A Recovery Menaced By Dysfunctional Politics

July 29th, 2011 at 11:28 am | 79 Comments |

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In a time of fundamental uncertainty, what do we know for certain?

No, that’s not a Yogi Berra kind of question.

Timing of passage of an increase of some size in the national debt ceiling remains uncertain.

Which side will blink first remains uncertain.

Final form of the legislation remains uncertain.

Market reaction remains uncertain.

But we do know some things for certain.

We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters.

We know that any real progress on the fiscal crisis the United States faces has evaporated.

We know that a downgrade of American sovereign debt by at least one major rating agency seems certain.

We know that on August 3, the borrowing ability of the Treasury ends.

From that point on, uncertainty reigns: will Treasury prioritize payments to its debtors; who will get paid first; more to the point, who will get paid after debt service payments are made and social security payments go out; who won’t get paid at all, or at least not on time and not in full?

This insanity occurs just as the Commerce Department released truly pessimistic economic news. Not only was gross domestic product in the quarter just ended at an anemic 1.3 percent, but GDP in the first quarter of this year was revised down from the earlier 1.8 percent to a truly weak 0.4 percent. Worst of all, the news was this: personal consumption, the driver of almost 70 percent of our economy, grew by only 0.1 per cent last quarter.

We asked this question four months ago: Would Democrats in Congress bail out Republicans on the debt ceiling increase? That question remains relevant. As the President pointed out in his brief remarks this morning, it is the House that has floundered. While his speech was another in the “I am the adult, you kids have to act” theme, he made the telling and scathing remark that while America has a AAA bond rating, it doesn’t “have a AAA political system.” It may be that the Speaker can get the final 6-7 votes he needs for his plan. It still faces death in the Senate.

Now that time has almost run out, due to Senate parliamentary rules and the threatened filibuster by some Republicans, what will Congress do? We expect some sort of Reid-McConnell agreement. We expect it to be filibustered through the weekend. We expect it to pass Monday or Tuesday. Then, will enough Democrats join with Speaker Boehner to pass the Senate bill? Or more crudely, will the Speaker risk his political future by discarding the 50-60 Tea Party-based members in his own caucus?

That final uncertainty will be resolved within the next week, probably with some short term extension that gains time, until the Congressional August recess really begins on August 8.

But one certainty, sadly, endures. America’s political dysfunction has now begun to threaten the nation’s economy and the underlying strength of the dollar. Neither party wants to give up what it thinks will be a winning political message next year. The Democrats, led by Sen. Chuck Schumer, want to be able to pound Republicans as granny-killers. The Republicans want to be able to hit Democrats as virtual socialists who want more spending, more taxes, and more centralized control. As usual it will be a battle of caricatures, pushed with literally hundreds of millions of dollars in advertising.

We wrote several times earlier this month that the debt ceiling increase would pass. We noted that it would be done by Congress in the most painful, economic harmful, and distressing manner. That forecast has now been validated.

We wish we had been wrong.

Recent Posts by Steve Bell



79 Comments so far ↓

  • Reflection Ephemeral

    “We know that both extremes of both parties…”

    This is false equivalence.

    The decision to create a crisis was a decision of the Republican Party.

    The Democratic Party has, with the Reid plan, offered a deal that is trillions in cuts (one can reasonably take issue with the headline number, but it’s something) without any additional revenue.

    Given that everyone knows the debt ceiling needs to be raised, and that the Democrats would therefore have been justified in declining to bargain at all, this is a substantial compromise by the Democrats.

    You are deceiving your readers when you write, fancifully, without substantiation, of “the extremes of both sides.” This is false. It is House Republicans who are willing to risk America’s trustworthiness in financial matters.

    • medinnus

      +1 — And more to the point, the rest of the country knows whose to blame, too. The usual 25-30% support the GOP no matter what, and the rest of them pretty much blame the Tea Baggers.

      C’mon 2012

    • gocart mozart

      I suppose in Steve Bell’s formulation, a vote on a clean bill to simply increase the debt limit like has been done over 70 times before is the radical left-wing position. Why does Steve Bell think Ronald Reagan is a communist?

    • think4yourself

      Ephemeral – also +1.

      This was all created by the GOP/Tea Party to prove to their base that they are serious by doing something unserious. Certainly there are Democrat extremes, but they have no influence in this issue (something they are regretting and it is costing the President support).
      First the President wanted a clean increase the debt. The GOP rejected that. Then the President engages in negotiations for debt reduction with revenue enhancements; not even tax increases, but closing loopholes. The GOP rejected that. Then the President goes for a “Grand Bargain” – really cut the debt and give the GOP what they say they really want, big deficit reduction along with a much smaller amount of revenue, but not tax increases. Boehner walks away (that could have passed the House Bi-Partisan but with no Tea Party). Now Harry Reid is proposing debt reduction with no revenue increases, but the Tea Party won’t accept that either unless includes a balanced budget amendment (those have worked really great for the states, right?) and a chance to do this all over again in 6 months.

