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Miles Mogulescu

Miles Mogulescu

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Will Obama Stand Up to Republican Threats to Blow Up the Economy?

Posted: 05/13/11 01:51 PM ET

Virtually unanimously, Americans cheered President Obama for giving the order to send Navy SEALs to get Osama Bin Laden. We applauded the physical courage of those Navy Seals who risked their lives to carry out the raid.

But it also took political courage by President Obama to order the raid -- Sending Navy SEALs to cross hundreds of miles of Pakistani territory without alerting Pakistani authorities that their air defenses were being breached could easily have ended in disaster with American helicopters shot down and Navy SEALs killed or wounded. If the mission failed -- as Jimmy Carter's mission to rescue the American hostages in Iran failed despite the best intentions -- such failure could have destroyed Obama's Presidency, much as Carter's failure helped pave the way for the election of Ronald Reagan. Obama had the political courage to do the right thing to defend America, whatever the political risk.

The question is, will President Obama show similar courage in defending the nation against those who threaten to blow up the American economy -- indeed the global economy -- if he doesn't give into their demands to slash Medicare and Medicaid, as he did in going after than man responsible for blowing up the World Trade Center?

And make no mistake about it, that's exactly what Congressional Republican leaders are doing -- they are taking the economy hostage and threatening to blow it up if their demands to eviscerate Medicare, Medicaid and other programs vital to the middle class and the disadvantaged are not met.

If Republicans actually follow through on their threats and the US government defaults on its debt, worldwide credit markets will freeze, stock markets around the world will plunge, businesses will stop investing, millions will lose their jobs, and the global economic crisis will dwarf the fiscal crisis of 2008 that led to the federal bailout of the banking system to prevent global depression.

The rule in dealing with hostage takers is that you don't negotiate their demands. If you give into even some of their demands in exchange for releasing hostages, they will just learn that hostage-taking works and they or others will keep come back to take more hostages the next time they want something. Obama must have the courage to treat Republican demands to refuse to raise the debt limit and let the economy blow up in the same way he would treat other hostage takers. No negotiations!

Once the debt ceiling is raised, if negotiations are necessary to pass a budget, that's another matter. But if Obama starts down the road of negotiating with Republican leaders on cuts to Medicare, Medicaid and other government programs in exchange for raising the debt ceiling, the Republicans (whose long-term goal is to abolish Medicare and Medicaid) will already have won. Their demands will just keep escalating right up until 11:59 before the government will default on its debt and Obama will have little choice but to give into more and more of their demands.

Unfortunately, President Obama has already started down the road of negotiating with the hostage takers, sending Vice President Biden to meet a "bipartisan" group of Congressional leaders to try to negotiate a deal. Predictably, Republicans immediately escalated their demands. Senate Minority Leader Mitch McConnell rejected a clean vote on the debt limit, demanded "significant" cuts to Medicare and Medicaid in exchange for raising the debt limit, and took tax increases on absolutely anyone off the table. House Speaker John Boehner told the Economic Club of New York, "Without significant spending cuts and reforms [code for cuts to Medicare and Medicaid]...there will be no debt limit increase."

If President Obama even continues negotiations on this Republican ground, the hostage takers have already won. Since half of the Federal budget is for Social Security, Medicare, Medicaid and other insurance programs, a quarter is for the military, and a quarter is for everything else the government does, if you take defense cuts and tax increases off the table and demand trillions in spending cuts, the only place get enough cuts is from Medicare, Medicaid and Social Security. This is the only conceivable result of negotiating on these terms with the Republican hostage takers.

If President Obama doesn't want to go down in history as the Democratic President who began the dismantling of the signature Democratic achievements of Medicare, Medicaid and Social Security, he must have the same courage in standing up to Republican hostage takers as he did in going after Bin Laden. He he must hold firm and make clear that there will be no negotiations on cuts to these core programs -- cuts which are opposed by the vast majority of the American people -- in exchange for Republican votes to raise the debt ceiling.

