The march of folly toward government default
Writing in the Wall Street Journal, Maury Harris, chief U.S. economist for UBS Investment Bank, and Drew T. Matus, senior U.S. economist, UBS Investment Bank, walk us through the likely consequences of a government default:
“Even a temporary default would eliminate the safe and liquid nature of the U.S. Treasury market, harming this country’s ability to exercise its power, to the detriment of the U.S. and the global economy….
The impact of a U.S. Treasury default could make us nostalgic for the market conditions that existed immediately after the failure of Lehman Brothers…. it would not simply be a question of whether Treasury investors would get their money; eventually they would. It would be a question of whether the U.S. would lose something that made it special. The answer would be yes and the consequences for U.S. growth could be significant.”
For those who have forgotten, when Harris and Matus warn that the chaos of default could make us nostalgic for the post-Lehman timeframe, they refer to those panicked days on Wall Street in the fall of 2008, the days that scared President Bush into warning that “this sucker could go down,” and that so humbled Henry Paulson that he literally got down on his knee to beg Nancy Pelosi for help. The consequences of default, Harris and Matus warn, could make all of that seem minor in comparison.
On the brighter side, the two private-sector economists also write that “we still do not view government default as a likely outcome” and predict “a near-term resolution of this issue.” Perhaps because they understand the dire consequences of default better than most, they don’t believe that sane people will allow it to occur.
In that, I think they are naive. Their optimism assumes, among other things, that leaders in Washington remain in control of events, and I have my doubts about that. Through their own miscalculation and overheated rhetoric, they seem to have nailed shut every escape route and have only one path, the path of confrontation, still open to them.
For example, when House Majority Leader Eric Cantor walked out of deficit negotiations yesterday, demanding that tax hikes be taken off the table, it was not a calculated decision on his part. The term “decision” implies that Cantor could have chosen to stay, but no such choice was possible. His political identity and power flow almost entirely from his opposition to taxes, and he knows that the moment he wavers in that opposition, he will be stripped of his power and replaced by someone of sterner faith. To a political movement built upon the rejection of compromise, compromise is suicidal.
Slowly, that realization seems to be sinking in.
As Politico puts it, “having picked this risky fight over increasing the debt limit, Republican leaders are genuinely uncertain — even frightened — that they don’t know where their votes will come from to avoid the threat of default.” That’s because they don’t control their followers; their followers control them.
In “Guns of August,” her classic study of the origins of World War I, Barbara Tuchman documented how a conflict that nobody wanted and nobody thought possible became terrible reality nonetheless.
“War,” she wrote, “is the unfolding of miscalculations.” As she described it, political and military leaders who felt trapped by their own domestic mythologies failed to understand that leaders in other countries were just as trapped by mythologies of their own. As a result, what should have been unthinkable had in fact become inevitable.
I hope I’m wrong in seeing certain parallels, but August looms.
– Jay Bookman
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484 comments Add your comment
getalife
June 24th, 2011
12:11 pm
Playing politics with a default is insane.
DeMint said if they raise it, those gop are gone.
They get more radical everyday and it has to stop.
Where is wall street and the coc?
corporate media gives the gop a free pass on this insanity.
The uncertainty alone should have them screaming but nobody is.
Not even the dems.
CJ
June 24th, 2011
12:12 pm
I’ve took my retirement funds out of stocks and bonds and put them into money market funds weeks ago.
As Steve Benen wrote–
As far as GOP leaders are concerned, they picked the game, so they also get to pick the rules. Republicans choose the policy goal (debt reduction); Republicans choose the solution (massive spending cuts); Republicans choose what gets taken off the table (tax increases); Republicans choose what Democrats are permitted to propose; and Republicans choose when the negotiations end.
After making all of this clear, Republicans urged President Obama to go along with what they perceive as “a bipartisan plan.”
For those who’ve succumbed to madness, “bipartisan” apparently means “Republicans get what they want and Democrats shut up.”
http://www.washingtonmonthly.com/political-animal/2011_06/so_much_for_acting_like_adults030475.php
Hillbilly D
June 24th, 2011
12:14 pm
This is all just a silly game being played by silly R’s and silly D’s. In the end, they’ll come up with a deal and guess who the loser will be. y’all have a good day.
Finn McCool
June 24th, 2011
12:15 pm
Good article:
Lights, Camera, Impasse
Why there’s no need to worry about the long-awaited breakdown in debt-ceiling negotiations.
Republican leaders must make a show of how difficult they are to impress their members and constituents. If a deal happened with Biden in a room and there wasn’t any public outcry, conservatives would have every right to be suspicious that Republicans got rolled.
Democrats need the blow up for similar reasons. The moment allows them to try to paint Republicans as captive of their unpopular Tea Party wing, which might lower the expected level of spending cuts, or at least rearrange them if Republicans feel the heat. Both sides also need the debate to play out in public so that everyone can fully understand why an ultimate deal was the best one leaders could get.
http://www.slate.com/id/2297499/
Aquagirl
June 24th, 2011
12:18 pm
To a political movement built upon the rejection of compromise, compromise is suicidal.
Republicans: the party of Apocalypse. With their overly influential Left Behind wing, the idea that cooler heads will prevail is not warranted.
larry
June 24th, 2011
12:20 pm
Why there’s no need to worry about the long-awaited breakdown in debt-ceiling negotiations.