      False-equivalence is right.

  • wileedog

    “The decision to create a crisis was a decision of the Republican Party.”

    This.

    The Republicans pulled the pin on this grenade. They can put it back in any time they want.

    You can’t blame Democrats for not fully surrendering to madmen if it goes off.

  • balconesfault

    The right term isn’t “menaced”. The right term is “targeted”.

    Right now the GOP has settled on economic disruption as their primary tool for unseating Obama in 2012. The people are collateral damage.

  • rbottoms

    “We know that both extremes of both parties…”

    Bullshit.

    There is just one extreme party of thugs and economic terrorists, and you’re a member of it.

  • Frumplestiltskin

    reflection nailed it and Bell screwed up what was otherwise a good article with that whole it is both sides fault.
    Where is it written that the debt ceiling increase has to be matched dollar for dollar in revenue offsets? Nowhere. And beyond this, Republicans insist it has to be dollar for dollar in cuts only. Even then Democrats met those demands with the Reid plan but Republicans are claiming the defense savings that they themselves embraced for their own plan are not valid for Reid’s plan.
    History will not be kind to this sorry ass lot of teabaggers, don’t pretend otherwise.

  • JimBob

    We are going to lose our AAA rating regardless. Obama and the Democrats plan to add 8 trillion to our debt over the next 10 years. That’s simply not sustainable.

    Unless Entitlements are reformed they will take the country over the cliff. Right now they consume all the tax revenue Washington collects. We borrow from the rest of the world for everything else.

    The Democrats think entitlements are just fine listening to Chuck Schumer and Debbie Wasserman Schultz. Both are horrible demagogues.

    Clinton used the mediscare game to win reelection in 1996. But by doing so blowing a very good shot at reforming the system. Clinton knew the actuaries were saying Medicare is facing major problems in the future, but decided to kick the can down the road. Now he’s trying to be a statesman recognizing its just not sustainable.

    • sublime33

      And any changes in the tax code are off the table? Exxon/Mobil still gets a discounted tax rate? Hedge fund managers still only pay 15% income tax?

      • JimBob

        Tax reform will be a net positive in solving the debt problem. Lower rates and get rid of the subsidies and loopholes. Democrats used to have people like Senator Bill Bradly that understood that the tax code is not very efficient and causes all sorts of distortions.

        • sublime33

          So if tax reform is a “net positive”, who winds up paying more? Awaiting your question dodge.

        • tommybones

          Jimbob is retired and admittedly “financially secure,” so he could care less if these “reforms” cause massive suffering and hardship to millions of his fellow citizens.

        • JimBob

          Well even under a two rate flat tax the wealthiest will always pay more. The problem with the current code is that the wealthy shelter lots of money that could be used for productive purposes. Also we’ve distorted the code so much that 50 percent of the country has no skin in the game.

        • tommybones

          Jimbob continues to put forth the complete myth that 50% of the country doesn’t pay taxes. As if the only tax in the country is income tax. Seriously, one wonders if he’s actually a liberal pretending to be a conservative whackjob to make Conservatives look even more foolish.

        • think4yourself

          @ JimBob: “Tax reform will be a net positive in solving the debt problem. Lower rates and get rid of the subsidies and loopholes.”

          Seems to me that Obama offered that as part of the Grand Bargain. As did the Gang of 6, as did Bowles Simpson (scuttled by the GOP).

          Now you’re going to say Obama wasn’t serious and that any savings would have been a shell game and not real. Unfortunately Boehner walked away from the deal instead of negotiating 4-1 cuts to revenue increases and making spending cuts come now versus in the out year’s. If Boehner and the Tea Party were serious about financial reform, they would have negotiated a good deal and forced the President to deal with unhappy Democrats – but they didn’t.

        • JimBob

          Bottom line Obama rejected his own Debt commission plan for the simple reason it did deal with Tax reform and reformed entitlements. There are too many Democrats that think the current Medicare system is just fine.

          It we want to get out of this mess we need to have the economy growing at 4 percent or higher. That will create new jobs and throw off lots and lots of revenue. Tax reform. Then we need to raise the age for Social Security and Medicare. And Seniors need a lot more choices within the Medicare system. Establish a market with subsidies.

        • tommybones

          JimBob, learn to read. I’ll repeat it for you:

          “Jimbob continues to put forth the complete myth that 50% of the country doesn’t pay taxes. As if the only tax in the country is income tax.”

          Your response? Focused solely on Income Tax. Proving my point….

    • D Furlano

      Lets recap how many times you have been wrong.