Republican leaders can threaten away to refuse to raise the debt ceiling and blow up the economy. But if Obama actually stands up to them, they will never follow through on their threats. Their corporate funders will never allow them to -- As much as America's corporate elite may want to keep their taxes low by cutting programs for the middle class and the poor, they are not suicidal. They will not allow Republican (and Democratic) politicians whose campaigns they fund to send the economy into a global depression by defaulting on the Federal debt. Indeed on Wednesday, 62 leading business groups--including the Business Roundtable, The American Gas Association, The Telecommunications Industry Association, and the Association of American Manufacturers--sent a letter to Congress asking them to raise the debt ceiling and warning of the dire consequences to the economy if they don't. These are the corporate interest groups who fund the Republican Party and from whom ultimately, Republicans take their orders.

If Obama stands firm, he will win. He must make it clear that he won't negotiate with hostage takers. No retreat! No surrender!
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UPDATE: On Friday the US Chamber of Commerce sent a letter to all members of Congress stating that "The Chamber urges Congress to raise the debt ceiling as expeditiously as possible". From 1989-2010 the Chamber made $31,333,791 in direct political contributions (85% to Republicans), not counting tens of millions more in Republican-leaning issue advertising not directly to candidates, and from 1997-2010 spent $515,565,445 on lobbying. When the Chamber says "jump", Republicans in Congress say "how high?" This just underscores the fact that if Obama has the political courage to call the Republicans' bluff on the debt ceiling and refuses to negotiate cuts to Medicare, Medicaid and Social Security in return for their voting to raise the debt limit, the Republicans will fold.

 
 
 
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09:36 AM on 05/14/2011
Let's hope Obama stands up to the teapublicans the way he is standing up to Al Qaeda. If Al Qaeda decided to issue an award to their roll model of the year it wouldn't be Bin Ladin. It would be a toss up between McConnel, Boehner, and Cantor. These teapublicans are terrorizing American Families and have the ability to throw the free world's economy into chaos without firing a shot. Bin Ladin couldn't get the job done but now the teapublicans are Al Qaeda's latest best hope.
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07:43 AM on 05/14/2011
Look at the flip side of the issue.

With a coveted prized trophy, Osama, in his court, President Obama has a powerful re-election trophy to sway the masses for a second term. Something that eluded both Bu$h and the GOPer's for 8 years. So how does one minimize it? What do GOPer's have in their power to steer an outcome that would be detrimental to President Obama in 2012? Seems the deficit ceiling is the power tool. And the GOPer's have the ability and cojones to pull it off too.

Notice too they've altered the debate in claiming expenditures must be cut if the deficits ceiling is to be raised. They've spent an awful lot of political capital convincing their base the deficit ceiling is like a credit card balance...once you reach the limit, you need to stop using it and start paying with cash. Of course, those of us with an ounce or better of intelligence know better...they're trying to turn peas into beans.

What they're hoping for is if Obama calls their bluff and doesn't give them the expenditure cuts they're demanding, the economy will implode. And as the blame game begins, their position will be none of this would have happened if Obama had given them the cuts in expenditures they demanded. Obama had it within his power to avert the collapse and refused to do so as a result of political partisanship rather than what was good for the nation.
04:28 AM on 05/14/2011
The only reason Obama had success catching Bin laden was because Republicans were kept out of the loop. No way would they agree to anything that show success for Obama. Looks like his standing up is to stand up to let Republicans take their blame or their credit for blowing it up. When Obama took office they tried to give him a blown up economy then and since that one didn't work expect them to try again.
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HR Mickelson
Watch out for 'opinion rich and fact free' info
11:32 PM on 05/13/2011
After being bewildered with the President’s seemingly weak, compromised positions and actions IE Heath Care and Wall Street regulation, I am encouraged with the Osama call. However, I am not convinced this man has the backbone to really stand firm against the conservatives and rely on the voters to support a strong position. I honestly hope I am wrong and I want him to prove to me he can act with strength and conviction.
I financially supported President Obama last election, but even after repeated calls to send a healthy contribution for 2012, I am on HOLD. If the president can’t stand firm for what he believes and, what we elected him for, then I cannot financially support him.
It is time to stop the bullies with strong concerted actions and pressure. Take the agenda back and lead with it. How did the republicans ever get control of the agenda in the first place? My President, get on the offense and quit playing defense. Tell the republicans what you are going to do and go get it done. It is time to play HARD BALL with these extremists.
08:28 PM on 05/13/2011
THIS will be the big test for Obama.

