A casual observer of the debt ceiling debate may be baffled by the Republican Party's actions. Are they really going to send the American economy off a cliff by drawing an ideological line in the sand and demanding that Democrats be pushed to unreasonable extremes? Are they really that crazy?
We masses are not privy to the political negotiations going on daily behind closed doors, and much less to the internal thought processes of those calling the shots. However, there are a few compelling theories that may explain their behavior:
Business Management 101: Create a Crisis to Move Your Agenda Forward
One business management theory is that the only way to get anything done is to create a crisis. A crisis will demand rapid action in a way that calm, long-term planning cannot. People work harder to meet deadlines, because they have to. Alternatively referred to as the "lighting-a-fire-under-your-ass," strategy, creating a crisis is particularly effective in a behemoth democracy in which there are hundreds of alternate agendas. Fear focuses the mind.
The Republicans created a fake crisis in the debt-ceiling vote. (These guys voted to raise the debt ceiling 11 times under George W. Bush -- suddenly they're morally opposed to it?) Tying the debt ceiling to budget cuts was the brainchild of the Tea Party movement, who rode into Washington by promising hefty cuts. Despite creating the veneer of a crisis, the Republicans know they can "save the day" at the last minute -- after letting as much blood as possible from the Democrats.
Representing the Constituency: Actually, the People Want This
An overlooked fact in the beltway media is that polls show that the majority of Republicans AND Independents actually want spending cuts to be linked to the raising of the debt ceiling. Nearly every poll this spring and summer show this and, in some polls, the difference is substantial, at 2-1 in favor. Republicans are actually doing what is in their political best interest -- believing that they will be rewarded in 2012 for standing firm on this issue.
Not surprisingly, it's the Republicans we can thank, at least in part, for those poll numbers. Their messaging has convinced middle America that it's better to default on our debt than continue our profligate spending -- when, in fact, every reasonable economist in America and nearly all international leaders have been warning us on how catastrophic consequences of this action.
Held Hostage at Your Own Tea Party!
The missing piece in both these theories, however, is that "reasonable Republicans" are being held hostage themselves -- by the fanatical sect of their own party. As columnist David Brooks explained this weekend, the Tea Party movement did not come to Washington to govern and compromise in the traditional spirit of American politics; they came to demand and threaten.
If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts ... But we can have no confidence that the Republicans will seize this opportunity... because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The "fanatics" in the Tea Party have stated in no uncertain terms that they are not willing to support tax hikes of any kind, period. Grover Norquist of the Americans for Tax Reform, for one, has gotten leaders, including Rep. John Boehner, to sign that pledge.
No matter how much the Democrats on the other side of the table are willing to give, the Tea Party's answer to any level of tax hike is no. It is the adult equivalent of putting their hands over their ears and chanting "nah nah nah, I can't hear you." The Tea Party is the author of the linking of the debt ceiling to spending cuts. You can be sure they are taking this play to the final act.
Despite the Republicans intense and sometimes bizarre methods, there may be a silver lining in all this for President Obama. While the debt ceiling vote is largely a manufactured crisis, the direness of our fiscal debt problem is real. The day of reckoning may not be August 2, 2011, but it will be soon. Perhaps the Republicans have allowed Obama to secretly clap his hands with glee -- he doesn't have to be the bad guy who slashed the sacred cows of Medicare and Social Security. By playing ball with the Republicans, the President gets to look like the reasonable negotiator, while achieving needed spending cuts. Indeed, this may be prime time to exact these kinds of concessions from his own party -- and blame the Republicans for the fallout.
The real question is whether Boehner can control his own fringe. No matter how reasonable both sides may come to be -- there is the very real possibility that the Tea Party may be the spoilers.
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They promised the people their followers, that they would make the president resign or they would impeach him, they promised to repeal the hcr and get job going. None of the things have happen and probably will not. They knew they had intentions of doing any of this but want to get back into congress by any means.
What have they done since they got relected, let see, voted take away people rights, on working, who they sleep or whether not they want to have a baby and to really top it off, tell you what light bulb you need to be using. No jobs, only defunded PP, couldn't stop DADT. But the president is still there and something tells me they have finally pissed him and he is about to show his other side that he had been so good in controlling, but it is about time.
We must stop the spending and borrowing. We cannot continue with a policy of raise the debt and spend more money, it doesn't work! All it does is run us faster and faster into bankruptcy. And raising taxes just drives business out of business or overseas.
Stop the talk and walk the walk of moral responsibility.
