other corner, laying down, oh jesus, how do ya say it? Y'all know what I'm 'bout to say now, dontcha? You know, the man over there, playing like he's the devil hisself, the one and only, and don't get to close, the GOD, the legend, spewing forth the rythem and gettin us up and on our feet, Mr. Mike "McFuckin' 'Cready", y'all, damn give it up for the devil slayer, yo."

Disco ball comes down, Mike grabs the mic and says, " And the grand Master flash, the man wit da words, the man wit da soul and da Man who has it all figured out, ain't dat right Stone?, Mr. Eddie "I love Disco" Vedder, yea! Thank you, good night, now clap yo hands and boogie down to Yellow Ledbetter be in the morning, yo!

I'd pay to see it and I do think it would be a stellar disco album. Ha!

Prince Of Dorkness

oh dear.

have I derailed ANOTHER thread with my gaiety?

Sorry.

JTH

Prince Of Dorkness wrote:

Sludge Factory wrote:

I bet if they made a disco album it would be pretty stellar though.

And speaking as the most "out" gay guy here, the three best Disco songs in history are "I was made for lovin' you baby" by Kiss, "You shook me all night long" by AC/DC and "I WIll Survive" by Gloria Gaynor (which doesn't double a rock song but had to be included on the list or I'd have my gay card revoked and THEN where would I be?

Why stop at three? I want to see the rest of this top ten list.

Byrnzie

http://www.guardian.co.uk/commentisfree ... wn-murdoch

What hope is there for us if America is driven to the brink of meltdown?

If the US cannot service its public debts and defaults, the outcome will have catastrophic consequences


Will Hutton
The Observer, Sunday 17 July 2011


When President Obama, the supreme rationalist, says that there are just days to avert Armageddon, everyone should sit up and listen. For months, Republicans have used their new majority in the House of Representatives to block any move to lift the artificial cap on the amount the US government can borrow. If by this Friday they still refuse – insisting on up to $4trillion of spending cuts, excluding defence, and no tax increases as the price of their support – then the US will be unable to service its public debts. The biggest economy on Earth will default.

The results will be catastrophic, argues JP Morgan chief executive Jamie Dimon – a warning repeated by Obama. The US government will have to start to wind down: soldiers' wages and public pensions alike will be suspended. But in the financial markets there will be mayhem. Interest rates will shoot up and there will be a flight from the dollar. Banks, uncertain about their expected income from their holdings of US Treasury bonds and bills, will call in their loans, creating a second credit crunch. Some may collapse. Even to get days away from such a prospect, says Obama, will now have costs: every creditor to the US has been shaken to the core by American politicians not taking their responsibilities as borrowers seriously. They will exact a higher price for lending in future, even if a bargain is struck now.

But the Democrats cannot agree to the Republicans' absolutist demands, in part because the arithmetic of deficit reduction does not work without tax increases and cuts in defence spending, in part because they passionately believe that with taxes the lowest for 50 years, the US's rich should share in the pain and in part because in any human exchange there is an element of horse-trading. The Republicans want to suspend the rules by which not just Washington but any political system operates. They want to be political winners who take all, risking even the collapse of the US economy to get their way.

Yet even though their sums do not add up, they will not budge. They are immovable. Steve King, an ultra-conservative from Iowa, says that warnings from Wall Street's finest are "empty threats". Others, elected as Tea Party candidates last November, consider they have been told by God to pursue the holy mission of rolling back the insidious and demoralising advance of the federal government. Taxation is the illegitimate confiscation of honest citizens' hard-earned dollars; in a perfect world, there would be a tiny state, close to no taxation and no regulation. Americans must confront the reality that their country is allegedly bankrupt, a situation they say is created by irresponsible Democrat politicians and their allies, false Republicans. "Real Republicans" don't blink.

