Democrats & Liberals Archives

Slowing Economy Adds Fuel To Debt Limit Fire

GDP grew an estimated 1.3% and 0.4% in the last two quarters according BEA. This should be a warning to Congress that it’s past time to stop fooling around and pass a clean debt limit increase.

It should be clear to everyone that we are dangerously close to slipping into negative GDP growth and a possible second recession even without the threat of default and a revised credit rating. Any short disruption in consumer spending, job growth, or government finance could get the dominoes falling again.

There are two paths forward now. Congress can come together on a bill that will raise the debt limit and change the deficit trajectory all in one swoop. Or Congress can pass a debt limit increase bill and then deal with the deficit trajectory starting soon after. This late in the game and with the two sides not able to come together at all, the second option looks a lot more feasible.

In the short term we can avoid a downgrade of our credit rating with simply an increase in the debt limit and no default. To anyone thinking that our politicians will simply stop there and do nothing about the deficit we have the statement from Moody's to force our hand. We can preserve our credit rating only temporarily. We'll still be on the hook to come to a feasible plan on spending and revenues.

As it is the GOP House is trying to push through a bill that clearly won't pass the Senate or survive a veto. Leader Reid is is pushing through a bill that won't make the House happy either. Both bills will be harmful to our economic growth either way.

If I had my way I'd push through the clean debt limit increase today, take a few days off for the weekend, and then get leadership together early Monday morning and start hammering out a real compromise bill that will change our deficit trajectory without harming economic growth at a time when it's already grinding to a halt.

I can dream, can't I?

Posted by Adam Ducker at July 29, 2011 1:08 PM
Comments
Comment #326677

adam

“This should be a warning to Congress that it’s past time to stop fooling around and pass a clean debt limit increase.”


actually it should be a warning to congress that failure to drasticly reduce spending will make the deficit much worse. keep in mind there was a clean debt limit bill voted on in the house, and no one wanted to be on record as supporting more borrowing without serious reductions in spending. it’s time to break the gov’t of its reckless spending addiction.

Posted by: dbs at July 29, 2011 2:46 PM
Comment #326680


Right after they eliminate the Bush tax cuts.

Posted by: jlw at July 29, 2011 3:15 PM
Comment #326682

“If I had my way I’d push through the clean debt limit increase today, take a few days off for the weekend, and then get leadership together early Monday morning and start hammering out a real compromise bill that will change our deficit trajectory without harming economic growth at a time when it’s already grinding to a halt.”

If I had my way, I’d hold out on raising the debt ceiling until about 4 Trillion real dollars was cut from the budget.

Posted by: tdobson at July 29, 2011 3:30 PM
Comment #326684

If I had my way, I would lock future spending to last years levels and the CBO would show a savings of $9 trillion over the next 10 years. The TP republicans are being asked to pass the same old hocus-pocus numbers game that has always been played. There is an automatic (up to 9%) increase in every department’s spending every year. Retirees on SS and Railroad Retirement have not gotten a cost of living increase in over two years because it has been determined there is no inflation. But, the government machine requires a cost of living increase every year under the base line budget. Holding the budget at last years amount would save us $9 trillion over the next 10 years. It’s not that hard to do? But when these cost of living increases are attempted to be dealt with, theleft starts there same old scare tactics of education will suffer, babies will die, and old people will suffer. When in reality, there is no cut; only a cut in the increase. So these numbers games are an absolute lie on both sides. Only the conservative TP is trying to hold the line.

Posted by: Mike at July 29, 2011 4:06 PM
Comment #326686

Mike,
Where do you get your numbers? Personally, I like the idea of a one-year spending freeze, or if for more than a year, locked into a formula that gives cost of living adjustments at a fraction below inflation. Combine this with a repeal of the Bush tax cuts, and it would make a huge difference pretty quickly.

Posted by: phx8 at July 29, 2011 4:56 PM
Comment #326689

I just want any deficit reduction plan to acknowledge that the root our the problem is the recession and not a huge growth in spending. It’s not quite time to worry about our deficit to the degree the Tea Party wants us to and they’re living in a fantasy land when they think we’re taxed enough already.

It’s a shame that the message war has been won by the GOP on the debt and deficit giving them an historic opportunity to blast holes on our social safety nets to render them impotent. To top it off they’ll do it with support from the Democrats and Obama because Democrats are afraid to be on the wrong side as usual.

Posted by: Adam Ducker at July 29, 2011 5:26 PM
Comment #326690

jlw

The Bush tax cuts are past. They are history. They ran out of time. Obama reinstituted them. They are now Obama tax cuts.

Adam

“deficit trajectory”
Others have used this phrase here on WB. The word did not show up until this debt debate took legs. That means it is a talking point from the left.
What do you and the left think this means?
I know what the coded message means to me, but I would like to have your take on it.

Posted by: tom humes at July 29, 2011 5:30 PM
Comment #326692

Tom,
If I may, “deficit trajectory” is the phrase used by Moody’s, a rating agency, when they put US debt under review.

Posted by: phx8 at July 29, 2011 5:41 PM
Comment #326693

“I just want any deficit reduction plan to acknowledge that the root our the problem is the recession and not a huge growth in spending.”

The root of our problem IS runaway SPENDING. We are spending more than we are bringing in.

