Washington’s Mental Health Mess
As the capitol shows signs of awakening from the debt-ceiling fever dream with face-saving aspirin for both sides, onlookers try to understand the pathology of it all.
Like the final scene of “The Bridge on the River Kwai,” after crazed loyalties and pride have created carnage, a dazed survivor is left to wander through the wreckage, mumbling, “Madness, madness.”
As the Chairman of the Fed describes failure to raise the debt limit as a “catastrophic…calamitous…self-inflicted wound” to the economy, the President in his Weekly Address is virtually pleading for sanity:
“After all, we’ve worked together like that before. Ronald Reagan worked with Tip O’Neill and Democrats to cut spending, raise revenues, and reform Social Security. Bill Clinton worked with Newt Gingrich and Republicans to balance the budget and create surpluses. Nobody ever got everything they wanted. But they worked together. And they moved this country forward.
”That kind of cooperation should be the least you expect from us–not the most you expect from us.”
In a piece titled “Getting to Crazy,” Paul Krugman notes: “If a Republican president had managed to extract the kind of concessions on Medicare and Social Security that Mr. Obama is offering, it would have been considered a conservative triumph. But when those concessions come attached to minor increases in revenue, and more important, when they come from a Democratic president, the proposals become unacceptable plans to tax the life out of the U.S. economy.”
Washington insanity seems to be contagious as Rep. Sheila Jackson Lee finds racism in the madness.
MORE.
UPDATE: Washington’s focus on a posssible solution is accelerating. Note these stories:
–Congressional GOP Leaders Slowly Convincing Newer Members of Importance of Raising Debt Ceiling
–Top lawmakers target ‘grand bargain’ for debt plan
–House Republicans brace for compromise on debt
–James Joyner on Republican Leadership versus Young Guns
--Booman on the efforts by GOP bigwigs to get a compromise.
20 Responses to “Washington’s Mental Health Mess”
While I view the TP as racist in nature, I don’t see racism in this particular insanity.
The Fox News version of the TP would not exist in its current form if Clinton or Edwards would have won the nomination. Sadly, a small respectable group of concerned citizens were over run by racist nut-jobs after Fox starting pushing it.
That being said, I think the extremist nature of an extreme group of people is what is causing the current problem…not racism.
Once you have spent a couple of decades demonizing the adversary, it’s very difficult to collaborate with him…
After all would you collaborate with the anti-Christ, or with a communist sharia loving Islamist unamerican Mau Mau?
The House Republican leadership is demanding a “Balanced Budget” amendment to the Constitution as terms for agreeing to raise the debt ceiling. Getting an amendment to the Constitution passed and in place by the end of the month seems a bit of a stretch. It also seems counter intuitive for the Republican party to ask for this in the first place considering the Republicans have traditionally sold bonds for spending capital. The debt is actually principal and interest on bonds sold.
As well, balancing the budget each year, means no debt at the end of each year. The bonds sold are long term, generally twenty years. In effect, what they are saying is: “We will not sell any more bonds”. This will wreck havoc within our domestic financial markets. Raising or lowering interest rates by the Fed will disappear. The ability of the Fed to affect the economy’s business cycles will also disappear.
With the Supreme Court’s ruling under conservative leadership, that a business entity is a “person” as is each citizen voter, I’m a little under the impression that the Republican party’s future for America is something like a “Corporate Republic” rather than a representative democracy.
Allen,
You are incorrect on at least 2 counts.
1. The House Reps want the BBA passed. They don’t expect the BBA to affect this year’s budgeting process so that critique is meaningless. There are many critiques one can offer of this particular BBA although I think the general notion is a good one.
2. We currently have $14 trillion in debt. If we had a BBA, we’d have $14 trillion in debt basically forever. That debt would have to be rolled over as it comes to maturity and new debt issued. You seem to misunderstand how debt financing works.
I believe that the correct technical term is “fascist regime”…
SteveinCH,
BBA is hands down one of the stupidest ideas to ever come out of the Coservatard Party, It ‘ll make the 18th Amendment look like a well though out amendment…
OTOH, if you hate the American Empire, there is nothing that will destroy it faster than the BBA…
DQ, you don’t seem to understand that there is a real debt limit. That is, there is a fixed amount that any country can borrow, especially from foreign countries, before the lenders figure out that it’s never going to be paid off.
Anyway, the last time I saw a BBA, it made going further into debt only slightly more difficult.
S.J.RES.5 — Proposing an amendment to the Constitution of the United States requiring that the Federal budget be balanced. (Introduced in Senate – IS)
A) Who defines what GDP is?
B) 18% why? why not 15%?
C) 2/3 to raise taxes, that’s worked really well in California…
H.J.RES.2 — Proposing a balanced budget amendment to the Constitution of the United States. (Introduced in House – IH)
ROTFLMAO…
When is the last year in which we have not been at war with someone or under serious military threat?
We have two hot wars going on right now Afghanistan & Iraq, we are bombing the crap out of four other countries (Pakistan, Libya, Yemen & Somalia), and the Chicken-hawks are busy trying to figure out a way to get us sucked into another war in Syria, with the ultimate goal of taking on Iran…
DQ,
Once again, you must have missed the part where I said, “There are many critiques you can make of this particular BBA…”
The concept is a good one. This incarnation is a bad one.
As for your complaints.
1. I’m pretty sure we know how to do that. I can find you the data if you need it.
2. I agree 18% is arbitrary and wrong.
3. The implication you’d wish us to draw is that CA is undertaxed…sure doesn’t seem that way based on how much their citizens pay.