I hope you are right.
But with the public fully against the Ryan plan and having buyers remorse at putting Republcians in power in Wisconsin , Florida , New Jersey and in the House , i would say the Republicans are playing Russian roulette if they are even hoping for a blow up.
What they dont seem to know , or ignore, is that the public is watching.
Brosephus
June 24th, 2011
12:21 pm
Jay
Have you seen Ezra Klein’s take on Cantor’s decision. I can see his perspective, and by his logic, Cantor’s decision is the ultimate political calculation.
http://www.washingtonpost.com/blogs/ezra-klein/post/why-eric-cantor-wont-make-the-budget-deal/2011/05/19/AG3FYPhH_blog.html
Cantor has the credibility with the Tea Party that Boehner lacks. But that’s why Cantor won’t cut the deal. The Tea Party-types support him because he’s the guy who won’t cut the deal. He can’t sign off on tax increases without losing his power base. But if he’s able to throw it back to Boehner, and Boehner cuts the deal, that’s all good for Cantor: Boehner becomes weaker and he becomes stronger. Which is why Boehner will also have trouble making this deal. It’ll mean he made the concessions that Cantor, the true conservative, didn’t. That’s not how he holds onto the gavel in this Republican Party.
Too damned bad we have grade schoolers in DC when we need men with backbone to just make the danmed decision already.
USinUK
June 24th, 2011
12:22 pm
larry – meh. it’s not a sex scandal. that’s all the public cares about. (see: Weinergate) if there’s one thing I’ve learned over the last 10 years, it’s that the American public doesn’t have the first clue about economics – especially at this level.
Citizen of the World
June 24th, 2011
12:23 pm
What is it somebody said? Consistency is the hobgoblin of little minds? The Republicans’ consistently uncompromising stance on taxation in the face of our current situation exposes the little minds of the base to whom they must answer.
USinUK
June 24th, 2011
12:23 pm
Brocephus – and these are the people who call themselves “the grown-ups”
oy.
USinUK
June 24th, 2011
12:24 pm
Citizens – a FOOLISH consistency is the hobgoblin of little minds
(if you want to be exact)
Peadawg
June 24th, 2011
12:26 pm
I wonder if Obama was thinking about all this when he voted against the debt ceiling increase back in 2006 (I think…year may be wrong). The hypocrisy is sickening.
But anyways…let’s get a deal done already. Cut spending along with a deal that allows the Bush tax cuts expire for the wealthy. It’s so simple but the dumbarses in Washington can’t get it.
Chris
June 24th, 2011
12:26 pm
“That’s because they don’t control their followers; their followers control them.”
What a concept! Representatives actually representing their constituents. It seems like it almost was meant to be this way, no?
buck@gon
June 24th, 2011
12:26 pm
Jay,
Maury Harris was an early obama supporter. Were he republican and Bush President you wouldn’t have mentioned his unique point of view.
So, let us for a second consider what you say is true about Cantor”(t)he term “decision” implies that Cantor could have chosen to stay, but no such choice was possible. His political identity and power flow almost entirely from his opposition to taxes, and he knows that the moment he wavers in that opposition, he will be stripped of his power and replaced by someone of sterner faith. To a political movement built upon the rejection of compromise, compromise is suicidal.”
What about Obama; he’s not even in that meeting? What about compromise with him? I think you realize that what you say of Cantor is even more true of OBAMA. He can’t agree to a budget without TAX INCREASES. How isn’t that obvious? He hasn’t passed a budget as a chief executive of any organization (except perhaps his own household) at any time in his life. He’s now been president of the USA for nearly three years!
It’s time to put away your doubts about Cantor and Republicans, Jay. The locus of incompetence here is named Democrat. The same problem existed before Republicans took over the House, and indeed, the only budget resolution so far that has passed the most democratic votes in the senate was Paul Ryan’s. No one voted YEA on President Obama’s budget. It lost 97-0–a joke, literally. When it comes to puting forth their own ideas, Democrats don’t even vote PRESENT anymore like old Obama used to do.
I think the American people are realizing this; slowly but surely and despite your talent for frequent flack spread the other way. To borrow your great phrase: “Slowly, that realization seems to be sinking in.”
To date:
We have runaway spending, the president’s own deficit commission recommending steps that HE refuses to even acknowledge, a reduction in the credit rating, rising food and gas prices, anemic growth, sustained high unemployment, discouraged workers, sagging presidential approval ratings, a nascent melomaniacal takeover of healthcare that ALREADY is increasing costs, including insurance premiums, two years of inaction on budget–that is, continuing resolutions, never in Obama’s life has he passed a budget as a chief executive of anything, and Obama does not even care enough about the budget to handle negotiations himself.
You’re worried about the federal budget and the debt ceiling, Jay? Seems to me that the federal government needs to default with someone, though hopefully NOT our creditors. How about we default with all those New Deal and Great Society programs? Seems to me that SECTREAS has the ability to write the checks that we have to write. As outlined above though regarding Democrats, don’t expect HIM to be anymore responsible than he was on his own tax returns.
I and all the Republicans I know are worried about the COUNTRY–and you would be wise to know that there is a huge distinction with a difference.
Chris
June 24th, 2011
12:29 pm
@USinUK ‘American public doesn’t have the first clue about economics – especially at this level.’