Posted by: tdobson at July 29, 2011 6:04 PM
Comment #326694

If I have $20 in the bank and I write a check for $25, please tell me why that is NOT a problem.

Posted by: tdobson at July 29, 2011 6:07 PM
Comment #326695

Tom Humes:

I second what Phx8 wrote. How can two words be a talking point anyway?

TDobson:

Our problem is we have obligations to our own people, global financial institutions and creditors abroad, and a host of other spending obligations that pre-exist the condition the recession has us in.

It would be like losing your job today and then freaking out at how much you owe in bills tomorrow. You then call for cutting the spending you do on the mortgage, credit card bills, groceries, utilities, gasoline, etc. You can cut some of that of course but you still have certain obligations to meet to survive and not lose everything you own. The kids still need to eat and still need a place to sleep.

Posted by: Adam Ducker at July 29, 2011 6:34 PM
Comment #326696

“It would be like losing your job today and then freaking out at how much you owe in bills tomorrow. You then call for cutting the spending you do on the mortgage, credit card bills, groceries, utilities, gasoline, etc. You can cut some of that of course but you still have certain obligations to meet to survive and not lose everything you own. The kids still need to eat and still need a place to sleep.”

That’s a bad analogy, Adam. If I lose my job today, those obligations might come due tomorrow, but If I have no money to pay them, I will still lose everything. A better analogy might be as follows: I have no money today but am expecting $25 tomorrow, so I promise $5 to the grocery store for food, $5 to my landlord for rent, $5 to the power company, $5 to the phone company and $5 to the bum on the street. Tomorrow comes and I only get $20. Who do I not pay? Or do I go to the finance company and borrow money.

Posted by: tdobson at July 29, 2011 6:51 PM
Comment #326702


The taxpayers also have to pay, at Republican insistence, Exxon/Mobil rather than having the consumers do that. At Republican insistence the taxpayers have to continue to pay to police the world.

In addition, the taxpayers have to continue to pay $400 per gal. for military aircraft fuel in Afghanistan. Just one example of how the taxpayers are taken to the cleaners.

Help may be on the way, Apple has entered negotiations to purchase the government from Exxon/Mobile.

Posted by: jlw at July 29, 2011 7:31 PM
Comment #326705

Right after they eliminate the Bush tax cuts.

Posted by: jlw at July 29, 2011 03:15

Sorry, that’s no longer true. As tom pointed out, since obama signed the bill continuing the cuts, they now belong to him just like the economy and job numbers do as well.

Posted by: Royal Flush at July 29, 2011 8:24 PM
Comment #326707

Perhaps someone on the left could explain to me: why has Obama’s approval polls dropped to 40%?

If the Republicans are guilty of everything that Obama, the Democrats, and the MSM are telling America, then why is the president falling in the polls? I know the Congress approval ratings are low, and the president has been on the TV every day pitching his plan (or lack thereof), and we are inches from Armageddon, next Christmas will be ruined, the US economy is going to shut down the flusher; but why is Obama dropping?

http://www.gallup.com/poll/148739/Obama-Approval-Drops-New-Low.aspx

In fact, for the past month, while the president has been showing his face on TV every single day, Rasmussen Polls have steadily show the approval index to be a -10% up to a steady -18 to -21%. Some may not agree with Rasmussen, but it is consistent with Gallup.

The CNN/Opinion Research poll of a week ago showed Obama with a -9, 45% approval and 54% disapproval.

Pew Research has a 44% approval, 48% disapproval on 7/24/11

At a time when Obama is trying to show himself in control, he is losing.

A generic ballot shows any Republican beating Obama by 6%; which is not that much, but the same poll shows Obama with only 42% of the vote.

I personally believe if Reid manages to who-doo a budget bill through and the president signs it; and the Americans find out once again that they have been screwed, the shit is gonna hit the fan.

But, my opinion is like many others posted on here, they are like buttholes, everybody has one.

Posted by: TomT at July 29, 2011 8:57 PM
Comment #326708

“Mike,
Where do you get your numbers? Personally, I like the idea of a one-year spending freeze, or if for more than a year, locked into a formula that gives cost of living adjustments at a fraction below inflation. Combine this with a repeal of the Bush tax cuts, and it would make a huge difference pretty quickly.”

Posted by: phx8 at July 29, 2011 04:56 PM

phx8, here is a link:

http://www.schneiderdowns.com/baseline-budget-deficit-reduction

http://investmentwatchblog.com/baseline-budgeting-this-is-the-reason-spending-always-has-to-go-up/

http://investmentwatchblog.com/baseline-budgeting-makes-real-cuts-impossible-in-washington/

Posted by: Mike at July 29, 2011 9:15 PM
Comment #326711

jlw-

If eliminating the Bush Tax Cuts was so important, why wasn’t it done in December when Democrats controlled House, Senate, and White House?

Senate Democrats voted 43-13

House Democrats voted 139-112

Democratic President signed the bill.

Posted by: George at July 29, 2011 9:56 PM
Comment #326715

TomT: “If the Republicans are guilty of everything that Obama, the Democrats, and the MSM are telling America, then why is the president falling in the polls?”

Public sentiment doesn’t always have to be rational or fact based. In fact I might argue it’s rarely that way. That being said, Obama’s rating is still coming down from the Osama death bump. He’s been hovering between 40% and 50% almost his whole time in office. The generally negative sentiment about the outlook of the country is dragging it down more than any specific factor like the debt negotiations.