      1) The US is going broke or insolvent.
      2) Printing money will cause inflation or hyperinflation.
      3) Our grandchildren will have to pay for our debts.
      4) Reducing the debt will increase jobs.
      5) The bond markets will no longer buy our bonds and something bad will happen.
      6) The cause of the current economic situation is the government is too big.
      7) Business won’t hire becasue they are uncertain about the taxes, the debt or something.
      8 ) Freddie and Fannie caused the housing bubble.
      9) Quantitative Easing will cause inflation.

      I am sure I missed a few… but now

      10) The US will lose its AAA rating regardless of the current debt ceiling issue.

      You’re wrong again and again and again and again and again…

      • JimBob

        And I’ve been right on everyone of them. Except I never said Fannie and Freddie caused the bubble. The FED did. But Fannie and Freddie are major players in the housing bust. Lending money to people that had no business getting home loans. It was so bad that even Saturday Night Live was making fun of the housing crisis doing a skit about bums getting home loans.

        http://adisgruntledrepublican.blogspot.com/2008/12/snl-housing-bailout-skit-hilarious.html

        • D Furlano

          I stand corrected: you said the Fed caused the housing bubble. Which is still wrong.

          Also, I don’t expect you to realize you’re always wrong. I would just like everyone else to realize that you’re always wrong. And that you get your wrongheaded information from the idiots at the von mises institute.

        • D Furlano

          And SNL.

          Nice reference to Krugman. Someones transcript of a German interview?

          Anything von mises produces is either an outright lie or an extreme extradition.

        • JimBob

          Kid, the FED is responsible for the bubble in housing. The Princeton clown himself even knows it, Paul (I’m not an idiot) Krugman.

          http://blog.mises.org/10153/krugman-did-cause-the-housing-bubble/

      • Chris Balsz

        2) Printing money will cause inflation or hyperinflation.
        3) Our grandchildren will have to pay for our debts.

        For a start, I’d like to hear how there is any doubt these two are true.

        • Rabiner

          Except inflation isn’t really bad in small amounts (2-3% is typically desired).

          Hyperinflation is terrible but not quite as bad as a deflationary cycle.

    • Solo4114

      Obvious troll is obvious.

  • sublime33

    What if the Democrats had pulled this same stunt five years ago and refused increase the debt limit unless Guantanamo was closed? You would have been screaming “How can the Democrats hold the country’s economics hostage so you can force the passage of legislation that they couldn’t have achieved through the normal political process. And I would have been just as pissed as you would have been. And you wouldn’t have trotted out the “both sides do it” crap either.

  • Traveler

    What the F is the matter with FF columnists? JJV and JG are just plain batcrap wrong, and not even worth reading anymore. Only the comments for their posts are worth reading. Bell used to be pretty reasonable, but now this false equivalency is just total crap. Guess you poor refuglicans just cannot handle the reality of your own party. Still going to pull the lever, Stevie?

  • ggore

    By saying “Not no, but HELL NO!” to EVERYTHING the President has proposed in his presidency and then blaming the lack of progress on him; by trying to perpetrate a lie that it is the President’s job to propose something and write the legislation when everyone knows it is the Congress’s job to do that; and by putting a gun to the head of the American people’s and their pocketbooks again, after letting Wall St ruin the financial wealth of 90% of the country and most of the planet in the ’00s, the Republican party has completely lost whatever support they used to have from this voter with this little farce.

    I used to vote for a Republican now & then, based on what kind of person they were and whether I thought they were the right person for the job. Now I just don’t think I can do that any more.

  • medinnus

    “But making nebulous calls for centrism, like writing news reports that always place equal blame on both parties, is a big cop-out — a cop-out that only encourages more bad behavior. The problem with American politics right now is Republican extremism, and if you’re not willing to say that, you’re helping make that problem worse. ” — Paul Krugman

    http://www.nytimes.com/2011/07/29/opinion/krugman-the-centrist-cop-out.html?src=ISMR_HP_LO_MST_FB

    • Traveler

      Yeah, several days ago Martell at BBC argued that revenue increases were “out”. According to who, asshat? Not the majority of Americans, but I guess they don’t matter to BBC. Its amazing how the MSM has so totally dropped the ball since BO was elected. They have continually allowed the extreme position to set the center. Good negotiation tactic for the radicals, but why do seasoned reporters buy it? Trying to be “evenhanded” just turns everyone off. Time for NYT and WAPO to be as “forthright” as Faux. They already lost the Faux readers, so why try to placate them, especially when you have to be disingenuous with this false equivalency?

      The third estate has completely lost any credibility.

  • TAZ

    A demand to not only vote on a Repub BBA, but a requirement it is enacted in return for a debt ceiling increase……..

    Hmmmmm

    I dont know how much more the Dems could give short of disbanding the party, all Dems resigning, and any left over funds be deposited into the RNC checking account.