American’s understand the most basic principle of economics – you can’t spend what you don’t have.’ But you are right, most people don’t understand the shell games and the delayed payments for unrealistic promises that comprises the accounting methods of our federal government today. Perhaps the government should learn from the people?
buck@gon
June 24th, 2011
12:30 pm
I think that it is risible nonsense that Democrats conflate all of these issues: the federal deficit, the debt ceiling, the economy, spending, revenue generation, taxation.
To them and to their supporters, the issues aren’t issues at all; it’s just a simple story. Republicans represent the rich, and THEY want to ruin the country so they can hoard money and rub their hands together in glee.
That’s the Democrat line, period. There’s nothing more.
RB from Gwinnett
June 24th, 2011
12:30 pm
Gee, there’s a surprise…. Jay thinks it’s the R’s who need to compromise and stop listening to the people who elected them to go to Washington and STOP SPENDING MONEY WE DON’T HAVE!!!!
What compromise have we seen from the D’s, Jay? A $12.59 budget cut proposal? Seriously????
Dave R.
June 24th, 2011
12:31 pm
Fainting couch for the libs – STAT!
buck@gon
June 24th, 2011
12:31 pm
getalife
getaneducation
The Leg Lamp is a “major award”….
June 24th, 2011
12:31 pm
And so what does Obama offer to remedy the problem? More spending? Obamacare? Increased taxes without comparable budget cuts? Nothing….just political posturing. It’s the “other side” that’s causing the problem.
Brosephus
June 24th, 2011
12:33 pm
USinner
I’m just waiting on the next “scandal” to take the heat off of them being a bunch of jackasses. Notice that when AW was front and center about twitter, nobody discussed the fact that those jackasses couldn’t find their way out of a open field even with the aid of a sherpa. Now that the focus will be back on them, I’m sure they’ll find something else to scandalize. Maybe some politician will have his/her fly unzipped while speaking at the podium or something.
buck@gon
June 24th, 2011
12:34 pm
Cit of the wo…
Consistency is the hobgoblin of little minds. I suppose then that Congress’ consistently passing tax increases first, after promising spending cuts would be consistently ignored then by the tea party, if indeed they were made up of little minds.
Good thing those guys are smart, eh?
USinUK
June 24th, 2011
12:36 pm
Chris – first of all, the government is not a business. it’s not there to make money, it’s there to provide a service to the people.
secondly, it’s not a household, either (see above)
lastly, if you want to talk about shell games, the investment banking system is FAR more of a shell game than the gummint could EVER be – it puts more people at risk than the gummint EVER could – and the people don’t seem to care.
USinUK
June 24th, 2011
12:37 pm
Brocephus – “those jackasses couldn’t find their way out of a open field even with the aid of a sherpa”
… and that’s just one of the reasons why I think you rock.
Keep Up the Good Fight!
June 24th, 2011
12:38 pm
I agree with the Cut the Deficit in the long run. Now let’s cut the bull, cut the subsidies that the Republicans vote to continue and cut the Republican nonsense.
Republicans, stop spending money we dont have…cut the subsidies to big business.
Mr Right
June 24th, 2011
12:39 pm
To a political movement built upon the rejection of compromise, compromise is suicidal.
Slowly, that realization seems to be sinking in.
And thats why Dems ALWAYS insist on tax hikes!
josef
June 24th, 2011
12:39 pm
http://www.youtube.com/watch?v=k8mUTHO6P8k&feature=related
Granny Godzilla
June 24th, 2011
12:39 pm
Let us recall that President Obama:
“offer[ed] a plan to trim borrowing by $4 trillion over the next 12 years by combining deep cuts in military and domestic spending with higher taxes on the wealthy.” [Washington Post, 4/13/11]
I think the entire debate was perfectly illustrated by our old pal
Mike Luckovich today.
Jay
June 24th, 2011
12:41 pm
RB, Leglamp, as Cantor himself has acknowledged, the negotiations to date have identified some $2 trillion in cuts that the two sides have agreed upon.
$2 trillion in cuts.
Versus how much in tax increases? Zero?
Yes, one side has tried to compromise; the other side refuses. The evidence is overwhelming.
BADA BING
June 24th, 2011
12:42 pm
I don’t know how to fix the economy, and neither do any of you on this blog. If you did, you would be IN CHARGE.
Left wing management
June 24th, 2011
12:42 pm
As posted below, the reasons for optimism were put this way by Steve Benen at Wash Monthly:
… when push comes to shove, I suspect some very wealthy, very powerful conservatives will call congressional Republicans and say, “Time to stop screwing around.” Wall Street, the Chamber of Commerce, the National Association of Manufacturers, and dozens of other power business lobbying groups want the debt ceiling raised, and these are the kind of folks who tend to give Republicans marching orders that get followed.
http://www.washingtonmonthly.com/index.php
But the reasons for pessimism are, I fear, equally compelling, if not more so, and they boil down to just what you say Jay, the World War I phenomenon, the perverse logic of unintended consequences. As Ezra Klein puts it:
But the pessimistic analysis is that if you had to write a plausible scenario for how America defaults on its debt, or at least seriously spooks the market, this is how it would start. After insisting on using the debt limit as leverage for a budget deal, the Republican leadership finds they can’t actually strike a deficit-reduction deal, but nor can they go back on their promise to vote against any increase in the debt limit that isn’t accompanied by a deficit-reduction deal. What follows is a lot of jockeying and fingerpointing, a short-term increase or two, and eventually, a market panic.