Posted by: Adam Ducker at July 29, 2011 11:07 PM
Comment #326717

Obama hasn’t helped himself by offering to negotiate on Social Security and Medicare. He hasn’t helped himself by buying into the free market/free trade economic philosophy. It’s great for re-inflating the Bush economy, but this philosophy, epitomized by Geithner & Summers, still suffers the same underlying fundamental economic flaws. It does not generate jobs, at least, not within US borders. Wages remain flat or worse, and the intent seems to make us “competitive” with Chinese workers, who earn 30 cents per hour. Obama successfully rescusitated the economy after the disastrous failures of 2007-2008, and that’s no small thing. He saved the country from Depression; however, he does not seem capable of pushing an agenda that will result in anything more than another “jobless recovery,” much as we saw between the first and second Bush recessions.

Obama traded an extension of the Bush tax cuts for a series of less important legislation along with renewing unemployment compensation. Good that he cares about suffering Americans, but a bad trade.

The pace of withdrawal from Iraq and Afghanistan has been much too slow.

In general, Obama has governed like a moderate Republican. As soon as a Moderate Party comes into being, Obama will do much better in the polls.

Posted by: phx8 at July 30, 2011 12:11 AM
Comment #326724

adam

“You can cut some of that of course but you still have certain obligations to meet to survive and not lose everything you own. The kids still need to eat and still need a place to sleep.”


you also had a responsability to consider that at some point revenue could be interupted by the very thing you speak of, and form a plan just in case. while you can’t control everything you can still be responsable, and not borrow and keep borrowing to buy things you’de like to have but can’t afford hoping that worst case scenario will never occur. to put it bluntly, a lack of planning on your part does not constitute an emergency on mine. the senate has not passed a budget in 800 days they just keep spending like a person living paycheck to paycheck. and at the same time running up more credit bills with no real plan for eventually paying them off. huge problem.

Posted by: dbs at July 30, 2011 8:48 AM
Comment #326731

the senate has not passed a budget in 800 days they just keep spending like a person living paycheck to paycheck. and at the same time running up more credit bills with no real plan for eventually paying them off. huge problem.

Posted by: dbs at July 30, 2011

Good points. Living from paycheck to paycheck is exactly what NOT increasing the debt limit will force. And, I don’t consider that to be bad. It is the next best thing to a Balanced Budget Amendment.

Posted by: Royal Flush at July 30, 2011 4:01 PM
Comment #326733

While we may not all wake up to the end of the world August 2nd we certainly are risking the future of our economy and our credit by proceeding forward as the conservatives are doing.

It’s too late now. We’re in fire fighting mode from here on out. We’ve got no time to debate who caused the fire or how to stop fires in the future. We just need to put it out before it burns down the whole damn neighborhood.

The gross reality of this is that the GOP has drawn a line in the sand in order to achieve a set of policies that will slow our economic growth and weaken our recovery. In the process of holding out for those goals they are risking a second recession. This is why we can’t trust the GOP or the Tea Party with the future of our country no matter what they think of their intentions.

Posted by: Adam Ducker at July 30, 2011 4:11 PM
Comment #326736


George, the Democrats voted for two of the Bush tax cuts originally. A majority of the Senate Democrats and a significant number of the House Democrats voted for the War in Iraq. A large majority of the Democrats vote to deregulate the financial markets.

The results were, $5 trillion in debt, a collapse of our economy, and the current mess we are in now. That includes millions of jobs sent overseas and millions of illegal immigrants.

A majority of the American people did not want to go to war in Iraq despite Cheney’s manufactured intelligence. A majority wanted those tax cuts to expire.

The solution, go after the poor and the middle class. It would be best if the Democrats and Republicans concentrate on getting rid of the government policies and regulations that helped create the middle class. Like unions, those laws have outlived their usefulness. The middle class is consuming resources that are needed by third world workers.

The people may not be getting the government they want, but they are certainly getting the government they voted for.

It is hard to ignore that a majority of the people have not had representation in a long time and there is little they can do about it because they have no options but the two parties and the current election process is tailor made for the wealthy members of our society. Of course we do exercise our options to complain and scapegoat.

Phx8, I do think you are right that if Obama was the leader of the Centrist Republican Party his approval rating may be higher. I think it would be an excellent idea for liberals to rename the Democratic Party the Center Right Republican Party. That is what it has become. When a spade is a spade, call it a spade.

But, why bother, progressives can do little other than drag Obama’s approval rating down. I think progressives should recognize the writing on the wall and pull their support for Obama and the Democratic party. Just think of how much better things would go if Obama, and Pelosi did not have to deal with the left. They could compromise with the tea party to their hearts content. I don’t see any evidence that liberals are disappointed in Obama’s performance. Progressives yes, liberals no.

IMO, there has never been a time in history where good governance and wise decision making have been more important.

I would like to think the the world can come together and create the new technologies, alternative and sustainable energy sources and sustainable growth, but the great super power, the leader of the world is greatly divided with a majority of it’s citizens having their heads planted up their own rears in their private little dream worlds. The clock is ticking down. It seems to me that what is most important to a majority is, will I still have a job and will I be able to continue to consume at the level I am accustomed to. Looks like the world may have to go it alone.