    • Pavonis

      Don’t the idiots in the GOP caucus realize that a Constitution Amendment requires 2/3 support of both houses of Congress to be sent to the states? And why do they think that their “Balanced Budget Amendment”, no sorry, “No New Taxes Ever, Dismantle the Entire Safety Net Amendment”, has any chance at all of getting Democratic votes? Maybe next the GOP caucus will take a nice, long drink of Kool-Aid.

    • sublime33

      Agree to a one party dictatorship with no more elections? With Roger Ailes or Rush Limbaugh as dictator.

  • tommybones

    “We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters.”

    Unbelievable. Such obvious nonsense. It amazes me how anyone who expects their analysis to be taken seriously can write these words in a public forum.

  • MaxFischer

    “We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters…”

    I quit reading after the statement above. This statement could not be more disingenuous.

    The Republicans own the debt-ceiling crisis full-stop and anyone with a functioning brain knows this. It should also be plainly obvious that there is no possible way the Repub’s can win this fight. Look for one of the following things to happen by Sunday night:

    1) The house bill passes, gets passed to the Senate and promptly fails, gets re-written to the Senate’s liking and is passed back to the House to pass with Dem and sane-Republican support.

    2) A single-page bill to increase the debt limit without spending changes in introduced in the House and passes with Dem support.

    3) Obama invokes the 14th amendment and calls it a day.

    Bottom line: The US will not default, debt ceiling or no. There is no possible way for the R’s to come out ahead in this fight that they themselves have picked. Not only that, Obama is likely come out of this looking like a hero to anyone who isn’t a tea-party member. Couldn’t happen to a nicer group of people. Look for some career changes in 2012 for those involved in instigating this mess.

  • Graychin

    “We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters…”

    “False equivalence” was the phrase that popped into my mind immediately when I read this phrase.

    Right now the House Republicans are focused on passing a bill that has zero Democratic support and which will not even see the light of day in the Senate. This is not the thing to be doing as time is running out.

    To attract a few more Republican votes, Boehner has made his bill even more odious. This is supposed to represent progress?

    • jamesj

      Well said. They are working on proposals that are not favored by the President, Senate, American people, markets, rest of western civ, or even older Republicans like myself. I can’t believe they have the balls to run down the clock in this manner and drop an unacceptable bill in the country’s lap with a few seconds remaining in the game. Truly pathetic. But they’re doing it because they’ve caught wind of the fact that they CAN. They know they have leverage over a frightened country and world. At this point, the majority opinion in the country and world can just go die for all the House cares. I’m glad we elected these people to serve us.

  • Rob_654

    This entire mess is strictly at the feet of the Republican Party.

    The Democrats have given up ground to try and reach a deal but as with any negotiation they are not going to give up everything and just say “yes” because the other side is essentially trying to blackmail them.

    The Republicans are only going to work with one side of the balance sheet and are completely opposed to asking the wealthy to do anything.

    So you are very, very incorrect with your belief that this is due to both parties – it is due to One Party – the Republicans.

    • laingirl

      I agree, it is blackmail pure and simple. There is no other term for what the Tea Partiers are doing.

  • jamesj

    “We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters.”

    How do people keep writing rubbish like this and manage to sleep well at night. You are doing your country a great disservice in keeping this tired trope going against all available evidence.

    We have seen no extremism from the left during this debate. If anything, most of the criticism I’ve seen from both right wingers and left wingers is that Obama and the left gave too much, too soon, and were too civilized in their opening gambits, being naive to the true mind-boggling extremism of the House Republican caucus. You can’t have it both ways. You can’t criticize the president and the senate for being a push over and then simultaneously criticize them for being “extreme”.

  • Solo4114

    “We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters.”

    Not just wrong, but dead wrong. And likely knowingly wrong, to boot.

    Come on. I understand the need to appear “reasonable.” It’s one of the reasons I try to restrain my own penchant for swearing like a truck driver, as I sometimes do in political discussions with friends, when I post here. But there’s a big difference between appearing reasonable and simply being disingenuous.

    The GOP runs the House. The GOP has refused to budge on ANY compromise in the House. The House GOP is what is holding up this process, and it is the House GOP that continues to make ridiculous, idiotic demands like the PASSAGE — not simply a vote, but actual PASSAGE — of a BBA before the debt ceiling is increased.

    You cannot with a straight face claim that “both parties” are to blame for this. The left has been remarkably quiet, or at least remarkably ignored in the midst of this. By contrast, the Tea Party sets overall GOP policy now merely by refusing to budge. And to the present, Boehner and the rest of the cadre who might otherwise make a deal have put party unity ahead of averting default, credit downgrade, and major global economic disruption.