President Obama has tried to fashion a bargain with a collection of rightwing politicians that most in Washington regard as both mad and dangerous. Yet, after months of talking, the Republicans will not offer to bargain, causing President Obama to walk out of the talks last Thursday in pure exasperation. It says a lot about American politics and culture that such a passionate minority believes that it can defy not just American political tradition but also the normal terms of trade that define human association.

Everyone expects there to be a compromise at one minute to midnight on the very last day. I am not so sure. These are politicians who in some respects have more in common with Islamic religious fundamentalists than the Enlightenment tradition which gave birth to western democracy. The Tea Party sees neither virtue nor integrity in any position but their own. Nor do many of their number want to build political careers. They have been sent by God and their electors to bring down Washington.

There has always been this fundamentalist strand in US life, but what has inflamed it over the last decade is a twofold process – a wrong-headed understanding of why US economic pre-eminence is being challenged, closely linked to the breakdown of a public realm in which ideas are discussed, traded and exchanged in a climate which respects argument. The abolition of the Fairness Doctrine in 1987, which required all broadcasters fairly to represent all points of view, has created a mass media shouting, ranting, sloganising and overwhelmingly from the political right.

The leader in the charge is Rupert Murdoch's Fox News, a TV channel with an audience of 100 million in which all news and comment have to be shoehorned – subtly in its news operation and overtly in its commentary – into a conservative worldview. It operates, as the former White House communications director Anita Dunn has said, "as either the research or communications arm of the Republican party". Leading Republican stars such as Mike Huckabee or Sarah Palin are on its payroll. Its political shows pull no punches: the hosts are hard-line Republicans. If Fox News were to permit the case for tax increases to be fairly reported or discussed it would not be doing its job. Murdoch, refusing in a Fox News interview last week even to discuss the News of the World, would be displeased.

No explanation of the Tea Party "Real Republican" intransigence over the debt talks is possible without understanding how its political base has been constructed and sustained. But the damage goes well beyond the US getting so close to debt default. It makes rational discussion of wider US policy options close to impossible. Like reporters in the Soviet Union or China, Fox News journalists have to parrot an ideological line: the US economy's dynamism is rooted entirely in sturdy, enterprising, God-fearing individuals threatened only by federal taxes and regulation. Thus the Republican negotiating stance.

Navigating an economy through the aftermath of a credit crunch with a mountainous legacy of private debt and crippled banking systems is enormously difficult. On top, there is the spectre of the implosion of the euro. Yet in the US – and to a degree in Britain – the political right is implacably opposed to the creative public action that in the past has been crucial to success in such circumstances. It is already clear that even if the US avoids default in the weeks ahead, the price will be to so cramp the US government that it can do little or nothing.

Mr Murdoch is apologising this weekend for the behaviour of his papers over phone-hacking. That, as western economies totter on the precipice, is not all for which he has to apologise.

gimmesometruth27

i really doubt very seriously that WALL STREET will allow us to default on the debt. they have a powerful lobbying force, and anything bad for wall street is not going to be allowed to happen. especially when the republican party appears to be the ones preventing any progress to be made on this issue.

Byrnzie

Republicans really have no interest in the welfare of the U.S. They only care about their own interests, which revolve primarily around power and greed. They are now ready to drag America into a black hole in order to continue their childish, selfish opposition to every single one of Obama's policies.


Edit: This comment in the comments section of this article pretty well sums it up:


'The days of Republicans being rational are long gone.....There may be a few left in the party but they have been long silenced by a plethora of cretinous wackos, it's really rather sad, and indicative of the wholesale destruction of the country and it's industrial base....Which they are entirely responsible for, they call themselves patriots, ha, they fucked America, and they want the ordinary people to pay for it........They claim to hate socialism, but it's ok if it bails out the banks? Wankers.'

http://www.guardian.co.uk/commentisfree ... a-congress

As the US nears the brink, the budget row is exposing Republican madness

It is economically not feasible to cut the deficit without raising taxes. But as Reagan's presumptive heirs resist, default looms


Gary Younge
Guardian.co.uk, Sunday 17 July 2011

Back in 2004 I met a pleasant Republican called Burton Kephart, who had lost his son in Iraq and wanted to save my soul. Opening his Bible at Matthew and Romans, he told me I was born a sinner but that, if I accepted Jesus into my heart, I could be saved.