I have heard that the current economic policies can sustain about 2 billion people at the consumption level of the U.S. We are at 7 billion and counting. Lurking just around the corner is 8 billion.

Our government has become the biggest joke in the world.

I think that the American people have pretty well proven that democracy does not work. We complain, we scapegoat and we enable, but we do not demand the changes needed. And, I don’t think they should assume the government would take heed anyway. They are paid not to.

Posted by: jlw at July 30, 2011 4:35 PM
Comment #326738

jlw writes; “I think that the American people have pretty well proven that democracy does not work.”

False. The fact that big issues are being debated, commented upon by a great variety of elected officials, discussed in the media, and elections having consequences is proof that it is working. Simply because you may not like the process doesn’t mean it isn’t working.

Posted by: Royal Flush at July 30, 2011 5:09 PM
Comment #326740

Yes. What jlw said.

Also, Republicans didn’t give a rats ass about spending like crazy or raising the debt ceiling without making cuts to social programs when Bush was in office.
This horsesh*t they’re currently pulling is something they’ve CHOSEN TO DO.
G.O.P. = Grandiose, Obstructionist, Pathetic

Posted by: Adrienne at July 30, 2011 5:36 PM
Comment #326743

Robert Scheer: Debt Madness Was Always About Killing Social Security

Posted by: Adrienne at July 30, 2011 7:29 PM
Comment #326745

The Problem for Republicans, really, is that their notion of economic recovery depends on the business community being suicidally generous, which is is to say, expanding businesses and locations and hiring without expectation of return.

The reality is, customers are what make business worth doing, people worth paying to attend to them. It will take literally decades to recover, if at all, if we take that course, especially since the chronically unemployed are going to become less employable as time goes on.

Republicans, though focused on the CEO level, don’t key onto this, and when we bring it up, it’s class warfare. Social justice, it seems, must be done in the politically correct way. Even if management does treat workers unfairly, even if they do use intimidation tactics or whatever, we can’t complain, because that would be class warfare.

The truth is, though, an economy like ours DEPENDS on the middle class consumer to power it, so when the rich and powerful, feeling beat up upon, decide to take their pound of flesh from those hangers-on, those moochers, guess what happens? The chunk comes right out of their ass, because the people they’re putting at a disadvantage are the very people they rely upon to underwrite their economic success, their life of privilege.

The thing to understand is that the paradigm for much of what the Republicans want to return to is that of pre-depression America, where more people were in poverty, lived in rural areas, where the economy often sea-sawed between boom and bust. They’re policies are not unlike those that had the economy in recession for years at a time. Even the Gold Standard is an artifact of such times.

But at the same time, they’re wanting the economy to work like Post-depression America, with the Middle Class spending, spending, spending. The compromise to achieve that, to achieve greater concentration of wealth, power, and influence for the rich, while maintaining a strong consumer economy was to give free-flowing credit. This helped to maintain the fantasy that the rich could horde wealth and income, and at the same time, count on consumer confidence and activity.

Right now, we’re understanding just how flawed the conservative’s elite-oriented economic picture is.

The boss doesn’t always know best. The CEO isn’t always good at his job. The innovators aren’t necessarily the ones who are rewarded, and the market has a hideously long lag time between when a harmful practice begins, and when it comes back to stop it.

The basic assumption is that the average voter is less intelligent, less wise, less capable of understanding the problems of economics than the average CEO, than their bosses or whatever.

That is what a Republicans is really saying when they taunt us by asking us whether we believe government can spend our money more wisely. Truth is, government can spend it no more wisely or foolishly than the people we elect, and its our judgment of character that is at issue in that taunt.

Who we put in charge decides whether money is spent wisely or not,ultimately. The Republicans have an ideology to which they have deferred their judgment, and as a result, their actions are thoughtless, callous, and often woefully misguided and counterproductive. Currently, they have the FAA shut down over a fifteen million dollar budget item for rural airports. That shut down means the government is forgoing thirty million dollars in revenue every day in taxes. Consumers, by the way, aren’t seeing a dime of that money in savings. Anyways, that shutdown means that they lost more money for the treasury the first day than they ever would save.

So what’s going on? It’s the glamor of cuts that is being promoted, not the reality or mathematics of them. A true accounting or cost benefit analysis is not being applied. Fiscal conservatism is just a market term for what are really attacks on liberal spending priorities, and items that benefit Democrats.

This is no way to run a government, or write up a budget. This is how you slow down an economy, destroy its momentum. I mean, I find it hard to believe that people would be so cynical as to maintain the appalling conditions in our economy for the sake of defeating Obama. That just strikes me as morally wrong. But when I see people fighting to allow something like a sovereign default for the American government to happen, I just begin to wonder.

My notion has been that there are some things you just have to get done, and if that means compromising your principles in order to do that, well you compromise. There is no point to making major, sometimes irreversible mistakes, simply for the sake of saying you stuck to your principles. The principles should serve man, not man the principles. We come up with all these principles in order to make it easier to do the right thing.

Our principles should not be to inflict permanent harm on our country’s reputation in order to see some political goal realized. Like doctors, our first principle should be to first do no harm, to not make our country’s situations worse than it already is.