SteveinCH
An amendment to the Constitution means Permanent change, unless the amendment is repealed. Which is as hard as getting the Amendment in the first place!
Permanent means change the way the budget is managed by ensuring that the budget is always balanced. It does not mean “this” budget, it means every budget annually and each year is a new budget. It may come into effect later, but once in effect, it means the annual budget MUST be balanced. That Means No More Debt. You cannot have a balanced budget if you are creating debt. Therefore, selling bonds becomes illegal because the Debt is what is owed on the bonds principal and interest.
Which is fine by me if that 40 cents on the dollar shortfall comes out of defense and tax cuts to business and those with large incomes.
Allen,
Debt and deficits are different. The balanced budget amendment refers to deficits. If deficits stay at zero, debt stays constant. There is nothing in the BBA as drafted that suggests that the US will not be able to issue debt.
Indeed the US will continue to issue debt for cash management purposes, as most organizations do.
I’m very confident it will pass if the Dems allow it to come to a vote of the people of the various states.
SteveinCH says
Ok stop with the ignorant comments.
The deficit is the difference between what we owe on our debt and what we are actually paying on that debt. If you are in surplus you are reducing debt on an annual basis, if you are in deficit you are increasing debt on an annual basis. Right now, we are only paying the interest on our debt and actually increasing our debt to pay that interest along with our national budgetary obligations together. Save for the “unfunded” mandates.
We are currently, and, have been since president George W. Bush destroyed our budgetary surplus, increasing our debt because we are still borrowing money by selling bonds. If we are forced to “balance” the budget, we cannot increase debt, period. We MUST show a surplus. The Democrats want a gradual deficit reduction POLICY. The Republicans want a Balanced Budget Amendment to the Constitution.
Your terminology “roll-over” is common but technically irrelevant.
PS
You cannot “issue debt” and have a balanced budget. Unless you are talking about short term bonds made whole after each budget cycle. The very fact that your are creating debt means that you are still in deficit!
You are in la la land man.
Allen,
You are incorrect but I have no interest in continuing to try to explain it to you.
The deficit is the difference between receipts and expenditures. Interest on the debt is one expenditure. Other than that, the two have nothing to do with each other.
Peace.
SteveinCH-
Receipts and Expenditures?
Yeah, no kidding, and, when expenditures exceeds receipts the government borrows money by selling Bonds to make up the deficit difference. That deficit is debt!
The Deficit is exactly what we borrow as Debt to make up the difference between Receipts and Expenditures.
All that can be done is decrease fiscal expenditures and increase federal receipts by cutting cost and increasing federal revenue until we eliminate the deficit and reach a budgetary Surplus. Thus gradually reducing debt. Break even don’t cut it.
In a nut shell, the partisan argument about to cripple this country’s credit rating is; Where we cut costs and If we increase federal revenue.
We cannot cut social programs because our poor people cannot humanely sustain any more cuts. Everybody in this nation that are, “above board”, so to speak, must bear the burden equitably. Business, the working class, and, higher income classes, all get tax hikes. Cut Defense, all business tax loopholes and increase fees for gov services. Reduce the size of the military.
Might be a good idea just to go ahead and cripple this nation’s credit rating. Borrowing money won’t come so easy! We will just have to tax and spend rather than borrow and spend. Pay our bills as we go. Just like the Democrats have wanted to do all along!
Actually Allen, breakeven cuts it fine. We don’t need to pay off the debt, simply stabilize it. Over time, growth takes care of the rest. That’s pretty much what was done from the end of WWII to the 70s…no surpluses just no big deficits when the debt to GDP ratio went from over 100 down into the 30s.
Across the board tax hikes eh? Well, at least that’s fair, unlike what is being proposed on the left these days. I’d be fine with cutting tax expenditures as a way to raise income once we have some control over entitlements. Until then, it’s pushing string uphill.
As to your last sentence, it’s laughable. Since you aren’t interested in facts, I won’t bother giving them to you. Please feel free to live in your echo chamber.
SteveinCH
When I say tax hikes on the working class, I mean like 2% or so. When I say tax hikes on everybody else, I mean like 8% to 10%. Or, in other words, from those according to their means, to those according to their needs. Incomes under 75 grand get no tax hikes. Also, eliminate taxes on unemployment insurance payments.
Unfortunately the Republicans want to cut Social Security and Medicare. It can’t be done and remain a civilized nation! Medicare is expensive, but that’s because American Healthcare is way over the top expensive causing the high expense. Which brings us to healthcare reform. The only viable examples on earth are national health care systems. The rest don’t…well we are the only exception among modern nations and clearly it’s not working.
Allen,
Good to know the principles of Marx are close at hand for you. Not surprising but good to know just the same.
Once again you ignore the data and just assert what you think the answer should be. No surprise.
Good luck. I think SteveK can join the choir as can a few others here.
The principals of Marx? Ok ok so I baited you. In this circumstance, that particular principal applies well. I stand by it.
[shrug] Many actually believe that a) the federal entitlements are sacred(!); b) there is nothing wrong with them, structurally, and they are not unsustainable as other (truthful) people say; c) we can magically Improve our entitlements and our tax regime to be like that of Europe without the economic problems Europe faces — the problems are ignored because Europe is perfection on Earth; d) there’s no such thing as demographics eventually causing the pay-as-you-go entitlements that promise too much (they deny it) to fail. (Corollary: Greece’s recent fiscal and structural failure never happened; it’s just a right-wing myth and plot.)