    I suppose, if you want to be “fair,” you could try to argue that the Dems have not simply voted for every Republican proposal and that therefore they are “equally” to blame…but that would be akin to saying that it wouldn’t be rape if she’d just quit struggling and say “Yes” already. Technically true, but still…disingenuous at best.

  • rbottoms

    [blockquote]When Republican House Majority Whip Kevin McCarthy showed the scene at a Tuesday meeting, the idea was to urge freshmen and Tea Partiers to drop their opposition to House Speaker Boehner’s debt ceiling plan. The scene chosen from the film shows Affleck unenthusiastically inviting another bank robber to commit a crime, who promptly agrees by asking, “Who’s car are we going to take?.”

    At least one member of Congress, Rep. Allen West, said he liked it and was moved to side with the Republican plan, adding “I’ll drive the car.” Stewart was amazed:

    “Quick Robin! To the Batshit mobile!”

    http://www.huffingtonpost.com/2011/07/29/jon-stewart-breaks-down-gop-the-town-_n_913013.html/blockquote

    Who’s extreme?

    Well one side of the debate is working on behalf of the American people, as usual, while the other half thinks a movie about a bunch of f*****g robbers dressed as nuns who die in a shootout while trying to murder policemen is inspiring.

    What next, Anders Behring Breivik as spokesman for the NRA?

    Shitheads.

    P.S. Your HTML tag system still sucks donkey.

  • valkayec

    Okay, I’ll be the lone defender of Mr. Bell. He is right that the extremes of both parties are at fault. Certainly, 99% of the fault for this situation that the world is shocked by and shaking their heads at is caused by the hyper-partisan antics of the Tea Party GOP. The whole House bill is a farce, not just because it won’t pass the Dem controlled Senate, but because it’s a failure for the economy and families as well as being totally irrational. Given the revised lowered economic number announced today, the House GOP plan with its deep cuts beginning next year will push the economy back into recession. Or what PIMCO’s El Erian said is a debt trap – I think that’s the term he used.

    But the far left faction of the Democratic party is also holding on to the notion that there must be absolutely no cuts or changes to Medicare/Medicare. Yet, health costs are estimated to be 20% of GDP by 2020. Major changes to the entire health care system is absolutely necessary while still protecting average families from increased costs. Transferring higher costs to families and seniors, while maintaining the same system that increasingly surpasses inflation by double digits, is unacceptable by any reasonable person. Still something major must be done, rather than just saying no adjustments or changes. I know, I know the ACA helps – but it’s not enough. And yes, the far left need to accept that the debt is just too large and harms future economic stability and work to figure out how to reduce the debt and reform the entire economic system to make it more efficient and effective for every family.

    Both the extremes of each party need to be dumped for sheer economic reasons…along with all the PACs and others advocating for irrational positions. (Although as long as the far right – think Freedom Works, Club for Growth, AFP, ALEC & Norquist – continue to exist, the Dem groups need to push back just as hard. But wouldn’t it be nice if they were all to disappear?)

    • rbottoms

      But the far left faction of the Democratic party is also holding on to the notion that there must be absolutely no cuts or changes to Medicare/Medicare.

      Would that be the party whose president agreed in talks with Boehner to raise the retirement age for Social Security and was ready to work out cost of living adjustments?

      Bullshit. Bullshit. Bullshit.

      • valkayec

        Look, I’m not saying Obama failed to make changes; what I’m saying is the far left screamed angrily about those offers. That’s a problem too. Just as Tea party senior citizen screaming “stop the spending, no new taxes” and “oh, don’t touch my Medicare.”

        I absolutely support the President’s balance approach of 3 to 1. Every level headed economist does as well. But let’s be honest here, the far right and far left aren’t living in an economic reality. (Although I submit the far right is living somewhere far, far outside of the galaxy as compared to the far left.)

        • rbottoms

          Look, I’m not saying Obama failed to make changes; what I’m saying is the far left screamed angrily about those offers.

          The “far left” doesn’t elect it’s idiots to Congress where they can actually write laws and do anything more than complain. And who actually gives a shit about complainers? The “Contrails” nuts complain.

          No. Comparison. Whatever.

        • valkayec

          Just goes to show how much more rational Dems are, doesn’t it. Regardless, hyper-partisanship is an issue that should and must be addressed honestly. We’re seeing now from the GOP just how harmful it can be.

    • wileedog

      Its the extreme right that created this “crisis” in the first place. Congress not raising the debt limit to cover costs already authorized by itself and throwing the economy and possibly world back into recession or worse is insanity. Period. The extreme left shouldn’t have to bend over backwards to concede ANYTHING to make the extreme right not shoot us all in the head. And the fact that they have in fact made several huge offers that were spit back in their face only makes it worse.

      If this conversation was happening during the normal budgetary procedure (you know, when it actually should be happening) you could start pointing fingers about why budget talks are stalling. But in this case, in this 100% GOP manufactured crisis, the extreme left is in no way obligated to try and prevent the Tea Party Republicans from being morons.

