Tick, tick. August 2nd is the Debt Limit Armageddon. Or Not.

@High Seas,

High Seas wrote:

Just noticed on my link for Thomas, Krugman, writing on the day before Obama's speech, said exactly the same thing I said to you earlier today:
http://krugman.blogs.nytimes.com/2011/07/24/moodys-blues-poor-standards-and-the-debt/

Quote:
The point is that when S&P or Moody’s speaks, that’s not the voice of “the market”. It’s just some guys with an agenda, and a very poor track record. And we have no idea how much effect their actions will have.

That's a fact - personally I can't figure out why Obama doesn't speak to any economists, of any persuasion, before starting to make prime time speeches.

It's either because he is ignorant and clueless or it because he really wants to destroy our capitalist economy and replace it with a centralized government economy.

Watching on TV:
Boehner's face is Orange like an Oompa-Loompa, but what's up with Obama's face, is he wearing a mask?

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@H2O MAN,

H2O MAN wrote:

..It's either because he is ignorant and clueless or it because he really wants to destroy our capitalist economy and replace it with a centralized government economy.

The last of his entire group of economic advisers to leave, Larry Summers, departed because he never got to talk to Obama; his new "senior economic adviser", Gene Sperling, is in fact a lawyer - which is why he cautiously refused to confirm on TV this a.m. that Obama really would veto the 6-month extension - and just as focused on getting his boss re-elected as the boss is. The 2 of them shamelessly made up "facts" in last night's speech, starting with:

Quote:

First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result....

No credit rating agency, not one, has made as much as a peep along these lines. Have to leave for the Middle East later today - where btw, yet another military fiasco is awaiting us, with Britain now saying it's OK with them if Khaddafy stays in Libya. So much for any shreds of credibility left to Obama - the man is an embarassment; let's hope he causes no other major disaster, economic or military, before election day 2012. Will post again when back.

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Boehner, as usual, came off as a churlish ass last night. Every single thing he said was a lie. It was almost as if he designed it to validate everything Obama had said about him and his team.

I don't think it's a foregone conclusion that Boehner's plan can pass the House. It's being widely panned by his activist base, and he can only afford about 20 defections before the thing will fail. There are somewhere around 50 Republicans who have publicly vowed to vote for NO debt ceiling increase.

Cycloptichorn

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Obama supporters are in a panic once again... Laughing

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@High Seas,

High Seas wrote:

Thomas - do you sometimes get this suspicion that Paul Krugman follows you around online and copies your posts, adding the bits and pieces you left out?!

Thanks! I'll take that as a compliment. But I think we were really just independently following the same approach:

ask what economic policy would bring the most welfare to the greatest number,
find the answer by applying economics-101 textbook models to the data available, and
praise or rebuke politicians depending on how close or far their position is to the answer we found.

But I'm well aware of my place in this picture. It's Krugman who made a Nobel-Prize winning contribution to this process. I'm just applying it.

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@Thomas,

I'm in the same camp as you; we need to have the government spend more on public works projects - not less. That's the only solution to the dismal employment picture we have in this country - as we watch more companies let workers go by the thousands. This is the only sure-fire projection from any austerity program - more layoffs.

It certainly isn't about more tax cuts for the wealthy; they don't need it. They gained 23% just last year, and the divide between the haves and have nots are getting wider every year. That's the only message from the GOP-tea party; tax cuts will create jobs. I guess this works if you're in the top 10% of the employed in this country. You can't bleed a turnip no matter how hard you try.

The stress level for the middle class and poor are increasing at an alarming rate; this will result in worse health and cost to our economy.

The politicians in Washington DC would rather play games than work for the American people. They need to be removed, and I believe that will happen next year when people realize how much this gamesmanship is costing everybody - including themselves. Many will win the politics, but lose in their jobs, homes, and investments.

That's got to matter no matter how anyone wants to spin it.

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@Thomas,

I'm in agreement with you as well - it is distressing to see Obama repeating economic falsehoods.

But - with the current setup of government - is there any possible way that Obama could bring about more stimulative spending?

Cycloptichorn

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@Cycloptichorn,

Cycloptichorn wrote:

But - with the current setup of government - is there any possible way that Obama could bring about more stimulative spending?

There is only one way to find out, and Obama didn't even try it when his party held the House and 60 Senate seats. That's why I hold him partly responsible for what you call "the current setup of government".

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@Cycloptichorn,

There is no way to deal with extremists. That lesson should have been learned long before now.

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@Thomas,

Thomas wrote:

Cycloptichorn wrote:
But - with the current setup of government - is there any possible way that Obama could bring about more stimulative spending?

There is only one way to find out, and Obama didn't even try it when his party held the House and 60 Senate seats. That's why I hold him partly responsible for what you call "the current setup of government".

To be fair, they only had 59 seats in the Senate, and some votes (such as Lieberman and Nelson) were unreliable.

