We live at a time of 9.2% unemployment, with tens of millions un- and underemployed. The job market is stuck in neutral -- if the economy were a bicycle, it would be wobbling along, threatening to keel over unless the rider paid some attention to the pedals.
And yet, instead of dealing with this fundamental challenge to the living standards of everyday people, Mitch McConnell, the Republican leader in the Senate, spent the day figuring out a way to avoid having to vote to raise the debt ceiling.
Clearly, he's in the same mode as his house colleagues, who now argue that "it's the administration's debt ceiling."
The proposal would have the president call for increasing the debt ceiling, and that call would trigger an equal-sized (nonbinding) cut in spending. The Congress could vote against raising the ceiling, but they'd need a veto-proof majority to make that vote stick.
I've seen a bunch of analysis suggesting that Obama should like this deal. He can raise the debt ceiling on his own, get credit for proposing spending cuts, and leave it to Congress to enact them or not. Sure, he and the Democrats (assuming they'd support his veto if the Republicans "disapproved" of the debt increase) get tagged with raising the ceiling, but hey, that's the price of being the grown ups.
Maybe this is the president's best option if no others open up. It does present a way for Republicans to avoid triggering default without getting their fingerprints on the debt ceiling increase, and maybe that's the best we can get.
But I don't like it (I doubt House Republicans will like it either, since it practically insures a debt increase with no commitment to spending cuts). It's a cynical ploy, an admission that you won't take the responsibility to do the right thing, and it pretty deep complexity to what should be, and has been in the past, a pro forma vote against wholly avoidable economic pain.
Also, consider the opportunity costs being expended here. Every legislative moment spent figuring out how to game the debt ceiling is not being spent preventing that bicycle from toppling over.
This post originally appeared at Jared Bernstein's On The Economy blog.
Debt talks: Chaos if Congress blows it
The Hill's Hot Potato: Lawmakers Deny Ownership of Debt Limit Debacle
Q&A: Paul Ryan on the Debt Ceiling Debate and Medicare
Report Backs Obama Warning That Social Security Checks at Risk in Debt Crisis
http://www.alternet.org/story/149019/
How Our Trillion-Dollar Empire Is the Cause of Our 'Deficit Problem' | | AlterNet
"We could make the budget deficit disappear and fully fund Social Security and Medicare without raising taxes, if we only outspend our biggest military rival by threefold.
December 8, 2010
The United States spends more on its military and security services than the rest of the world combined, yet in the midst of a major debate over our fiscal situation, that enormous drain on our national treasure isn't really "on the table" in any serious way. Obama's deficit commission recommended cutting the Pentagon's purse, but the thrust of its focus was on veterans' pensions and health-care -- rather than, say, maintaining costly bases to defend such imperiled allies as Italy and Germany -- and the spending reductions were largely symbolic relative to the level of bloat that plagues our security budget..."
And so today it is the Democrats who are happy that USA is going broke and will suffer a prolonged decades long recession at best. Perhaps multiple decades. It's disgraceful.
It was clear that the debt ceiling issue was coming up. The Democrats dealt away their bargaining chip, the tax cuts for the rich without getting anything in return. They did that on purpose.
I think what we're seeing now is a elaborate hoax, with two political parties seemingly at odds, while acting in concert to implement the Simpson-Bowles deficit commission recommendations. I think the whole thing was arranged last December, when the tax cuts were extended.
If I'm right, there is something larger here than simply a debt ceiling issue. We do know that the Congress's owner, the US Chamber of Commerce has said that the debt ceiling issue needs to be resolved. So, what are we seeing?
http://www.epi.org/publications/entry/issuebriefs_ib159/
"According to the most recent long-term forecasts by the Congressional Budget Office (CBO) and by the Office of Management and Budget (OMB), the federal government will run surpluses well into the future. OMB (2000) projects that the federal budget will show a surplus until 2075 if discretionary expenditures grow with inflation, and until 2040 if discretionary spending grows with GDP (which is much faster than it has grown in recent years). CBO's (2000) long-term forecast, which assumes that costs for Medicare and Medicaid will triple as a share of GDP by 2040-which is far more than projected by OMB or by the Health Care Financing Administration (HCFA 2001)-still shows a combined surplus for the federal government beyond 2020. Thus, even under some rather bleak projections with respect to health care costs, the federal government will be able to meet its obligations to Social Security well beyond 2016. "
That was the rationale why we could afford the Bush tax cuts. Throw in the prescription plan, and a couple of wars, and we have the deficits. Throw in the financial collapse that reduced further tax revenues, and we have more deficits.
However, then Bush moved us into two wars. Arguably, the Afghanistan war was thrust upon us but Iraq was not. In addition, he passed the near criminal Medicare drug benefit, a massive unnecessary and budget busting give away.
