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Michael Brenner Headshot

Debt Poker -- With a Cut Deck

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The moment of truth is fast approaching in the crisis over raising the United States' debt ceiling. Unless Congress grants the Executive the authority to add to the debt, the Treasury in principle will be obligated to stop all payments not covered by existing funds. This is an unprecedented situation since never before has a political party, the Republicans, placed partisan political again above the responsibility to ensure that the "full faith and credit" of the American government is not jeopardized. President Obama has accepted that his administration and the country are being held hostage. He has declined to stigmatize the Republicans in Congress as the perpetrators of blackmail who are demanding as ransom drastic cuts in domestic social programs. These include curtailing Social Security and Medicare benefits even though they are financed from dedicated Trust Funds independently financed. The White House has agreed to those cuts -- much to the distress of many Democrats who are opposed to abandoning the party's signature programs. In addition, they worry that disaffected Democratic voters will stay home come election day next year.

Obama's behavior seems to conform to the 'Stockholm Syndrome.' It refers to a hostage who gradually adopts the mindset and outlook of the kidnapper as an unconscious means of psychological and physical (political) survival. The suggestive evidence is considerable. The White House's huge concessions were paired with its proposal for very modest increases in a few business tax loopholes. It did not even demand rescission of the massive Bush-era tax cuts for the super rich, which was a centerpiece of Obama's 2008 campaign. Those modest proposals on the table are rejected outright by the Republican leadership and now have been conceded by the Democrats. The former clearly believe that they have the psychological upper hand in this game of chicken. That is so despite the survey polls showing large majorities opposed to the starving of social programs and smaller majorities blaming the Republicans for the crisis. So cocksure are the Congressional Republicans that they walked out of two meetings with the President and then refused to return Obama's phone calls inquiring whether they would show up. A jilted President publicly admitted with more resignation than anger that he had "been left at the altar."Offensive behavior of this crudeness toward the President of the United States has no precedent.

The net effect is that (1) the federal government may indeed default on its debt payments; (2) President Obama is now putty in the hands of a relentless opposition; and (3) commitment to the greatest American achievements in social progress in its history are being abandoned. All this with a supposed Democrat in the White House and with a majority in the Senate. Now that is a change we can count on since it is already a done deal.

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