I asked what would happen if I didn't. "Eternal judgment," he said. "Hell."

You're never that far away from the apocalypse in US culture or politics. The most popular books of the past decade, the Left Behind series, are based on a fictionalised account of the Judgment Day. The 12 books sold more than John Grisham. "I fear for this country if [John] Kerry wins," said Kephart. "God has a plan for the ages. Bush will hold back the evil a little bit." The facebook page "If Sarah Palin wins in 2012 – it will be the end of the world!!!" suggests a similar reflex among liberals, even if it's generally not religiously inspired.

So when President Barack Obama talks about "averting Armageddon", there is good reason to be sceptical. In a nation given to hyperbole, where 59% believe the events in Revelation are going to come true, there's always a swarm of locusts on the horizon.

Nonetheless, the truth is that, unless Obama reaches a deal with Congress by 2 August to raise the country's debt ceiling, effectively extending its credit limit so it can borrow more money, very bad things are going to happen. The US government will effectively run out of money. But it would go into default not because it can't pay its bills – like Greece – but because it won't.

Until last week this seemed unlikely. Then on Wednesday evening a meeting between Obama and House majority leader Eric Cantor ended acrimoniously. Democrats want to reduce the budget deficit by cutting spending a lot and raising taxes a little. Republicans insist that only spending cuts are acceptable. The meeting ended with the president saying: "Eric, don't call my bluff… This may bring my presidency down, but I will not yield on this."

"The noble art of losing face," UN weapons inspector Hans Blix used to say, "will one day save the human race." But at this point the two sides seem so dug in that it is difficult to see how they could climb out to reach common ground. Blix's dictum may prove as successful at salvaging a budget deal as it was at preventing the Iraq war.

The most likely outcome still remains a fudge that allows both sides to claim victory. But that is no longer the certainty it was at this time last week. The US government has started making contingency plans, and ratings agencies have put the politicians on notice.

Asked what would happen on 3 August if no deal was reached, Obama, who is no alarmist by instinct, said: "There are about 70 million cheques that go out each month." These included cheques for social security, veterans and people with disabilities, he said, adding: "I cannot guarantee that those cheques will go out on 3 August, because there simply may not be the money in the coffers to do it."

That's just the beginning. Among the other effects of a US default could be a spike in interest rates, a collapse in the dollar and a sudden return to global slump. And, although 2 August is the deadline, financial markets are no great respecters of legislative timetables. As soon as they think there's a serious risk of default, they will act. Congress may not have to take the country all the way to the brink: the brink may come to it.

Some liberals have criticised Republicans for playing Russian roulette with the fragile economy. Raising the debt ceiling is a routine part of the way government works. It happened 17 times under Ronald Reagan and seven times under George W Bush. The Republican stand-off, they say, irresponsibly places partisan political goals above the national interest.

This misstates the problem. Questions of public funding are supposed to be political. We elect people, in no small part, because of the economic priorities they set and their ability to enact them. The issue here is not that the Republicans have politicised the ceiling but the disingenuous, dystopian and dysfunctional politics they are espousing.

It's no mystery how the US got to this point. In 2000, Bush inherited a budget surplus, only to implement massive tax cuts – with the most going to those who needed it least – launch two wars and oversee a recession that turned into a slump, thanks to a huge banking crisis.

The Republican plan aims to put the burden of these military follies and that economic mismanagement on the backs of those who have suffered the most from them and bear the least responsibility for them: the poor.