      • valkayec

        I agree. But what Mr. Bell was saying, as I understand it, is that both the far right and far left have unreasonable ideas. Nevertheless, the far right is light years beyond the unreasonableness of the far left.

        • Solo4114

          Well, his specific quote was:

          “We know that both extremes of both parties are willing to risk America’s trustworthiness in financial matters.”

          I don’t think that equates to “Both parties have unreasonable ideas.” More that both parties are willing to either enact truly damaging ideas that would harm America’s financial position, or perhaps that the extremes of both parties are sufficiently intransigent that they’ll allow a default.

          While it may be true — or at least debatable — that the left would love to enact policies that would (in some people’s opinions) harm the financial standing of this country, they also are not demanding that no quarter be given in this debate. Even the Krugmans and Reichs and Wasserman-Schultzes of the left appear willing to at least give ground, and therein lies the key difference: one side accepts political reality and the other side does not. One side is willing to deal and give up ground, and the other side is not.

          So, again, while it may be technically true that both sides have extreme positions, the practical impact of those positions is NOT equivalent, and thus both sides are NOT equally willing to risk the financial security of the United States of America. If Mr. Bell is referring to the fiscal soundness of each sides’ extreme positions, he should specify as much instead of using an ambiguous turn of phrase that seems to create a false equivalency.

        • MaxFischer

          “…both the far right and far left…

          Not to belabor the point, but who exactly is “the far left” and what have they proposed that is anywhere near par on the crazy scale as that proposed on the right? I ask not to be snarky but cannot identify a left equivalent of intentionally defaulting on public debt or amending the constitution to avoid doing so.

  • Oldskool

    [blockquote]Let’s look back at how the Republican-led Congress dealt with the debt-ceiling increase in 2003 — a year before George W. Bush would seek a second term.

    Here’s an article the Washington Post ran in May 2003:

    Just hours after passing one of the biggest tax cuts in history, the Senate approved an unprecedented increase of nearly $ 1 trillion in the statutory limit on government debt, prompting Democrats to try to embarrass Republicans by linking the two milestones.

    The bill, approved 53-44, goes to the White House in time to be signed into law before the administration runs out of maneuvers to avoid the risk of another first-ever event: financial default by the U.S. government. […]

    After the vote, Treasury Secretary John W. Snow hailed the Senate action, saying, “today’s action prevents uncertainty that would adversely impact our economic recovery.”[/blockquote]

    http://www.washingtonmonthly.com/

  • Primrose

    Exactly Solo4114.

    I also don’t understand why trying to close loopholes on corporate jets and hedge fund managers is extreme. I don’t understand how slight tax increases are extreme.Eisenhower 90% tax rates that would be extreme. What democrats have is a position.

    Time to stop looking away from the abusive practices of your fellow party members, Mr. Bell and start calling them on it.

  • think4yourself

    @ Steve Bell:

    “We know that any real progress on the fiscal crisis the United States faces has evaporated.

    We know that a downgrade of American sovereign debt by at least one major rating agency seems certain.”

    We all beat on you pretty bad for blaming extremes in both parties (in my view there are Dem extremes, but they ain’t driving the bus). However, I’ll also add these other two points above. We don’t know for sure that real progress on fiscal crisis has entirely evaporated. Some of us are hopeful that once this silliness is finished that the sane minds could address the several substantitive proposals for deficit reduction. Gang of 6, Bowles/Simpson, Rivlin/Deminici and David Walker’s Comback America Initiative http://www.tcaii.org/UploadedFiles/PlanAandBReport.pdf. A good Tea Party slap down by GOP moderates might actually lead to addressing the deficit in a bi-partisan fashion.

    The other point was that a downgrade by a rating agency seems certain. I don’t think anything is certain. If they increase the debt limit until after the next election, I don’t think you’ll have a downgrade. If the debt limit has to be revisited in 6 months then it’s possible but I think the President can use the bully pulpit to put pressure on the ratings agencies not do to so – for example if the President said: “We have averted default. Yes, it was messy and difficult but the United States has always paid it’s bills and will always pay it’s bills on my watch. To those credit agencies looking at the US, we have NEVER not paid our bills and the full faith and credit remains unshaken. Note that if you did decide to adjust those ratings that it would raise interest rates on millions of Americans, hamper growth and make the financial situation throughout the entire world more precarious. Again the US has always paid all of it’s bills and will continue to do so.”

    After a speech like that, I don’t think Moody’s & S&P would dare lower the ratings.