In addition, there has been a massive increase in gov't spending NOT the tax cut which has driven deficits. We take in about 2.5T in taxes.
Here are the past 10 years of Federal spending (inflation adjusted) including all military spending:
2001: ....$2,328
2002: ....$2,474
2003: ....$2,598
2004: ....$2,685
2005: ....$2,810
2006: ....$2,819
2007: ....$2,881
2008: ....$2,981
2009: ....$3,198
2010: ....$3,552
2011: ....$3.513 (after cuts)”
It will take a leader, one not visible on the horizon of either party, to pull this nation together so that we can achieve all that our founding papers allow us to achieve.
No Paul is not the answer unless you are super rich and can always afford expensive healthcare etc even when you are elderly. In that case you are just selfish.
I don't understand how any sane person can think libertarianism can work in a large modern society.
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"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills."
"The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills."
We are going broke and any further debts piled on top of the already record breaking pile of unpayable debt is just going to take us under with increasing speed and ferocity.
Trillions of dollars went to the Wall St. cabal, most of that went to European Banks. Europe is de facto bankrupt, demanding more bailouts; that we raise our debt ceiling. The US population pays the bill$.
No jobs, no unemployment extensions, no food stamps, no farm aid, no manufacturing, no economic platforms like NAWAPA. NASA, the source of America's strength, is to be chopped up and privatized. Social Security, Medicare and Medicaid is to be chopped.
No one in the Wall St cabal has been indicted for fraud, no action taken to recover the bailout trillions. Perpetual War, that is war against the US, is expanded effortlessly. Congress just doesn't care.
Stabilizing the United States is the only imperative the only power on earth that can save humanity.
Statecraft demands the immediate reenactment of the Glass-Steagall standard in US banking, cancelling all obligations to the Inter Alpha Group of Banks, the Wall St. cabal. Put the Fed into bankruptcy protection, recover the bailout trillions. Create the US National Bank that funds the 50 states, then fund the necessary facilities that enhance the population's standard of living.
Stop Perpetual War. No other options exist.
But that will NOT happen as long as the corporate-controlled two-party duopoly remains in power.
I saw this last December, before the tax cuts were renewed.
1. - They extend the tax cuts, adding $1 trillion to the debt.
2. - The new Republican house refuses to raise the debt ceiling.
3. - Cuts are necessitated by the failure to raise the debt ceiling, starting with not paying back to the Social Security trust fund, the amounts owing.
The debt ceiling and the tax cuts that everyone knows will raise the national debt needs to be resolved at the same time.
That's what I said back then. A blind man could see this coming. The Dems dealt away their bargaining chip, the tax cuts for the rich without resolving the debt ceiling issue.
And what we're seeing now is a hoax, acting by the politicians, while implementing something they agreed to last December.
Hey, why do we have a debt-ceiling?
Then we could talk about how many other countries HAVE A DEBT-Ceiling ---- NONE.
(No Liberty Bonders out there.)
Then we could talk about WHY we should have a Debt-Ceiling , if no other countries have one.
Then we could debate the implications of removing the debt-ceiling.
Then we could debate actually repealing the debt-ceiling(Liberty-Bond).
Then people could write books about the history of the ridiculous debt-ceiling and how the Repugs tried to use it, among other tactics, to destroy our country.
Debate the Debt-Ceiling?
Really?
Why are all the supposed "free market" Republicans making this the issue. Do they think the market can't determine our limits?
The only reason this will be resolved is because all the grandstanding politicians will not want to pass the deadline and see that America survives without following them.
Stop with these phony issues and create a thriving economy with jobs, profits, taxes and benefits.
Why is the Most Wasteful Government Agency Not Part of the Deficit Discussion? | Common Dreams
"In all the talk about the federal deficit, why is the single largest culprit left out of the conversation? Why is the one part of government that best epitomizes everything conservatives say they hate about government—- waste, incompetence, and corruption—all but exempt from conservative criticism?
Of course, I’m talking about the Pentagon. Any serious battle plan to reduce the deficit must take on the Pentagon. In 2011 military spending accounted for more than 58 percent of all federal discretionary spending and even more if the interest on the federal debt that is related to military spending were added. In the last ten years we have spent more than $7.6 trillion on military and homeland security according to the National Priorities Project.
[snip]
What makes the hypocrisy even more revealing is that the Pentagon turns out to be the poster child for government waste and incompetence.
In 2009 the Government Accountability Office (GAO) found “staggering” cost overruns of almost $300 billion in nearly 70 percent of the Pentagon’s 96 major weapons. What’s more, the programs were running, on average, 21 months behind schedule. And when they were completed, they provided less than they promised..."
Real tax increases; fake spending cuts
http://www.fiscalaccountability.org/lessons-real-tax-increases-fake-spending-a1681