USinUK
June 24th, 2011
12:42 pm
Granny – :shocked:
you mean the Dems HAVE offered to cut the budget???
NOOO!!! really??? but I could swear that the GOP said that the Dems haven’t done ANYthing …
they wouldn’t LIE to us, would they???
Steve P.
June 24th, 2011
12:42 pm
Can we stop paying defense contractors until we have a deal worked out, maybe that would put some pressure on the republicans.
Chris
June 24th, 2011
12:43 pm
@USinUK – I disagree, the government is a business and it’s goal is to make money (via growing the economy and reinvesting it into infrastructure to perpetuate that growth). It’s purpose is not to ‘provide a service to the people’ but to supply the conditions necessary for private citizen wealth and quality of life, if you consider this a service then we’re on the same page, but I took your meaning to be things life welfare, medicare, and social security. In my view these are not responsibilities of the government but responsibilities of the individual. Personal responsibility has been outsourced to the government more than jobs have been outsources to foreign countries, in my opinion of course.
As for your investment banking example, couldn’t agree more. They are paper pushers who bring nothing of tangible value other than paper profits based on the work of others who actually make something. The real crime is that they have the power to shut down a business through manipulative investing.
stands for decibels
June 24th, 2011
12:43 pm
they wouldn’t LIE to us, would they?
every damn day and twice on Sundays.
Peadawg
June 24th, 2011
12:44 pm
“offer[ed] a plan to trim borrowing by $4 trillion over the next 12 years by combining deep cuts in military and domestic spending with higher taxes on the wealthy.”
I don’t remember seeing any cuts to Medicare and Medicaid though, which means not quite good enough but on the right track.
Left wing management
June 24th, 2011
12:44 pm
More from Ezra Klein on our gravediggers in Washington:
Cantor is putting personal power before country here, and in a very dangerous way. If Boehner actually does manage to cut a decent deal despite Cantor’s effort to throw him under the bus, he may not hold on as leader of his party, but unlike Cantor, he’ll deserve to. For better or worse, this is when we learn whether anyone on the Republican Party’s leadership team is actually prepared to lead.
Echoes of Sarajevo, 1914.
http://www.washingtonpost.com/blogs/ezra-klein/post/why-eric-cantor-wont-make-the-budget-deal/2011/05/19/AG3FYPhH_blog.html?hpid=z1
RB from Gwinnett
June 24th, 2011
12:45 pm
“American’s understand the most basic principle of economics – you can’t spend what you don’t have.’ ”
I take exception to that premise. A large portion of democratic voters goes through life spending other people’s money every day of the week in the form of food stamps, free lunches, section 8 housing, etc, etc, etc. They have no qualms about it and in fact demand their gravy train continue. In essence, they are spending money they don’t have.
Anybody else see the problem with that….??????
Aquagirl
June 24th, 2011
12:45 pm
American’s understand the most basic principle of economics – you can’t spend what you don’t have
I somehow doubt most American’s(sic) paid cash for their houses and cars.
The Leg Lamp is a “major award”….
June 24th, 2011
12:46 pm
Jay
June 24th, 2011
12:41 pm
Let’s assume for a minute what you said is true. If there is indeed $2 trillion in “cuts”, and I accept that term loosely when I hear it from a politician, would the upcoming budget be balanced? Would it start to put a dent into our national debt?
Now as far as “compromise” is concerned, I heard where the dems refuse to take tax increases off the table. IF that is truly the case, then where is the compromise from the left?
The Leg Lamp is a “major award”….
June 24th, 2011
12:47 pm
Aquagirl
Jun 24th, 2011
12:45 pm
But try borrowing money every year that exceeds the value of your home.
Dave R.
June 24th, 2011
12:48 pm
“Chris – first of all, the government is not a business. it’s not there to make money, it’s there to provide a service to the people.”
Correct. If government WERE a business, it would have been OUT of business decades ago. And while it IS there to provide a service, it is SUPPOSED to do so by being revenue to cost-neutral, NOT continuous and ever-increasing deficits.
Brosephus
June 24th, 2011
12:48 pm
The GOP leadership is more worried about saving their own political asses instead of saving the country. It’s funny as hell that people can defend someone who gets everything they want and then declare no compromise when they have to give up something in return. There is a reason that parties have the majority and minority label. I don’t recall the GOP giving in to every Democratic Party idea and suggestion when the Left was the minority party. To expect the Dems to do that is pure bullsh*t, and anybody who believes that the Left should needs to wake the hell up.
I guess some won’t be satisfied until we’re all living in cardboard boxes. At least that will solve two of our problems. There will be no more entitlement spending after the economy collapses and the country disintegrates. Then, when we’re all destitute, the illegals will run for the border in droves to return home where their standard of living will be much better.
Doggone/GA
June 24th, 2011
12:48 pm
“Anybody else see the problem with that”
Anytime you borrow money to buy something, you are both spending money YOU don’t have…AND spending someone else’s money
Chris
June 24th, 2011
12:48 pm
@Aquagirl – I don’t doubt that either, but I am sure most don’t (or wouldn’t) go out and buy a Porsche when they can only afford a Hyundai. Then again, there was that housing crisis.