  • tlnixon

    Jimbob—you tax statement is BS.
    Here is the deal and as someone said Income Tax is not all:

    • 23% pay nothing because they’re poor. A couple making less than $19,000, for example, doesn’t owe anything after their $11,600 standard deduction and two exemptions of $3,700 each reduce their taxable income to zero. As Bob Williamson puts it, “The basic structure of the income tax simply exempts subsistence levels of income from tax.”
    • 10% are elderly and pay nothing because their Social Security benefits are exempt from federal income taxes.
    • 7% pay nothing thanks to provisions in the tax code designed to benefit low-income families: the earned income tax credit, the child credit, and the childcare credit account.
    And the other 6%? Their taxes are zero for a variety of reasons: above-the-line deductions and tax-exempt interest; itemized deductions; education credits; other credits; and reduced rates on capital gains and dividends.

    • JimBob

      Google (close to half pay no income tax)Good gravy

      • sublime33

        “Google (close to half pay no income tax)Good gravy”

        If that is the basis of your argument, Google “Santorum”.

  • tlnixon

    Jimbob–where you gonna be the next 4 years!!!!!!

    Watching B. O. M. !!!!!! Read em an weep!!

  • anniemargret

    Here’s today’s Republican party: Extremists + Enablers

    Which = Phony Patriots

    So we got David Frum and others here lamenting (a little) that they got some whackos in their party (the majority), who are willing to bring the country to its knees and implode it from within, while crying wolf every time a Muslim name is brought into discussion. Amazing….

    Perhaps they truly believe the average American is as foolish and gullible as the ordinary tea party devotee…. they are not and it will show come election time.

    We don’t need high stake gamblers in the halls of DC or whiny adolescents who can’t even clean up their own mess without blaming it on others. A pox on the GOP!

    • FosterBoondoggle

      Anniemargaret – The average voting American is as foolish and gullible as the Tea Party. That’s why we now have a GOP majority in the House and in lots more states than in 2009. They heard “death panels” and “sharia law” and voted for the goons. It works every time, and I fear 2012.

  • Houndentenor

    How do we manage a country when the right believes the left is evil and out to destroy America (and vice versa) and the middle is tuned out?

  • nwahs

    “We are going to lose our AAA rating regardless. Obama and the Democrats plan to add 8 trillion to our debt over the next 10 years. That’s simply not sustainable.”

    Really? Provide proof for that. How much is sustainable? You have all these Tea Party types acting like they’re economists and they don’t know jack shit about the economy.

    Take the case of Tea Party Congressman Joe Walsh. He’s a got a very big mouth but when asked a pointed question about the economy (like how big is it) he doesn’t know.

    http://www.theblaze.com/stories/rep-joe-walsh-blasts-chris-matthews-obama-doesnt-send-a-thrill-up-my-leg/

    How big of an idiot does a tour of cable news lecturing people on the debt crisis and has no clue the GDP of the United States?

    So let me ask you Jim. What type of debt is sustainable? You see you don’t have to know anything about the economy to walk around say debt is bad. But if you want to get down to the nuts and bolts, you’re going to have to know a little about the economy, unlike dead beat dad Joe Walsh (http://www.spokesman.com/blogs/hbo/2011/jul/29/deadbeat-dad-house/). Some debt is actually good for the economy.

    So tell me, Jim, how much debt is sustainable for an almost $15 trillion economy and how did you come to that conclusion?

    • Chris Balsz

      We last raised the debt limit by $1.9 trillion in February 2010. That’s exhausted 18 months later. That’s $105 billion in debt a month.

      36 months at that rate would be another $3.78 trillion in new debt, for a total of $18.38 trillion.

      If the economy grew at 4% a year for three years (which it won’t) that would be a $16.87 trillion economy in three years.

      • nwahs

        Why can’t the United States manage a 18 trillion dollar debt with a 16 trillion dollar GDP? What happens? Nothing. This isn’t about finance. This is about Congress exercising their power over the budget, and we are unfortunate to have a Congress full of intellectual children.

        The dollar isn’t weak because of the national debt, but try to explain that to a 1776 costume wearing fool.

  • Lonewolf

    Recovery? What recovery? Statistic after statistic shows that ONLY two parts of the American economy are in recovery – executive compensation and corporate profits.
    Virtually all other indicators – domestic employment, jobs lost overseas, mean wages, personal debt, foreclosures, exports, imports, GDP, M1, tax revenue, unfunded federal and state liabilities, etc. etc. show that the US is still sunk in recession, and probably sinking deeper.
    And the Tea People who think basic economic laws can be flouted at will are determined to turn the situation into a full, worldwide depression.
    And today it was revealed that one single company – Apple – has more cash on hand than the US Treasury.

  • Last Puritan

    This may not be so bad after all. The Parties are ossified and that’s probably unavoidable.

    A 3rd Party might just happen. It’ll probably benefit Democrats at first, but that’s likely to be short-lived. Republicans may whip, but Democrats suffocate. You can actually survive a whipping. The menace of War must one day end, but the menace of Obamacare lives forever!