Posted by: Stephen Daugherty at July 30, 2011 10:48 PM
Comment #326746

Three perfectly legal ways to get around the GOP obstruction.
A. The 14th amendment makes wrangling about the debt limit null. All the GOP could do is try another futile impeachment and make themselves and the country look foolish. Court actions could only be taken by those that can prove standing,a difficult task, and even then what would the action demand?Would it demand the administration ruin the economy? Even the corporatist controlled SCOTUS would not likely support that and the process would take time. Hopefully enough time to boot the Tea Party idiots out of positions of responsibility.

B. The Treasury cannot just print money. There are statutory limits BUT there are no such limits on coinage. They could issue,say,two coins, valued at a trillion dollars each. Deposit those coins in the FED and write checks against them. Stupid and crazy? Yes. Legal ? Yes.

C. A similar approach would be to issue a two trillion dollar real estate option,say, on all the federal property. After sanity returns the option could be bought back or allowed to expire after 90 days.

Stupid and crazy? Sure, but how else to respond to the stupid and crazy.

Posted by: bills at July 31, 2011 12:05 AM
Comment #326749

bills


“A. The 14th amendment makes wrangling about the debt limit null.”


no it doesn’t. it says the legal debt of the US can’t be questioned. the debt ceiling has nothing to do with the 14th amendment. also there is no clause or wording that gives the president unilatteral power to raise the borrowing limit, in fact section 5 gives congress authority over our debt, not the president. it’s funny how you guys were up in arms constantly whinning about bush overstepping his const. authority, but have said nothing about your incompetent messiah.

Posted by: dbs at July 31, 2011 8:06 AM
Comment #326751

bills:

B. The Treasury cannot just print money. There are statutory limits BUT there are no such limits on coinage. They could issue,say,two coins, valued at a trillion dollars each. Deposit those coins in the FED and write checks against them. Stupid and crazy? Yes. Legal ? Yes.

You’re absolutely right. This could be done and since it would be entirely legal, it would be preferable to the unprecedented step of the president invoking the 14th Amendment and causing serious contention between the executive and congressional branches of government.

I was reading a good article in Alternet on this subject just yesterday:

There’s a Solution to the Debt Fight That Could Avert Catastrophe — Why Is Everyone Ignoring It?

Quote from the article:

The escape hatch nobody at the Washington Post or the New York Times is talking about is called coin seignorage. It’s based on Title 31 of the U.S. code, which authorizes Treasury Secretary Tim Geithner to “mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
So tomorrow, Geithner could order the mint to manufacture a couple of trillion-dollar platinum coins and swap them for public debt now held by the Federal Reserve. The coins, unlike the bonds held by the Fed, don’t count as debt, so the transaction would bring us $2 trillion below the debt ceiling and the manufactured “crisis” would be averted.

Unfortunately, I don’t think Obama has the stones to ask the Treasury Secretary to make this happen. It seems like once again he’d rather go along politely allowing the social safety net to be ripped to shreds on behalf of idiot tea bag ideology.

Posted by: Adrienne at July 31, 2011 11:35 AM
Comment #326753

That’s typical liberal thought process. Instead of trying to solve our spending problems, just add 2 Trillion more to the money supply. What will our dollars be worth then? Talk about a tax on the poor and middle class.

Posted by: tdobson at July 31, 2011 12:26 PM
Comment #326754

The coin minting does have a kind of brilliance to it, doesn’t it? It’s an accounting trick that would have no effect on the economy and the value of the dollar, yet it would destroy conservative attempts to undermine the economy.

Posted by: phx8 at July 31, 2011 12:39 PM
Comment #326755

phx8:

The coin minting does have a kind of brilliance to it, doesn’t it? It’s an accounting trick that would have no effect on the economy and the value of the dollar, yet it would destroy conservative attempts to undermine the economy.

Not to mention the social safety net. I think that’s the real goal here — to rob the people of all the money we’ve paid in and do away with the safety net. It’s what they have always wanted, and they finally manufactured a “crisis” that could meet that long held goal.
I think using coinage might be the very best solution to this moment of hostage insanity. However, as usual Obama seems more interested in placating the opposition than in what his base might expect of him during such a crisis.

That’s typical liberal thought process. Instead of trying to solve our spending problems, just add 2 Trillion more to the money supply. What will our dollars be worth then? Talk about a tax on the poor and middle class.

Well this is typical conservative tea bag BS. As the article says:

Consider the debt ceiling debate itself: Congress has the power to authorize any amount of spending and raise any amount of tax revenues it wants, and it chose to spend $1.5 trillion more this year then it will take in in taxes. Many of those holding up the debt ceiling were members of Congress when the budget passed – some voted for it. That debt has already been incurred, and now the hard-right flank of the GOP – the party of purported “fiscal responsibility” – is threatening to simply stiff our creditors, despite the fact that doing so would not only cause extreme economic pain on “Main Street,” it would also send the deficit skyrocketing.
Posted by: Adrienne at July 31, 2011 1:08 PM
Comment #326756

Sorry, should have attributed the second quote above to tdobson.