1811/1801 - 0311/0317
June 24th, 2011
12:48 pm
Speaking of marching:
http://www.youtube.com/watch?v=rxrmr4nJgqA&feature=related
Granny Godzilla
June 24th, 2011
12:48 pm
“Today, the president set a goal of reducing federal deficits by $4 trillion over the next 12 years. He called on Congress to establish a mechanism that would trigger across-the-board spending cuts in 2014 if the nation’s debt as a share of gross domestic product hasn’t stabilized. He even proposed to cut spending on Medicare and Medicaid, two safety-net programs held near and dear by Democrats.
Read more: http://www.portfolio.com/business-news/2011/04/13/obama-lays-out-plan-to-cut-deficit-by-4-trillion-dollars/#ixzz1QDGNJdyJ
The Leg Lamp is a “major award”….
June 24th, 2011
12:48 pm
RB from Gwinnett
June 24th, 2011
12:45 pm
The left’s retort will be that you favor rich people and want poor people to be tossed out on the street and left to starve.
Swami Dave
June 24th, 2011
12:49 pm
The historical reality remains……
For over 30 years, every so-called deficit reduction “compromise” has included tax increases (instituted fully and immediately) with promises of spending cuts (usually scheduled incrementally with the majority in “out-years”). This reality occurring under Republicans and Democrats alike.
In the end, taxpayers held up their end of the bargain; spending cuts rarely if ever occurred with the actuality being that spending continued to INCREASE at rates many times far higher than the rate of inflation. The dependency mob via their elected representatives stymied any and all attempts to hold to any measure of fiscal austerity – or even meet the “compromise” obligations that would have been required.
To that end, tax increases SHOULD be off-the-table until such time as the beneficiaries of government spending and their power-acquiring representatives commit and follow through for real fiscal spending restraint.
Frankly, America’s Taxpayers have shown amazing restraint and patience after having been lied to for over a generation.
Our current economic situation lies at the feet of those who expect others to do for them what they will not do for themselves. Until they learn to do with what they already get, there is no reason for America’s Taxpayers to provide anymore.
In the same vein, any tax increases that ARE included in a future compromise should be incrementally implemented and directly tied to actual reductions in spending on that side. If the spending cuts do not occur, the tax increases are void as well.
-SD
Truth, History, and Common Sense refute Liberalism!
stands for decibels
June 24th, 2011
12:50 pm
Also, like Atrios said. Emphasis mine.
“It is negotiating, just good negotiating (and, on the other side, bad negotiating). People and the press should highlight what Republican negotiating is so people can judge, but it’s wrong to say it isn’t negotiating. ‘Give me everything I want’ is negotiating when it works.“
Finn McCool
June 24th, 2011
12:50 pm
I disagree, the government is a business and it’s goal is to make money (via growing the economy and reinvesting it into infrastructure to perpetuate that growth).
What? The government exists with or without the economy as long as the people let it. We could go to a barter system and the government would still exist.
It’s job isn’t to make money, it’s job is to provide the environment in which humans can interact – and in the US we base that environment on trade and property rights. Completely alter the economy (and I am only talking about one economy we have going on here) adn that system of government cans still prosper.
Joe Mama
June 24th, 2011
12:50 pm
Leg Lamp — “If there is indeed $2 trillion in “cuts”, and I accept that term loosely when I hear it from a politician, would the upcoming budget be balanced? Would it start to put a dent into our national debt?”
You appear to be conflating balanced budgets with ‘putting a dent into our national debt.’
A balanced budget will not address our huge outstanding deficit beyond the principal and capital repayments already negotiated. It will require budget SURPLUSES to ‘put a dent into our national debt.’
The Leg Lamp is a “major award”….
June 24th, 2011
12:50 pm
Brosephus
June 24th, 2011
12:48 pm
“The GOP leadership is more worried about saving their own political asses instead of saving the country.”
BAAAAHAHAHAHAHAHAHAHAHA!! And Obama is bringing troops home, against the wishes of his generals and much of the Afghan leadershipe, by next summer…….just in time for the election.
Until you accept the fact that “politics” is played by both parties you’ll continue to be in the dark.
Brosephus
June 24th, 2011
12:51 pm
Now as far as “compromise” is concerned, I heard where the dems refuse to take tax increases off the table. IF that is truly the case, then where is the compromise from the left?
The compromise from the left was obviously in the spending cuts, which the left isn’t ususally gung ho about. After all, they are the party of “Big Government”, “Huge Spending”, “Tax & Spend”, and whatever other labels that gets applied to them. If they’ve agreed on spending CUTS, does that not count as compromise? I know your thinking is better than that ^^^^….
getalife
June 24th, 2011
12:51 pm
2 trillion is a good compromise.
Lets pay the terrorists to get our economy back and move on from this insanity.
USinUK
June 24th, 2011
12:51 pm
Chris – 12:43 – I see services for the people to be everything from infrastructure to drug/food safety to defense, education and so forth – all of that does “promote the general welfare” (http://www.youtube.com/watch?v=Q_TXJRZ4CFc) … and, yes, I do think that providing a SAFETY NET is part of that. To me, it is indefensible for the richest country in the world to let the poorest flounder without help.
while I understand what you’re saying about growing the economy, that’s neither a good nor a service – it’s an environment. so I’ll be a little clearer – the goal is not a business in that it is not driven by generating profits for the entity, itself, the same way Coca Cola (for instance) is.