Take food stamps: assistance given to those in the wealthiest country in the world who are so poor they do not have enough to eat. Between 2008 and 2011 the number of those living on food stamps increased by almost 50%, putting one American in seven in the programme. The Republicans would like to trim that budget by about 20%. They have also voted to cut another health and nutrition scheme for poor pregnant women, infants and children by 11% and to cut healthcare benefits for the elderly. They would rather do all this than raise taxes on corporate jet owners, hedge fund and private equity investors and oil and gas companies.

Obama has, characteristically, already conceded most of what the Republicans want. He offered to divide cuts and tax rises 83%:17% respectively. Earlier this year a Republican report claimed that an 85%:15% divide was enough for successful fiscal consolidation.

The Republicans are characteristically overplaying their hand. Obama needn't have given away the store. A recent Gallup poll shows that only 20% of Americans want to see a deal with spending cuts only; more than double that figure want an equal mix of cuts and tax rises, mostly tax rises or only tax rises. True, twice as many would prefer their congressional representative to vote against raising the ceiling than for it. But that is still fewer than half, and more than a third say they don't know enough to say. On this issue, as with so many others, the nation is crying out for leadership, but, although Obama was elected to make a difference, instead he keeps on splitting the difference.

But finally it exposes the dysfunctionality within the Republican party, whose conservative wing is behaving less like a mainstream electoral force than an ultra-left sect being advised by a petulant two-year-old. It is simply not economically feasible to cut the US deficit without raising taxes, given that Americans are enjoying their lowest tax burden since 1958.

'Re-election is the farthest thing from my mind," representative Tom Reed, a newly elected Republican from upstate New York told the New York Times. "Like many of my colleagues in the freshman class, I came down here to get our fiscal house in order and take care of the threat to national security that we see in the federal debt. We came here to do something. We don't care about re-election." That's just as well. The only time Cantor's plan was put to the voters, Republicans lost a seat in a by-election that they had won only six months earlier with 74% of the vote.

The four horsemen are saddling up, with Reagan's presumptive heirs ready to ride them into the sunset.

"The choice is for the United States to default on its debts for the first time in our 200-year history, or to accept a bill that has been cluttered up," explained the president in a radio address. "This is yet another example of Congress trying to force my hand… Unfortunately, [it] consistently brings the government to the edge of default before facing its responsibility."

The year? It was 1987. The president? Ronald Reagan.

gimmesometruth27

reagan could not win an election in this day and age. taxes were raised about 11 times under his watch. that is unheard of among the current crop of republican politicians.

Split Personality Disorder

The clash over the debt has exposed the gulf between GOP purists and pragmatists.

http://www.newsweek.com/2011/07/17/gop- ... -debt.html

However the debt-ceiling standoff is ultimately resolved, the trench warfare between House Republicans and the Democratic president has shown the country that the GOP is caught between its antigovernment fervor and the need to keep the lights on.

The populist Tea Party movement that helped the Republicans capture the House last year is fueled by a loathing for government and a refusal to support a deal with Democrats offering what once would have been unthinkable budget cuts. Republicans have even turned on their own, treating the party stalwart Senate Minority Leader Mitch McConnell like an ideological traitor for proposing a last-ditch plan to allow President Obama to unilaterally raise the debt ceiling rather than watch the federal government slide into default.

“McConnell needs to be sent home,” says Mark Meckler, cofounder of Tea Party Patriots. “It’s an embarrassment. It’s an abdication of governing responsibility.” He is just as dismissive of such House GOP leaders as Speaker John Boehner for their willingness to compromise: “These guys are out of touch with reality.”

But compromise is a Washington reality, which is why McConnell first broached his plan with Senate Majority Leader Harry Reid, who promised not to trash it. More telling, perhaps, was his call to Grover Norquist, the conservative crusader who has gotten most Republican members of Congress to sign a no-new-taxes pledge. “I think it makes sense,” he told the senator. Norquist tells NEWSWEEK he would rather have Obama “own the whole thing” than see Republicans accept “a phony budget deal that looked like you were cutting spending.”