Posted by: Adrienne at July 31, 2011 1:09 PM
Comment #326757

“Many of those holding up the debt ceiling were members of Congress when the budget passed”

What budget are you talking about. Must be the one 3 years ago since the Democrats haven’t offered one the past 2 years

Posted by: tdobson at July 31, 2011 1:51 PM
Comment #326759

phx8

so your plan is to stamp out 2.5 to 4.0 trillion in nickels, dimes, and quarters. that’s pretty damn funny. what’s even funnier is you think it would go un noticed and have no effect on the value of our currency. of course it would create a boom in the coin purse industry. LOL!!!!!


adrienne


“I think that’s the real goal here — to rob the people of all the money we’ve paid in and do away with the safety net. It’s what they have always wanted, and they finally manufactured a “crisis” that could meet that long held goal.”


kind of like closing the barn door after the horses have already gotten out. the money you, i , and phx8 have been paying in is already gone. i’ve said all along soc. sec. should go into a lock box where it can’t be spent in the general fund, but know one wants hear that, especially those in washington.

Posted by: dbs at July 31, 2011 2:02 PM
Comment #326760

tdobson:

What budget are you talking about.

The Congressional budget that ran up all the debt that the GOP now wants to stiff our creditors for rather than pay.

dbs:

so your plan is to stamp out 2.5 to 4.0 trillion in nickels, dimes, and quarters.

Read that article, the President and the Treasury Secretary could legally do this by issuing only a few coins.

you think it would go un noticed and have no effect on the value of our currency.

What’s really funny is that you think that stiffing our creditors will have no effect on the value of our currency.

Posted by: Adrienne at July 31, 2011 2:24 PM
Comment #326761

dbs:

kind of like closing the barn door after the horses have already gotten out. the money you, i , and phx8 have been paying in is already gone.

No, it’s not gone. Just because the government thought they could steal that money from us doesn’t mean they don’t still owe us what we have already paid for.

i’ve said all along soc. sec. should go into a lock box where it can’t be spent in the general fund, but know one wants hear that, especially those in washington.

Al Gore said this in 2000 because this is exactly what the left has wanted for years. It’s one of the reasons why we voted for Gore — did you vote for him?

Posted by: Adrienne at July 31, 2011 2:30 PM
Comment #326762

“The Congressional budget that ran up all the debt that the GOP now wants to stiff our creditors for rather than pay.”

The debt was run up without a budget. The GOP wants to pay our creditors, they just want to stop the runaway spending.

Posted by: tdobson at July 31, 2011 2:33 PM
Comment #326763

The coin minting does have a kind of brilliance to it, doesn’t it? It’s an accounting trick that would have no effect on the economy and the value of the dollar, yet it would destroy conservative attempts to undermine the economy.

Posted by: phx8 at July 31, 2011

Who could possibly that stamping coinage is any different than printing dollars in its affect? Must be one of those “magical thinking” ideas.

Posted by: Royal Flush at July 31, 2011 2:46 PM
Comment #326764

Corection…Who could possibly (believe)…

Posted by: Royal Flush at July 31, 2011 2:47 PM
Comment #326765

Adrienne,
You’re right about Obama. He gave in to the GOP when they threatened not to extend unemployment insurance. When faced with that bit of extortion, he gave in and compromised and made a bad trade. Emboldened, the conservatives have resorted to blatant economic terrorism. Obama should have called them on it last time, and forced them to make good on their disgusting threats, and cut off unemployment insurance. Make these blackmailers take responsibility for their blackmail! He should call them on the debt ceiling. Compromising with economic terrorists does not work. They will simply come back this fall and make even bigger threats in the budget negotiations. This time it was tanking the economy. Next time it will be shutting down the government. They want to kill Social Security and Medicare/Medicaid in the worst way. At some point Obama has to make a stand.

It’s so bad. He’s just giving them a fig leaf to hide behind as they eviscerate the economic future of the vast majority of the American people in order to make a tiny rich minority even richer. I’m not sure there’s any point at all in supporting Obama in the next election.

Thank goodness for Pelosi in the House, but she can’t do it alone.

Posted by: phx8 at July 31, 2011 2:49 PM
Comment #326768

tdobson:

The debt was run up without a budget.
75 percent of the public debt this nation has incurred since Clinton (who left a budget surplus) was run up under Bush. The debt ceiling was raised seven times without incident under the Bush administration when the GOP was spending like crazy. But what is your point anyway? The debt ceiling has to be raised now to accommodate every single budget proposal we could name — including Paul Ryan’s hard-right Dickensian teabagger budget.
The GOP wants to pay our creditors, they just want to stop the runaway spending.

Do you really expect anyone to believe this? The GOP refused when Democrats capitulated entirely to all their demands for cuts. Reid offered a package that would have decreased spending by $2.7 trillion over the next decade, without any revenue increases, in exchange for raising the debt ceiling and avoiding default through the 2012 elections. That was everything they’ve asked for — but then they decided to move the goalpost. Most people now understand that this whole “crisis” has nothing to do with “spending”.
As phx8 just said, it is totally obvious that the GOP is engaging in economic terrorism.

Posted by: Adrienne at July 31, 2011 3:28 PM
Comment #326770

RF:

Who could possibly that stamping coinage is any different than printing dollars in its affect? Must be one of those “magical thinking” ideas.

Nope it’s not magical thinking. Read the link I put up. It’s called coin seignorage, and it’s based on Title 31 of the U.S. code.