Will he hold out?
Will he cave in?
Will there be reasonable or unreasonable compromises?

The way Obama handles this should tell us two things.
Does he really have a pair?
Is he really a right of center closet Republican?

I have my thoughts on the matter....and I sure hope I am wrong!
08:26 PM on 05/13/2011
Interesting that it costs 1.5 trillion a year to keep our wars and bases going around the world, yet both parties keep the war machines churning. Seems like the obvious place to cut, Bring the troops home.
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07:52 AM on 05/14/2011
The US does need to have points of presence around the world just to keep an eye out on what everyone is doing...human intell is another way of saying it. And military posts are the most easiest method. However, they do need to be strategic. The Middle East and Africa are hot beds of hostility and should be avoided. However, posts in neutral Europe and parts of Asia allow the US to mingle freely and take a closer look at the political dynamics without raising attention they natives under a microscope. It's been that lack of human intell that gets us involved in skirmishes like Afghanistan, Iraq, Libya and so forth.
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HUFFPOST SUPER USER
idisVA
06:26 PM on 05/13/2011
Republicans are posturing and thus should be ignored by Democrats who should give no serious concessions.
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06:17 PM on 05/13/2011
Obama will capitulate to their demands and sell out the middle class again. It isn't blackmail to force a stealth Republican(Obama) to do exactly what he wants to do anyway.
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05:51 PM on 05/13/2011
Why stand up to their threats when he has already clearly demonstrated he has the expertise to simply do it himself?
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HUFFPOST SUPER USER
jshook99
05:25 PM on 05/13/2011
Outlook Worsening for Social Security, Medicare, Trustees Say, if we dont do something now it will come to abrupt end and then many will suffer. QUIT BORROWING, QUIT SPENDING, OBAMA
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HUFFPOST PUNDIT
procrustes13
06:00 PM on 05/13/2011
Sure, do that. Stop spending. Cause the economy to shrink by 25%. That debt will look much larger then.
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09:19 PM on 05/13/2011
Yes!

Then lets follow YOUR lead and tax and spend and borrow our way to Prosperity!
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08:01 AM on 05/14/2011
Oh silly you!

The deficit you demand Obama quit borrowing for was run up by Bu$h and the GOPer's :

1. Bu$h tax cuts - not funded
2. Afgan war - not funded
3. Iraq war - not funded
4. Medicare prescription drug plan - not funded

They all required tax increases which GOPer's are dead set against. So they floated checks to pay for them. And now those checks are being presented for payment in the form of principal and interest payments for the bonds that were sold.

And what's even more interesting is if...a big if here...the GOPer's had raised taxes to pay for their follies, the cost would have been cheaper for the taxpayer...no interest payment - just principle.

