The growing consensus among wingnuts that shutting down the government is the best way to handle the debt limit gives me a (political) erection. Do it. Shut it down. Stop those SS checks. Shut down all the services people need on a daily basis. Stop the payments. It worked so well for Gingrich.
The Democrats appear to have learned and will refuse to negotiate with the terrorists, so it will be all on the GOP. When the blue hairs stop getting their SS checks and the military has former Generals on every cable channel talking about how lack of funds is impeding their ability to perform their mission, it will truly be a site to see. Can’t wait for it.
Bring it on.
– John Cole of Balloon Juice.
I totally agree. The President should not ask for a debt limit increase. Rather, he should simply notify Congress that the limit has been reached and it is up to them to increase it so that the government can borrow to pay expenditures previously authorized by Congress
Our leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.
– Warren Buffet. Full article here.
The big benefit of the Boehner plan is that it is seen to be imposed – and the current GOP mindset is that it’s better to gain less by show of force than to get more by negotiation.
– David Frum
Update: Or how about this take along the same lines:
OK, here’s the deal: the nonpartisan Congressional Budget Office says that the GOP’s plan to cut the deficit at the same time as raising the debt ceiling will save a measly $850 billion over 10 years rather than the $1.2 trillion initially promised. That’s just a bit more than the annual expenditure on defense’s shiny toys and foreign adventures. The CBO says the Dem plan cuts $2.1 trillion over the same period.
So why are we still talking about the GOP plan as a serious option?
Did George W. Bush or Obama policies cost the most? Check out the numbers.
(Outside the Beltway via Newshoggers)
Writing in The New York Review of Books, Elizabeth Drew has penned the most insightful summary of the politics related to debt limit/deficit talks I have read so far. Worth a full read.
The question arises, aside from Obama’s chronically allowing the Republicans to define the agenda and even the terminology (the pejorative word “Obamacare” is now even used by news broadcasters), why did he so definitively place himself on the side of the deficit reducers at a time when growth and job creation were by far the country’s most urgent needs?
It all goes back to the “shellacking” Obama took in the 2010 elections. The President’s political advisers studied the numbers and concluded that the voters wanted the government to spend less. This was an arguable interpretation. Nevertheless, the political advisers believed that elections are decided by middle-of-the-road independent voters, and this group became the target for determining the policies of the next two years.
That explains a lot about the course the President has been taking this year. The political team’s reading of these voters was that to them, a dollar spent by government to create a job is a dollar wasted. The only thing that carries weight with such swing voters, they decided—in another arguable proposition—is cutting spending. Moreover, like Democrats—and very unlike Republicans—these voters do not consider “compromise” a dirty word.
The “no new taxes” pledge, penned by Grover Norquist, has been signed by virtually all the Republicans in Congress. Such pledges restrict elected officials’ ability to do their job, governance, by tying their hands. Exhibit A is George Bush’s Iraq war. No taxes have been levied to pay its still growing cost.
Thomas Friedman, with whom I often disagree, gets his take on this exactly right:
Did I mention that I’ve signed a pledge — just like those Republican congressmen who have signed written promises to different political enforcers not to raise taxes or permit same-sex marriage? My pledge is to never vote for anyone stupid enough to sign a pledge — thereby abdicating their governing responsibilities in a period of incredibly rapid change and financial stress. Sorry, I’ve signed it. Nothing more I can do.
GOP Senator Bob Corker (R-Tenn):
Our problem is we made a big deal about this for three months. How many Republicans have been on TV saying, “I’m not going to raise the debt limit.” You know, Mitch [McConnell] says, “I’m not going to raise the debt limit unless we talk about Medicare.” And I’ve said I’m not going to raise the debt limit until we do something about spending and entitlements. So we’ve got nobody to blame but ourselves.
We shouldn’t have said that if we didn’t mean it.
– Senator Lindsey Graham, republican
James Fallows studied economics in the seventies, as did I. His take on our current situation:
Those days of the 1970s are now nearly 40 years in the past. And this morning’s jobs report makes me wonder whether, as a political system, we ever learn anything. Even this basic thing: That when tens of millions of people cannot find work because of an overall “failure of demand” — not enough paychecks going to not enough people who can not make enough payments to create jobs for enough other people — the main problem facing the nation is not “runaway government spending.” Any more than it was when Herbert Hoover tightened up on spending as markets crashed, in the wave of folly that Keynes and Ahamed in their different ways chronicled. A lot has changed since the 1930s, and the 1970s. But not this basic principle.
Not only are corporate taxes not high in the US, as compared to the rest of the world, such rates in the US are substantially lower than all other countries save Iceland. Despite the claims of the GOP, given that the low effective US corporate tax rates already in place, closing corporate tax loopholes is well overdue.
… the Center for Tax Justice (CTJ) has crunched the most recent data from the Organization for Economic Cooperation and Development (OECD), the Office of Management and Budget, and the Census Bureau, and finds that “the U.S. is already one of the least taxed countries for corporations in the developed world.”
As a share of GDP, the U.S. had the second lowest tax rate, behind only Iceland. This statistic flips on its head the often-repeated Republican charge that America has the second highest corporate tax rate in the world (which is only true on paper). In 2009, U.S. corporate taxes had fallen to only 1.3 percent of GDP, from 4 percent in 1965.
The members of this movement have no economic theory worthy of the name. Economists have identified many factors that contribute to economic growth, ranging from the productivity of the work force to the share of private savings that is available for private investment. Tax levels matter, but they are far from the only or even the most important factor.
But to members of this movement, tax levels are everything. Members of this tendency have taken a small piece of economic policy and turned it into a sacred fixation. They are willing to cut education and research to preserve tax expenditures. Manufacturing employment is cratering even as output rises, but members of this movement somehow believe such problems can be addressed so long as they continue to worship their idol
– David Brooks, describing the behavior of a Republican party worshipping tax cuts above all else, including the welfare of the country.
Update: Paul Krugman responds. And Paul Rudman adds his thoughts:
The only objection I’d raise is that these are no longer characteristics of a “faction” within the party, they have come to characterize the party itself. It may be true that heretofore responsible members of the GOP were backed into a corner where they felt they had to adopt the Tea Party position on things like shutting down the government and defaulting on the debt or lose their jobs to a intra-party coup or a home-district primary. But at some point, that can no longer be an excuse. When all the party bigwigs take the position that closing tax loopholes must be accompanied by further tax cuts elsewhere, to make sure we get no deficit reduction from revenues, even saying that the American people “don’t want compromise” on maximalist Republican goals, then they can’t point to the Tea Party and say, “They made me do it!”
We’re at 15 percent revenue, and historically it’s been closer to 20 percent. We’ve never had a war without a tax, and now we’ve got two. Absolute bullshit.
– Former US GOP Senator and Obama bi-partisan fiscal reform commission co-chariman Alan Simpson.