Posted by: Adrienne at July 31, 2011 3:41 PM
Comment #326771

Adrienne, care to link a few qualified opinions on your assertion?

Posted by: Royal Flush at July 31, 2011 4:02 PM
Comment #326772

Adrienne…what makes you believe that your link to “Joshua Holland” is credible? Can you provide his credentials?

Posted by: Royal Flush at July 31, 2011 4:06 PM
Comment #326773


The tea party is on the verge of a stunning political victory. They are going to get 95+% of what they wanted in this deal. I will be waiting breathlessly for Obama and the Democrats victory speech. The sad part is that progressives will come crawling back to Obama in 2012, Let’s hope not.

A major victory for capital, a major defeat for the poor and the middle class, especially the middle class. We are going to get the deal that we all should have expected, no surprises here.

Posted by: jlw at July 31, 2011 4:28 PM
Comment #326774


I guess the good news is that Pelosi and a majority of the Democrats have the option to vote no and tell their constituents they did so.

Posted by: jlw at July 31, 2011 4:35 PM
Comment #326775

An editorial in the NY Times a few days ago provided some insight into the irrelevance of the ratings given by S&P and Moody’s on US creditworthiness.

The point being made was who gives a shit what they rate our bonds. Who now goes to either one of them to look at our rating before buying our debt? Does China? Do individual investors all over the world? Does anyone?

The tiny, tiny Isle of Mann has a AAA credit rating. Will the world flock there as a safe haven? Canada and Australia have AAA ratings. Will they suddenly issue enough bonds to satisfy the world demand? Why would they, they aren’t financing trillions in debt.

Japan has a AA credit rating and pays lower interest to holders of their debt than the US does.

Posted by: Royal Flush at July 31, 2011 4:51 PM
Comment #326776
Adrienne, care to link a few qualified opinions on your assertion? Adrienne…what makes you believe that your link to “Joshua Holland” is credible? Can you provide his credentials?

Duh! I sent you to the article so you could merely click on the link that was provided on that page. I guess you don’t realize that things that are highlighted on a webpage can be clicked on to take you other places? [sigh] Never mind.
Here’s the link (just click on it):

TITLE 31 > SUBTITLE IV > CHAPTER 51 > SUBCHAPTER II > § 5112
Is Cornell Law School acceptable to you?

Posted by: Adrienne at July 31, 2011 4:57 PM
Comment #326777

Cornell is a good school. Does that make Holland correct?

Posted by: Royal Flush at July 31, 2011 5:18 PM
Comment #326778

RF,
I know that lots of folks on the right like to live in their own small tea-flavored bubble by choice, but in case you do want to see what other nations have been saying about what’s going on with Congress, here’s a link:
World Reacts to Debt Ceiling Debacle: “Irresponsible,” “Worst Kind of Absurd Theatrics”

Posted by: Adrienne at July 31, 2011 5:24 PM
Comment #326780

RF, you asked for a credible link. I gave you one. If you don’t understand how to read and understand what is written on that page, that’s your problem, not mine.

Posted by: Adrienne at July 31, 2011 5:27 PM
Comment #326781

That link didn’t work. Here it is again:
World Reacts to Debt Ceiling Debacle: “Irresponsible,” “Worst Kind of Absurd Theatrics”

Posted by: Adrienne at July 31, 2011 5:29 PM
Comment #326786

What Liberal/Socialist/Communist countries have to say about our political process is almost meaningless to me. China should be exuberant over the possibility of earning more on the debt they purchase from us.

The political process taking place now over debt, spending and taxation is exactly what our founders envisioned. And, that the house holds the keys to spending was never more important.

Posted by: Royal Flush at July 31, 2011 6:12 PM
Comment #326788

jlw:

The tea party is on the verge of a stunning political victory.

It’s so totally pathetic that such a small percentage of complete and total asswipes, such heartless, souless motherf*ckers, are being allowed to call the shots for this entire country.

They are going to get 95+% of what they wanted in this deal. I will be waiting breathlessly for Obama and the Democrats victory speech. The sad part is that progressives will come crawling back to Obama in 2012, Let’s hope not.

Mr. No Hope & No Change needs a progressive primary challenger (in possession of a pair of cajones) in the worst freaking way.

A major victory for capital, a major defeat for the poor and the middle class, especially the middle class. We are going to get the deal that we all should have expected, no surprises here.

Nope, no surprises here unfortunately. I would have f*cking LOVED to be surprised for the very first time with this president though. We the People have been totally and completely sold out — once again. And, it seems they really have no idea how much anger and animosity that average people hold for all the members of Congress, and for this president and his entire administration.

Posted by: Adrienne at July 31, 2011 6:22 PM
Comment #326791

Well the conservatives always wanted a smaller government guess that is what this “Super Congress” is.

The only question is who gets the Oscar for best actor in political theater.

Posted by: j2t2 at July 31, 2011 6:32 PM
Comment #326796

RF,

China should be exuberant over the possibility of earning more on the debt they purchase from us.

No they shouldn’t. Their entire economy is built upon maintaining a weak RMB with respect to USD. If we don’t raise the debt limit they won’t be able to strengthen our currency by buying our debt.


Well the conservatives always wanted a smaller government

Actually, that’s not the case. It appears that one of the final snags has been the GOP’s wish prevent the DoD budget from being cut.

