To be honest, this entire negotiation has simultaneously increased my respect for Boehner and decreased my faith in… well, America. Obama wanted a clean increase and was sort of blindsided by Republicans using it as a bargaining chip. But that was totally fine, in the grand scheme of things–parties have to use the tools at their disposal to try and promote their stated priorities. (Obama should have rejected this for awhile instead of acceding to it immediately–I think it might make the negotiations easier–but that’s just a negotiation tactic, not a point of principle.) Then what should have happened is that they gradually circle down to some set of policies to reduce the long-term deficit and stabilize our debt level. Give and take on the exact composition of it.
And Bohner during the negotiations has struck me as someone acting in good faith, with he and Obama playing the parts of the adults in the room. But intra-caucus political dynamics have pretty much ruined any chance of him getting a heavily spending-cut tilted Grand Bargain that’d cement his place in the history books as the Tip O’Neill to Obama’s Reagan. Unfortunately, Eric Cantor has designs on Bohner’s leadership position. Which may well have been good from a Republican perspective. With Obama knowing Bohner can’t give too much away or else Cantor will swoop in and stab him in the back, it forces Obama to give up concessions until the point he’d similarly be screwed.
What has ended up happening, though, is that Bohner has refused to make any public concessions because of the Cantor threat, which means that a portion of the Republican base having veto power over any deal hasn’t become used to the idea of even small concessions. No signals have reached them saying they can’t restructure the universe according to the results of a single election.
So we’re left with a situation where everyone responsible has roughly the same idea of the package that negotiations say should go through (at least 2 and up to 3.5 trillion dollars in mostly cuts to entitlement programs and some negotiable tax increases and reforms). But the people who ostensibly want this deal aren’t willing to vote for it.
I think it’s still possible to escape from this, but I worry Congressional Democrats–particularly Pelosi–are sick of being shit on and think it should be their turn to act like insane monomaniacs to extort as many concessions as they can (which is undoubtedly how most of them see things).
Honestly our credit rating should be downgraded, just because our political institutions are much closer to a Third World banana republic than any self-respecting developed country.
I’m thinking of examples like Indiana steelworkers. They used to be unionized; people could raise their families working in that industry. Now most of them get minimum wage, and some forces would like to do away with minimum wage rules so that they may be paid even less. People in ownership or management positions are paid far, far more than the people who actually produce the steel. I don’t know if the white-collar guys are definitively worth less than the producers, but as one group is in a position to define the pay of the other group by shuffling some paperwork, guess which group gets the short end?
Wisconsin is another great example. The Koch brothers basically inherited a money-generating machine. They didn’t build it- it got passed down to them, other people do practically everything it takes to make it go yet they reap 100x or more the pay of anyone else in the organization. So what do they do? They capture the organs of government to destroy teachers’ unions to reduce the pay of more worthwhile members of society so that corporate taxes can be cut. That isn’t productive labor, but merely corruption.
Does that clarify my point? I don’t mean it to be applied to every single example of income inequality. And I’m not motivated by bitterness over my own situation- I actually make enough to be satisfied. I feel sorry for people who are part of billion-dollar organizations who make orders of magnitude less than others who seem to do little but shuffle papers around and dream up ways to cut pay and benefits. It seems like the pubbies would do anything to create a system where no one has any choice but to work for minimum wage, or less. It’d be tyranny, but they’d claim it was the free market (“minimum wage is all any job pays due to market forces! Nevermind that we own every single company and your choices are minimum wage or starve”)
That’s so cute. It pretends that those with more power to rig the rules to benefit themselves never exercise that power. Unfortunately the facts are once again against you, though.
Still going with that monolithic hive mind strawman stuff, huh? That’s not so cute.
Would you say that’s true of, say, Romney? What value has he created for anyone but himself and his investors?
With it we got the world of Dickens. Can you really not see why that isn’t the bigger peril?
What I find extraodinary here is that I find (outside USA, well also inside USA) universal among conservative / non-Left commentators who have a proper business education horrified condemnation of this person… and here is a defence.