Jay
June 24th, 2011
12:52 pm
“Now as far as “compromise” is concerned, I heard where the dems refuse to take tax increases off the table. IF that is truly the case, then where is the compromise from the left?”
That’s just beautiful, Leg. Democrats refusing to taxes off the table = refusing to compromise? In other words, if Democrats refuse to give Republicans everything they want, Democrats are refusing to compromise.
Well done sir. Well done.
The Leg Lamp is a “major award”….
June 24th, 2011
12:52 pm
Joe Mama
June 24th, 2011
12:50 pm
And that’s exactly what I was alluding to. Budget cuts will not be effective is they simply allow us to “balance the ledger” for just one year. They have to be substantial enough to begin chipping away at the national debt.
Mr Right
June 24th, 2011
12:53 pm
Let us recall that President Obama:
“offer[ed] a plan to trim borrowing by $4 trillion over the next 12 years by combining deep cuts in military and domestic spending with higher taxes on the wealthy.” [Washington Post, 4/13/11]
With a deficit of $1,700,000,000,000.00 in 2010, lets see 12 years would be $20,400,000,000,000.00 so cutting $ 4 trillion is like a drop in the bucket!
Chris
June 24th, 2011
12:53 pm
@Finn McCool – money is the instrument of our current barter system and the method to which we interact with each other in terms of products and goods.
Brosephus
June 24th, 2011
12:53 pm
dB
I like that!!!
USinner
I rock???
1811/1801 - 0311/0317
June 24th, 2011
12:54 pm
House Mulls Cutting Off Libya Mission
AP
Headline: “Frustrated lawmakers are poised to deliver its strongest rebuke yet to Obama over his handling of the U.S. military intervention in Libya, as House votes to pull funding of U.S. operations in Libya.”
WASHINGTON — The House on Friday resoundingly defeated a resolution that would have given President Barack Obama limited authority to continue the American involvement in Libya in the NATO-led operation against Moammar Gadhafi’s forces.
Just 123 members of the House voted for the authorization measure, while 295 — including 70 Democrats — voted against it.”
Headline: “Mexican Soldiers Reportedly Cross Border Into US”
“Mexican troops crossed the border into the United States Thursday, KGNS-TV reported Friday.
A convoy of three military trucks loaded with soldiers and weapons crossed the border at Bridge No. 2 in Laredo, Texas, the station reported. Customs and Border Protection investigators told KGNS-TV they spoke with Mexican authorities after being alerted that the military convoy was heading in their direction. Mexican officials say the soldiers didn’t know the area and got lost. An investigation into the incident is continuing.”
Larry
June 24th, 2011
12:55 pm
Jay
Can’t the same be said for Obama “His political identity and power flow almost entirely from his opposition to taxes, and he knows that the moment he wavers in that opposition, he will be stripped of his power and replaced by someone of sterner faith. To a political movement built upon the rejection of compromise, compromise is suicidal.”?
Mr Right
June 24th, 2011
12:56 pm
Jay
June 24th, 2011
12:52 pm
Duh Jay, I know you might think compromise is a one way street but it isn’t.
The Leg Lamp is a “major award”….
June 24th, 2011
12:56 pm
Jay
June 24th, 2011
12:52 pm
Your smugness oozes through on a daily basis. You trash the right because the don’t “compromise” with your beliefs, however, if the dems wish to hang on to “tax increases” then you’re good with it. Please tell me ONCE where the dems even discussed eliminating tax increases in this current budget negotiation?
Maybe in your left leaning world refusing to budge on your big issue is considered compromise, but not in mine. You just choose to say “ooh, ooh, look what the other side did”. Excellent negotiating ploy…….
Granny Godzilla
June 24th, 2011
12:56 pm
Mr Right
June 24th, 2011
12:53 pm
Let us recall that President Obama:
“offer[ed] a plan to trim borrowing by $4 trillion over the next 12 years by combining deep cuts in military and domestic spending with higher taxes on the wealthy.” [Washington Post, 4/13/11]
With a deficit of $1,700,000,000,000.00 in 2010, lets see 12 years would be $20,400,000,000,000.00 so cutting $ 4 trillion is like a drop in the bucket!
Glad to see you can do some math. Now here’s an equation
the GOP wanted 6 trillion in cuts so…..6 trillion would be a drop in the bucket with 1/3 bigger drop. WOW you really made a big difference there! WHOOPPEE!
You are just tooooo cute!
Brosephus
June 24th, 2011
12:57 pm
Until you accept the fact that “politics” is played by both parties you’ll continue to be in the dark.
I guess it’s obvious that you haven’t paid attention to what I post here. Once again, just for you….
Jackassery Knows No Political Party™
I’ll even sell you one of my t-shirts or bumper stickers once I get them made, if you want one……
josef
June 24th, 2011
12:57 pm
” Mexican officials say the soldiers didn’t know the area and got lost. An investigation into the incident is continuing.”