Posted by: Warped Reality at July 31, 2011 7:24 PM
Comment #326797

But wait Adrienne…Biden said obama has a spine of steel. obama said he believes in change…and changing his mind is a good start.

Posted by: Royal Flush at July 31, 2011 7:25 PM
Comment #326798

WR writes; “If we don’t raise the debt limit they won’t be able to strengthen our currency by buying our debt.”

How does the US selling more of its debt to China, or going deeper into debt, strengthen our currency?

Posted by: Royal Flush at July 31, 2011 7:29 PM
Comment #326800

RF,
This supposed deal still needs to pass the House. If something along the lines being discussed actually passes, I will readily admit that you were right, and Obama caved. I’m still hoping he will say ‘no’ and demand a clean bill. If he does cave, it will be even worse next time, because the GOP will know he can be rolled; just make an extreme demand, and settle for 80% of what they want.

Posted by: phx8 at July 31, 2011 7:44 PM
Comment #326802

phx8 writes; “This supposed deal still needs to pass the House.”

You are correct and no one knows how that might play out. A clean bill has no chance at all in the house. I don’t know many of the details so I will sit back and relax until more is known.

Posted by: Royal Flush at July 31, 2011 7:48 PM
Comment #326803

RF,

Simple supply and demand. China can’t use RMB to buy US debt, it must use USD, so China uses its RMB to buy USD (increasing its price wrt to RMB) in order to in turn buy US govt bonds. With no more bonds to buy, China no longer has a reason to buy USD so their scheme to artificially strengthen the dollar comes to an end.

Posted by: Warped Reality at July 31, 2011 7:50 PM
Comment #326804

adrienne

“No, it’s not gone. Just because the government thought they could steal that money from us doesn’t mean they don’t still owe us what we have already paid for.”


where are they going to get the money to pay it back? it’s gone. if it is to be repaid, it will be you and i repaying ourselves. we paid it in, they spent it. unless we can take out of thier a$$e$ personally, we’re screwed.

Posted by: dbs at July 31, 2011 7:54 PM
Comment #326808


Adrienne, I will place my bet on Obama for reelection unless the last contingents of troops don’t arrive home from Afghanistan and Iraq shortly before the next election or unless he doesn’t invade Iran. Halliburton has promised to let Obama know when Iran gets the bomb.

Obama is going to get his fifteen million jobs now?

Hey, he saved Obamacare, for now.

Besides, singling out Obama for replacement would do nothing. The money is what is doing the talking. It’s the only free speech that is affordable in D.C.

Royal, you are not the first to say that Obama would cave. I was saying that back when the liberals and progressives where gaga for him and the right was making fun with the Messiah jokes or calling him the Antichrist. back before he was elected. I was looking at the corporate money.

Back when Obama was wooing progressives with words like ‘I am going to raise the minimum wage to a living wage and index it to inflation.’ When you think about it, that was a ridiculous proposal considering the fact that the minimum wage is already at least twice, actually more than twice, what a living wage is.

Is Obama going to get his fifteen million jobs now?

Posted by: jlw at July 31, 2011 9:23 PM
Comment #326809


Warped, back before the election, the tea party was ok with defence cuts, in specific, our involvement with NATO. It is possible that Pelosi and the Congressional Democrats can team up with the tea party to defeat Boehner and the old guard on that one.

I see their also not to happy with possible cuts to Medicaid insurers and providers rather than the poor recipients.

I’m sure Obama is willing to capitulate, I mean negotiate on those minor sticking points.

Posted by: jlw at July 31, 2011 9:42 PM
Comment #326812
back before the election, the tea party was ok with defence cuts

I think that rhetoric was all one huge pile of bovine excrement.

Posted by: Warped Reality at July 31, 2011 10:03 PM
Comment #326815


I guess we can ask dbs, RF, and C&J if it was just a big pile of bovine excrement.

Posted by: jlw at July 31, 2011 11:10 PM
Comment #326819


My 95+% comment was a gross exaggeration. This is just a down payment on the conservative domestic agenda.

Posted by: jlw at August 1, 2011 12:50 AM
Comment #326823

BHO caves again. There is a slim chance this deal (ransom) won’t pass the House. In the long run it is apt to make the budget worse and is certain to make the lives of the unemployed worse. Pretty clear by now we should have sent Hilary in to bat.
This also bodes ill for American democracy when the party willing to act the most ruthless,disregarding the needs of the country,to appease its wacko fringe always wins.

Posted by: bills at August 1, 2011 6:39 AM
Comment #326827

Republican David Frum addressing the tea party: Wake up GOP: Smashing system doesn’t fix it

Posted by: Adrienne at August 1, 2011 11:59 AM
Comment #326862

This also bodes ill for American democracy when the party willing to act the most ruthless,disregarding the needs of the country,to appease its wacko fringe always wins.

Posted by: bills at August 1, 2011 06:39 AM

Really? I believe we are seeing American democracy working exactly as our founders wished. The house of representatives is the most directly representative of the voters and must stand for election every two years. Our founders, in their wisdom, gave the house the power of the purse. That our representatives in the house are following the wishes of those who voted for them should be applauded. I hope it happens with ever greater frequency.

How would you change the election of our representatives to be more reflective of the will of the people? What part of the constitution regarding elections would you like changed?

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