No wonder you all are driving your way down the route to being a big Argentina. May God save us all.
Yes, in fact your expression of a hope of a downgrade is the very picture of that problem. The very picture. No proper fiscal conservative would ever write such a thing. Well, 200 yr experiment, perhaps proves out in the end.
I failed in getting across my point, which is that Boehner wants to raise the debt limit and in normal political dynamics he and Obama would have come to some understanding. Various malefactors,however, are threatening to destroy the United States’ credit for the sake of ideological purity. This is a bad thing, and they are bad people.
I do not hope for a downgrade. My ideal solution would be either a clean debt limit increase or one more heavily tilted toward tax increases than the one on the table. And a carbon tax. And a pony. I’d be more than willing to pass even the heavily spending-focused deficit plan, however, for the sake of increasing the debt limit.
That’s where the leadership part comes in. Boehner took this office promising that his party would have an “adult conversation” about the budget and the deficit. He hasn’t held one yet, by all appearances, has he?
And they’re *not *bad people, just misguided and irresponsible.
Yes, he’s failed in leadership. He’s failed to lead that faction of his party to take part in genuine negotations. But I’m not sure how much you can hold that against him. Could anyone have?
No one hopes for a downgrade - it’ll cost the U.S. a fortune in additional debt servicing costs, for one thing.
But what makes you think a debt ceiling increase will avoid a downgrade? it seems to me that what matters is what kind of deal is struck. If Obama gets what he wants, which is basically a political accommodation to push the problem past the next election cycle with no major structural changes to the government, then I think a downgrade is very likely anyway. Two years from now the debt ceiling crisis will be back, only next time the debt will be worse and taxes higher as a result of the deal Obama wants.
In terms of calamity potential, I’d rate it like this:
No deal is reached.
Obama gets his way.
Boehner gets his way.
But even the Republican’s plan isn’t enough. So frankly, I think the U.S. is headed for a downgrade anyway, and that’s going to mean higher interest rates, a double-dip recession, and debt servicing costs that will jump at least 150 billion dollars per year, making the deficit worse and the necessary corrections even larger. So if they can’t get a reasonable deal passed now that puts the U.S. on a better fiscal trajectory, I’d put my money on eventual default, which means I wouldn’t put it in America.
Well, according to Boehner he was ready to deal yesterday morning, and at the last minute Obama changed the deal and threw in 400 billion more in tax increases which poisoned the well and caused Boehner to believe that Obama isn’t dealing in good faith.
If that’s true, then it may well be Obama that wants a default, because that allows him to transfer blame for a bad economy from his own actions to the Republicans.
Umm, I’m a Democrat, I don’t like the idea of giving ANYONE the power to dissolve the house no matter who is in the majority. The fact that the Republican party has been commandeered by the reincarnation of the John Birch Society doesn’t mean that there aren’t enough “country before party” Republicans left to form a coalition with the Democrats.
If we need a last minute solution, then what we can get is a clean increase in the debt ceiling without any of the spending cuts the Republicans are insisting on.
Unnecessary wars. Tax dollars go directly into the pockets of favored contractors.
De-regulation. The system tanks, and to prevent a total catastrophe taxpayers are on the hook for hundreds of billions of dollars. The people who caused the problem get million dollar bonuses.
If the US credit rating gets torpedoed, then that. Interest rates spike. The corporations sitting on that $2 trillion, along with anyone else who has a mountain of money, invest in bonds with artificially inflated rates for a nice sure-thing investment. They’ll know damn well that the US is good for the money. Taxpayers will be on the hook for all that interest.
Let’s not frame my points as radical anti-capitalism, ok? Yes, I would probably want to see more limits to raw unfettered capitalism than you (monopolies are bad for instance. Poor people ought to be able to visit doctors. Old people ought to be able to pay rent), but I’m by no means a Marxist.
As for screwing with the system at my peril, um… it is the House Republicans who are screwing with the system, to the world’s peril.