What remains of the party’s pragmatic wing is nervous. John McCain says independent voters “are now up for grabs,” and that “too many new Republicans are already committed to not raising the debt ceiling no matter what.” And how times have changed: Bruce Bartlett, a onetime aide to Ronald Reagan, says that “Reagan couldn’t get elected dogcatcher these days. He raised taxes at least 11 times. Back then you had responsible adults in the Republican Party who put country over partisanship.”

Yet much of the GOP’s energy now comes from the Tea Party crowd that adores insurgent presidential candidate Michele Bachmann, the Minnesota congresswoman who opposes raising the debt ceiling. Bachmann rejects tax hikes in any form and accuses the White House of hyping the dangers of default if no budget deal is reached by the Aug. 2 deadline. Such talk prompts Democratic Rep. Chris Van Hollen to accuse some Republicans of acting “like cult members.”

While detractors accuse the GOP of recklessness, the party’s hard-liners say they are keeping a campaign promise to block job-killing taxes. But the brinksmanship could undermine the party’s electoral self-interest. It was precisely that concern that led McConnell to craft his fallback plan. Already under pressure from business groups to make a deal on the debt, McConnell privately concluded that every group—seniors, veterans, military families—would side with Obama if a default tanked the economy. “Republicans would get reamed,” a GOP official says. “The default crowd doesn’t get that.”

The upshot is that Republicans will head into 2012 with their presidential candidates in the mold of House Majority Leader Eric Cantor, who has become the face of the negotiations by denouncing every plan with a whiff of revenue hikes, including one backed by Boehner, Cantor’s ostensible boss. Obama, meanwhile, will portray the party as risking economic chaos to protect the rich.

The schism in the GOP is mirrored by divisions in the Tea Party movement. Matt Kibbe, president of Freedom Works, wonders why Republicans refuse to take “yes” for an answer. “When Obama is talking about trillions of dollars in spending cuts,” Kibbe says, “we’ve changed the conversation.”

And that, says historian Richard Norton Smith, underlines the paradox of today’s Republican Party: “When you think how far things have moved in the last six months, they won. Why can’t they accept that fact? Purity is fine in theory, but they seem wedded to the impossible.

Sludge Factory

We want Congress to actually balance the budget but yet Obama threatens to veto the one bill that would actually require Congress to do this. This would also bring the republicans on board with raising the debt ceiling. I think it is disingenuine to soley blame the republicans for politicking here.

http://news.yahoo.com/obama-threatens-v ... 33918.html

WASHINGTON (AP) — The Obama administration says President Barack Obama would veto the "cut, cap and balance" plan proposed by tea party-backed House Republicans if it lands on his desk.

In a statement, the Office of Management and Budget says that setting arbitrary spending levels and a balanced budget amendment are not necessary in order to achieve financial stability.
The so-called "cut, cap and balance" plan is favored by some Republican freshmen in the House. It would allow the government to borrow an additional $2.4 trillion, but only after big and immediate spending cuts and adoption by Congress of a constitutional amendment requiring a balanced federal budget.

The plan is sure to stall in the Senate, where majority Democrats say it would lead to decimating budget cuts.


I disagree with the OM&B's statement. Apparently, financial stability has been an elusive beast that no Congress in the past decade has been able to subdue (regardless of what side was in control). It appears that there actually needs to be something in there that requires Congress to actually do its job. This whole back and forth just proves even further how out of touch Washington is with financial accountability.

shadowcast

Who lowers taxes during two wars? Bushie boy does that's who. This was never done throughout the history of any country. Leave it up to W and he will slash taxes when shit is starting to get more expensive. Then Barack wants to put taxes back to where they were before Bush on the rich mind you and the Right are being little bitches. The Republicans and the group they have running is an embarrassment not only to the Right but to America. They are so out of touch with America on a lot of issues. These ass hats are all about themselves and are putting this country at risk for their own political gain. They know they have a weak group running against Obama next year and the only way to win is let the economy crash again but again they are the true patriots. What a bunch of dicks
.