Maybe they should have hired a coyote…
AmVet
June 24th, 2011
12:57 pm
“The left’s retort will be that you favor rich people…”
Well, since the facts are that corporate welfare and welfare for the wealthy now dwarfs welfare for the poor, you might just want to wake up to that reality, yourself…
Joe Mama
June 24th, 2011
12:57 pm
Leg Lamp — “And that’s exactly what I was alluding to. Budget cuts will not be effective is they simply allow us to “balance the ledger” for just one year. They have to be substantial enough to begin chipping away at the national debt.”
How myopic.
Revenue increased PLUS budget cuts are required. It’s not going to happen just with budget cuts.
Left wing management
June 24th, 2011
12:58 pm
Since apparently the reality of what I posted above from Steve Benen is not sinking in among some of our thicker hided RepubliCONs here, I’ll post again:
… when push comes to shove, I suspect some very wealthy, very powerful conservatives will call congressional Republicans and say, “Time to stop screwing around.” Wall Street, the Chamber of Commerce, the National Association of Manufacturers, and dozens of other power business lobbying groups want the debt ceiling raised, and these are the kind of folks who tend to give Republicans marching orders that get followed.
http://www.washingtonmonthly.com/index.php
Now. What I want to hear is, what do you folks here have to say about this part of your coalition which clearly does NOT want a default? They are the most powerful moneyed interests in your right wing coalition and yet they clearly DO want to the debt ceiling raised and don’t particularly care about the tax cuts the Tea Party is so adamant about.
How do you reconcile this? Anyone?
Chris
June 24th, 2011
12:58 pm
@USinUK – CocaCola, like the government, must reinvest in itself for machines, workers, etc to continue to grow, same principle as government. And I disagree on the safety net. For people who CAN’T help themselves sure (metnally disabled, physically disabled etc.) but for people who DON’T help themselves…. that I have a problem with.
Joe Mama
June 24th, 2011
12:59 pm
1811 — “Mexican troops crossed the border into the United States Thursday, KGNS-TV reported Friday.”
Don’t sweat it. As I said on the previous thread, they’re only here for our rotting produce.
josef
June 24th, 2011
12:59 pm
BROSEPHUS
Put me down for one…oh, what the hell, what’s the wholesale price…that’s one just about any of us would pay for! Tooo good!
Mr Right
June 24th, 2011
1:00 pm
You are just tooooo cute
Thanks Granny
getalife
June 24th, 2011
1:00 pm
-100.
How much did we lose on this one?
La la land.
USinUK
June 24th, 2011
1:01 pm
Bro – you totally rock –
1811/1801 - 0311/0317
June 24th, 2011
1:01 pm
getalife:
From down below ……………
NICE DODGE !
Of course military leaders want more troops. They want to win.
But that was not the POINT of my post that you so conveniently ignored.
They are supposed to salute and move on ………… instead, it can be argued they are being insubordinate (hiding behind the Congressional apron) by making their feelings known to the public.
McArhtur got cashiered for that.
This really is very unusuall coming from our head military leaders ………… a direct slap at the wisdom/decision of the CIC.
What say ye???
1811/1801 - 0311/0317
June 24th, 2011
1:02 pm
Joe Mama:
Where’s Pershing when we need him?
RB from Gwinnett
June 24th, 2011
1:02 pm
Jay, the GA 400 toll is a perfect example of why compromising with your incessant request for tax increases should not be given into.
We didn’t start this taxation thing at 35%. People would have revolted if the Feds had shown up one day and said “we’re imposing a 35% tax rate”. It starts small and people keep adding “things we can’t do without” a nickle or dime at a time and soon we’re at 35%. They duped the people with this social security garbage and you still think it’s a great idea. Why? If they had been honest with the people in the beginning and said “we’re going to take 7% of your paycheck, promise you some of it if you live long enough to get it, keep it if you don’t, spend all of it on other things the government doesn’t have a means of funding but wants, and will pass the debt of paying you back on to your kids and grandkids of some future generations after we’re long gone” do you think anybody would have agreed to it?
Do you think anybody would have agreed to the 400 toll if they had said, “we’re going to put up a toll to collect money here forever because we can and there is nothing you can do to stop us because when we get a revenue source started, we’re never going to give it up?”
Excuse us if we’ve heard that “we just need a little more in taxes from the rich” crap a few too many times, Jay. When are you sending in that “few thousand more”, BTW?
Finn McCool
June 24th, 2011
1:03 pm
Maybe they should have hired a coyote…
Senor Andy!
Paulo977
June 24th, 2011
1:03 pm
Negotiation….. NOT “Give me all I want”………
“Agreement on some issues and interests. People must be able to agree upon some common issues and interests for progress to be made in negotiations. Generally, participants will have some issues and interests in common and others that are of concern to only one party. The number and importance of the common issues and interests influence whether negotiations occur and whether they terminate in agreement. Parties must have enough issues and interests in common to commit themselves to a joint decision-making process.”
USinUK
June 24th, 2011
1:03 pm
Chris – must be nice to be you. most people are one serious illness away from bankruptcy. one serious accident away from personal disaster.
http://www.ft.com/cms/s/2/1a8a5cb2-9ab2-11df-87e6-00144feab49a.html#axzz1QDKKZDIa
1811/1801 - 0311/0317
June 24th, 2011
1:04 pm
“There was a knock on the door this morning.