    Our obligations have become constraints and as far as the future is concerned, revenue grabbing can’t really ease those enough to matter. To quote David Stockman: “no one really knows what’s going on with all these numbers.” The way out is a wide tax-base (tons of private sector jobs) and just enough debt to progress.

    I envision a 3rd Party that takes the best from both the Grand Old Parties and synthesizes.

    The social problems we have can’t be solved by dictate. Let women destroy their offspring if they choose. Just forbid them from doing so after 10 weeks.

    Let Gays marry. I would never teach my child that anal penetration is at parity with coitus. I would teach him that it’s a gross misuse of faculties. But I don’t want to exile based on a misuse of faculties.

    And heterosexuals threw marriage away. It’s the main reason Gays (Bears and Cubs and Twinks, oh my!) now find it so attractive. If it meant what it meant 60 years ago, they’d be skidding their bald tires all the way to the Estate Tax Attorney with ‘nary a peep!

    This 3rd Party would reject the corrupted aegis of civil rights that mugs and robs a dyslexic of what he’s rightfully earned. It’s repugnant! We’d be like Cal Tech of old, or maybe still is: You’ve got the IQ and no money. We’ve got you covered. Don’t have the IQ, then go to State college, kid. Now each of you go do Chester proud!

    This 3rd Party would emphasize the stewardship of land and resources each human being is duty bound to realize and honor. But admit that progress, that is, the spread of comfort and leisure, carries a price. And that we have to be willing to pay that price with the same sentiment and actions with which a just warrior acquits himself in a just war. The Great Lakes would be sacrosanct.

    We don’t want to live like Mexicans in Mexico or Cubans in Cuba. We’re an ambitious people. From subsidizing international defense to competitiveness in fields of research, our ambition has benefited the whole world.

    But, you know what, Mr. Bell?

    Here’s what should be written in the Platform of this new 3rd Party. We could call ourselves The Heirs.

    **We reject The Doctrine of Ultimately Good and Plenty Wasteful Spending. Defined as Wasteful spending is better than no spending at all!

    It is indecent!

    It is indecent in the same way the proposition that a man is kinder to his wife when he has a mistress is indecent. It may be true that the needs his wife can’t fulfill are no longer an obstacle, and that this eliminates his angst and causes him to relax and remember that she’s the Mother of his children, and from this his renewed tenderness springs, but the proposition is only “true” insofar as any half-truth can be true. And it is the spiritual and material ramifications this doctrine neglects to consider, and the social degradation it courts, that make it indecent.**

    Yes, in the end we certainly all will be dead. But as anyone who has witnessed death will admit, it matters how a person dies. And if resurrection is essential, it matters how a Nation dies too.

    • Steve D

      This is exactly why we’re in such a mess. There’s almost nothing about the economy, and nothing at all coherent, but plenty on sex.

      “I would never teach my child that anal penetration is at parity with coitus.” No, you’d have to know what the difference is to do that.

      As long as the Republicans give lip service to opposing abortion and gay marriage, they’ll get votes. They won’t actually do anything, because then people might actually care about jobs and the economy instead.

    • Lonewolf

      Your incoherent, homophobic ramblings are of no interest to anyone but yourself. Learn to express your ideas in a logical, followable, non-hateful format or STFU.

  • SFTor1

    This is what we know: the Republican Party has moved the agenda so far to the right that it now takes the peculiar position that no tax loophole can be closed, and that no tax benefit, no matter how frivolous, can be revoked.

    The history of this country resoundingly asserts that taxes on individuals and corporations are variable. They are adjusted according to the needs we have as a nation at any given time.

    Money we pay in taxes remains our money. We manage that money through our elected representatives. The real story is that the legislature has for a long time not been willing to level with the public to make it clear that whether we are overspending or not is a question of what we as a nation want to accomplish together, and which services we want to provide to all Americans.

    Now Tea Party Republicans have dug themselves in and refuse to give an inch. President Obama offered a 5-to-1 ratio between spending cuts and revenue increases to Speaker Boehner. In effect this turned him into a conservative Republican President—a fiscal hawk. He has stepped way outside the framework that those who elected him would have assumed.

    The Tea Party is working to separate the American People from its government. What do they think “We The People…promote the general welfare” means?

    If David Frum has any decency, any fortitude, or any wisdom, he will acknowledge that the President has shown great willingness to work with his political opponents, and that the spoilers in the Tea Party wing of the Republican party must be defeated.

  • Primrose

    So regulars, what do you think has brought out the agitated ones on the site. Last Puritan isn’t even coherent and Matt X, oh Matt X.

  • Bunker555

    Matt X will get a large following on Fixed News’ Political News board. Right at home with his Tea Bagger brethren.

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