Nobody has to cut SS or Medicare. These are popular programs even with Republicans, and even more important, not the problem. Leaving aside the always left aside fact that SS is self funding, is not in trouble, and has never cost the general treasury one dime, cutting essential programs will do nothing to set us back on course. They are a red herring. This crisis has been designed to do exactly that- cut essential programs. The crisis was manufactured by cutting taxes on the people who supplied most of the revenue, while starting two pointless and endless wars. If we end those wars, we will save not only massive amounts of treasure, but many lives, and eliminate crisis in lives many times more crisis-riddled than ours. If we go back to a reasonable level of taxation on the rich, reasonable by our own historic standards as well as world standards, we can get back on track to sustainable surpluses, as we had when Bush took the presidency by fiat.
Moody's and other credit rating agencies have stated that lack of action on the debt limit could caused a downgrade in the US credit rating (http://bit.ly/mqfV3V). A downgrade in credit worthiness will increase interest rates and decrease the value of the dollar, creating an even larger debt load then we currently have.
I think that there would be mixed blessings if the value of the dollar decreased simply because it would make our exports more attractive and perhaps do something about our soaring trade deficit. But definitely, such a collateral benefit is far outweighed by the extreme consequences not only to our economy, but to the world economy as well. What I can't fathom is why the GOP didn't take the deal with the spending reductions coupled with pretty minimal revenue increases and then declare that they won the battle and the war. It's ideological foolishness to stay rigid on the revenue increases, especially when their reasoning for doing so ("Tax the job creaters? That would wreck the economy!") is specious. Certainly there were other factors involved, but the most prosperous period in the history of the nation, the so-called 'Clinton Boom' actually began with two tax increases. I'm not suggesting that the key to economic recovery comes from tax increases, but what I am saying is that the argument against them is fake.
The debt has snowballed since the 1970s. Right. But do you know that Reagan and the two Bushes, all together raised the debt 61% (these are percentages at the time. The cumulative effect is much greater), while Carter, Clinton, and Obama have contributed 21%, including the Bush caused recession costs, stimulus and bank bailout in Obama's first 2 years, which is half the Dem total. It's not in the name of social justice, by a long shot.
You are right to be angry, but maybe you should be angry at the right people.
The problem we have is that the current regime is spending $280 billion a month which means we have to borrow an additional $80 billion (i.e. issue sovereign debt) in order to cover our bills. It is the borrowing of the additional $80 billion a month that is impacted by the debt ceiling. If congress chooses not to raise the debt ceiling then $80 billion worth of expenses will need to be cut in order to stay within our budget. Put another way, not raising the debt ceiling does not mean we will default on our debt--clearly we bring in enough each month to make those payments--what it does mean is that all other expenditures will have to be prioritized and tough choices will have to be made as to what gets funded and what does not.
Analysis, polls, prognosticators, - - - geeeeeez ! !
Solve this issue the way every American family does - look for waste and eliminate it - -
No new credit ! ! ! ! ! Nobody can borrow themselves out of debt - - and that's nonpartisan.
Waste and fraud is rampant in all gov't - - start with contribution to the UN, all countries taking billions from US taxpayer citizens, Congress, the Treasury, the White House - that list is endless - - -
But I have failed here because my effort was to generate thought and consideration & your effort is to argue instead - - -
Go away and do something productive and useful ! ! !
It's the Tea Party's fault, amirite
What they have said is they won't balance the budget on the backs of seniors by cutting medicare and social security.
They are still running to the mailbox everyday waiting for their trickle-down check to show up (for the last thirty years).
They still think there's nothing wrong with this economy that a tax cut for the wealthy won't fix.
And the party that doubles the debt every time they get into office, somehow manages to make them believe that they are the fiscally responsible party.
They have a saying down in Texas, fool me once, shame...... shame on you. Fool me every four years for the last forty.... shame on ACORN, the EPA, Barney Frank, and everyone except those responsibe: the GOP.
Expecting rich people to invest in our country and have "trickle-down" for the masses is a non-starter—ain't gonna happen. They'll put their money where it will earn them the most, in 3rd world countries where people work for pennies instead of dollars.
Worried about more industry leaving this country? It'll happen anyway as long as Americans earn more than people in other countries, because there is no downside to moving to where the labor is cheap. We should address that.
Free trade is NOT fair trade. Fair would be taxing Chinese imports like our goods are taxed in China. Those tax dollars would help our economy and might provide more incentive for businesses to stay here. It's time to level the playing field on imports.
And it's time the rich paid their fair share of the tax burden. People argue that 50% of our citizens pay no taxes. Well, lets look at who actually has the money in the US before we get our pant-ies in a wad over that:
20% of the people in this country have 85% of the wealth— the bottom 80% have 15% of the wealth. Now, since that top 20% has 85 cents out of every dollar that's printed, I'm quite sure that they could afford to pay a little more without having to sell a vacation home or downgrade from a Rolls to a Mercedes.
You are misinformed and prejudiced.