I opened it to find a young man in a suit and tie standing there who said:
“Hello sir, I’m a Jehovah’s Witness.”
I said “Come in and sit down.”
I offered him coffee and asked,
“What do you want to talk about?”
He said, “Beats the crap out of me,
I’ve never gotten this far before.”
getalife
June 24th, 2011
1:06 pm
“What say ye???”
The President decided and they will do their jobs.
Joe Mama
June 24th, 2011
1:06 pm
1811 — “He said, “Beats the crap out of me, I’ve never gotten this far before.”
Now thass phunni!
USinUK
June 24th, 2011
1:07 pm
Scout – 1:04 – now, that’s funny
Uncle Jed
June 24th, 2011
1:07 pm
getalife
June 24th, 2011
12:11 pm
Playing politics with a default is insane.
DeMint said if they raise it, those gop are gone.
They get more radical everyday and it has to stop.
Where is wall street and the coc?
corporate media gives the gop a free pass on this insanity.
The uncertainty alone should have them screaming but nobody is.
Not even the dems.
+++++++++++++++++++++++++++++++++++++++++++++++++++=
Now that right there is rich, as in composted manure. Nobody’s screaming…that’s rich right there.
Dave R.
June 24th, 2011
1:09 pm
“The GOP leadership is more worried about saving their own political asses instead of saving the country.”
Disagree, Brosephus.
I believe that certain GOP leaders have finally seen the light and are willing to do the right thing for our long-term future in reigning in spending.
Let’s look at this problem logically, and using a long-term lens.
Why are markets supposedly jittery right now? Because we might actually default on some of our debt.
Why is that such a problem for the markets? Because the size of our debt is so large, the implications are now worldwide if we do default on even a portion of it.
Why is our debt so large? Because both GOP and Dem leadership over the past 30 years have used government as a means to attract and retain power over citizens through the use of government programs.
What is the ONLY solution to this problem? Reduce the debt. Adding more debt to an existing debt that has markets squirrel-y will only make markets worse.
Why are spending cuts more important than increased revenues right now? Because reduced spending has never occurred in the history of this nation – only increased taxes. And with every increase in taxes has come MORE spending – never reduced debt.
The only way to fix this problem is to BREAK the CYCLE.
Cut spending FIRST, to show us that you are serious about it. We’ll discuss increased revenues AFTER that.
getalife
June 24th, 2011
1:10 pm
“Nobody’s screaming…that’s rich right there.”
I remember when the markets did not like uncertainty.
I guess it is okay now.
Chris
June 24th, 2011
1:10 pm
@USinUK – It is nice being me. I pay for my own health insurance and car insurance. I distinguish myself at my place of work to keep my job. It’s all part of personal responsibility for oneself and their way of life.
Aquagirl
June 24th, 2011
1:11 pm
since the facts are that corporate welfare and welfare for the wealthy now dwarfs welfare for the poor,
Gotta keep those Lockheed Towanda-Lakeesha-J’Donte-22’s flying, y’know.
USinUK
June 24th, 2011
1:11 pm
Chris – and there are lots of similar people who do the same … then are diagnosed with cancer, their insurance refuses to pay and they lose their house.
Paulo977
June 24th, 2011
1:12 pm
” Mexican troops crossed the border into the United States Thursday, KGNS-TV reported Friday”
ooooooooooooh we are being attacked …with the weapons we sold them!!!!!!!
The Leg Lamp is a “major award”….
June 24th, 2011
1:12 pm
Joe Mama
June 24th, 2011
12:57 pm
Myopic? Nah, just simple math. Here, I’ll make it easy for you. If you have a “whopping” $1,000 in debt, and your intake and outlay are, say, $600 per month, then you’ll never get rid of your debt. However, if your reduce your outlay by $200 per month, then you can use that surplus to help pay down the debt, and you can do so without increasing your intake.
Questions?…..Buehller…….Buehller…..
Dave R.
June 24th, 2011
1:12 pm
Scout @ 1:04
jewcowboy
June 24th, 2011
1:12 pm
“IF that is truly the case, then where is the compromise from the left?’
Someone needs to learn what the term “compromise” means…actually it sound like almost an entire political party needs to learn this term.
Uncle Jed
June 24th, 2011
1:13 pm
RB, Leglamp, as Cantor himself has acknowledged, the negotiations to date have identified some $2 trillion in cuts that the two sides have agreed upon.
$2 trillion in cuts.
Versus how much in tax increases? Zero?
Yes, one side has tried to compromise; the other side refuses. The evidence is overwhelming.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
“$2 trillion in cuts that the two sides have agreed upon.”
Cue graphic: TWO SIDES=COMPROMISE
It is interesting to note that so many on the left side of the argument try to convince others that all agreements to cuts are the product of unilateral democrat compromise and all tax increase opposition is unilateral republican failure to compromise. IT ALL TAKES COMPROMISE.
getalife
June 24th, 2011
1:13 pm
They HAVE cut SPENDING Dave.
This is 2 trillion more.
Now about increasing revenue……
The Leg Lamp is a “major award”….
June 24th, 2011
1:14 pm
Aquagirl
June 24th, 2011
1:11 pm
…and we have to keep those thousands of middle class citizens and employed. Oh wait a minute, you don’t CARE about the “dying” middle class. Now it makes perfect sense.