If you really are serious about some needing to be, then I would suggest you start voting a straight Democrat ticket from now on.
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HUFFPOST SUPER USER
jshook99
12:25 PM on 05/14/2011
President Obama’s bailouts, massive stimulus spending, and other dangerous interventionist policies (some of which began in 2008) have made Americans less economically free. The 2010 Index of Economic Freedom analyzes just how economically “free†a country is, and this year America saw a steep and significant decline, enough to make it drop altogether from the “free†category, the first time this has happened in the 16 years . The United States dropped to “mostly free.†, lack of freedom has a direct, negative effect on job growth. It should be no surprise that President Obama’s policies have taken us down the path to fewer jobs and record deficits.
The American people showed what they thought of the Democrats in November.
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HUFFPOST SUPER USER
Madagain
antirepublicanism
05:14 PM on 05/13/2011
ATTENTION PLEASE! I have come up with the perfect solution to our partisan and economic woes. It is a simple two step program anyone can see the genieus of. 1) Reduce the cost of incorporating to, say $1.00. 2) All Americans incorporate themselves. That's IT, that is honestly ALL there is to it. Then republicans will serve you no matter if you are dem. or repub.. Your income will immediatly increase, you will not have to pay taxes, and if you actually owe them just cheat, you will not be investigated (republicans will protect you) or prosecuted. You won't have to produce anything, so you won't have to hire those pesky employees, and won't need customers. You can just spend your day creating jobs with your tax cuts.That will also end unemployment, every one will be an executive and get outrageous bonesses. Medicare? Heck with that, you can just write yourself a voucher. Social Security? No problem, you will still get the same as everyone else, heck just have the republicans send you some trickle down money. We will all get to be arrogant and superior feeling. See, and everybody was all upset for nothing.
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HUFFPOST SUPER USER
lapdogs
Avid News Reader
06:24 PM on 05/13/2011
I always wanted to take a vacation in the Cayman Islands.

Now I'll have a reason to go there.
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09:16 PM on 05/13/2011
Why would I incorporate when all I really have to do is Unionize instead?

Free or almost free healthcare and pension benefits, able to retire at age 55 or 52 and I'm overpaid for the actual difficulty of the work I perform-and never work overtime unless it's double pay?

Sweet.

Yes, I'll simply unionize instead.
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HUFFPOST SUPER USER
Madagain
antirepublicanism
04:43 AM on 05/14/2011
Better yet, if you can meet the qualifications, you could get a job at McDonnalds.
IMOPINIONH8D
because I want it empty...
04:58 AM on 05/14/2011
You still have to purchase insurance. You will also have to work and you being a teapub you'll need to find some dems to pack you. Never met a teapub that could work, too used to having someone do it for them. Like their momma.
05:10 PM on 05/13/2011
Exactly what I have been saying for months - the Democrats are in a position to make demands, not the GOP. There is no way there benefactors would allow them to cause the US to default - absolutely no way. DEMOCRATS CALL THEIR BLUFF AND DO IT NOW!
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trisha16
more george bailey, less mr. potter
05:00 PM on 05/13/2011
why are they running the show? 80% of the people want medicare and medicaid left alone. this really kills me and i mean it will kill me (when i am retired if that can ever happen) if they get their way. we will be the first generation to not live longer than our parents. who would be able to pay the health costs?
i really hope obama does not cave in.
end all bush tax cuts...
04:56 PM on 05/13/2011
What is wrong with the Republican party? How can they claim to care about the economy, but at the same time offer up threats that would toss it even further into the crapper? Never in my life have I seen a group so blatantly against the working class. How are they even voted into office, when the working/middle/poor classes represent the majority?

It's mass madness, is what it is! And they're so forward about it these days. That's what kills me the most. They're so blunt in their willingness to utterly destroy what's left of the middle class. Their allegiance to big business has never been clearer. And yet they're STILL gaining votes. How is this even possible? How have the working poor become so co-opted into voting against their own self interests?
bmumfie1
The Right is always wrong!
05:15 PM on 05/13/2011
Avoidant:

Beautifully written and tragically true. The Republicans get more devious every day. If the Repubs win in 2012, this country is DOOMED! Keep up the good work.
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Hotspot
Righties, you can't eat or drink money.
04:50 PM on 05/13/2011
from the GOPblackmailers . . another condition.to raise the DEBT Ceiling

The Senate minority leader, Mitch McConnell, said Thursday that the debt ceiling debate provides Congress with a rare opportunity to make sweeping changes to entitlement programs and spending, and that he would not vote to raise the level without significant budget cuts and revisions to Medicare and Medicaid.

http://www.nytimes.com/2011/05/13/us/politics/13budget.html