More than Obama, I blame Harry Reid for much of this. He didn't have the stones to change the Filibuster rules at the beginning of the last Congressional session, and that alone has allowed the Republicans to cold kill everything that the House and Obama wanted to do.

Cycloptichorn

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@Cycloptichorn,

That's only half the story; you gotta blame the No Party for destroying what little ability there were for negotiation.

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@cicerone imposter,

From today's Guardian.
If you say something often and loudly enough, it can become an accepted truth. And when the target of your wrath is Barack Obama, it can become a righteous one. The record US public deficit is not, as far too many Republicans claim, the result of government spending on foreign aid, education and food safety. And cutting such discretionary spending will not fill the deficit hole. By far the two most significant drivers of the deficit are the Bush-era tax cuts and the wars in Iraq and Afghanistan, which added $1.8tn and $1.4tn to the debt respectively. Compared to that, the Obama-era stimulus spending, which adds $711bn to the deficit, or his healthcare reforms are small fry. In terms of the deficit, Bush-era policies were nearly five times as damaging as Mr Obama's.

In a very real sense, the final week of the great budget debate, which will bring America to the brink of default if no agreement is reached on raising the debt ceiling by 2 August, is not about economic facts. It is not even about two rival visions of government. In his eagerness to split differences and to triangulate, Mr Obama has already conceded what most of the Republicans want by offering to divide spending cuts and tax rises 83% and 17% respectively. The White House went even further in offering to cut spending by more than the deficit plan proposed by a bipartisan group which included some of the Senate's most conservative members. The latest formula, unveiled yesterday by the Senate majority leader Harry Reid, has no new taxes at all. This alone has caused some to conclude that the Republicans have won, but do not yet realise it. But the argument is not about the formula. It is about stopping an elected president, who has every chance of winning a second term, from functioning. The mere fact that Mr Obama embraces a plan, no matter how far right it leans, is enough to kill it in Republican eyes. The bottom line seems to be that they do not accept his legitimacy as president. He is everything the Republican base and the rightwing talk show hosts hate.

These are dangerous, personal and petty games being played out against a background of wobbling economies on either side of the Atlantic. It is not as if Europeans have the luxury of being disinterested spectators of the US debate. The feelgood factor of the bailout package agreed by the eurozone leaders lasted all of one weekend, before the rating agency Moody's said it was virtually certain that Greece would default. Both the eurozone and the US economies are struggling to overcome the mountain of debt from the housing bubble of the last decade. Unemployment and the crashing need to create jobs and boost tax revenues – modestly addressed by the Obama stimulus plan – has almost disappeared from the debate. But not entirely. While Mr Obama was being dragged into debate with the Tea party right, Mitt Romney, one of the seekers of the Republican nomination, launched a new web video asking: "Where are the jobs?" Mr Obama risks losing sight of the issue that bothers America most.

Americans are enjoying the lowest tax burden in over five decades and they know it. Only one-fifth of those polled want to see a budget deficit deal with spending cuts only, and most favour a deal which would be regarded as a compromise. This is for good reason. The damage created by a US default is real enough – a jump in interest rates, a collapse of the dollar and a return to a global slump. And that is not counting the 70 million cheques for social security, veterans and disabled that go out each month from US federal coffers. These are not only immediate effects of a default but lasting ones. Glorying in the tactical stand of the moment is more important to Republicans than the havoc a default would wreak on the world markets. If this is a sample of the world leadership they intend to offer in government, they are making an excellent case for why they should be considered unelectable.

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@izzythepush,

Almost my very sentiments. They just want our black president to fail at all costs. What other reason is there? None. The GOP-tea party are racial bigots running our country into oblivion, and Americans fail to see it.

We deserve what comes out of this stupidity. After all, we're the ones who voted them into our government.

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@High Seas,

High Seas wrote:

Finally, to Thomas: stimulus only works (i) in a closed economy, (ii) if the money is used for investment, not consumption, (iii) if the government doesn't get the stimulus funds from net new borrowing.

(i) is false. The government can spend its money on whatever it wants to; it doesn't have to spend it on foreign imports. (ii) and (iii) may be true most of the time, when output is limited by the supply side. But as long as America is in a liquidity trap, stimulus works through any kind of spending, be it consumer spending, business investment, or government spending. Granted, in the long rung, it may be better if government funnels stimulus money into infrastructure rather than welfare programs, because better infrastructure will boost productivity after America is out of the liquidity trap. But until that happens, spending is spending, it will help, and that's it. Reincarnate the WPA if you have to.

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@izzythepush,

Amen

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Quote:

By NBC’s Chuck Todd, Mark Murray, Domenico Montanaro,and Brooke Brower

*** Obama and compromise: Nothing better epitomizes the current debt standoff -- as well as the uncertainty of reaching any kind of deal -- than last night’s back-to-back primetime addresses by President Obama and House Speaker John Boehner. The president spoke in the present tense as if the idea of a "grand bargain" was still possible (watch Obama's speech). Boehner spoke in the past tense regarding the "grand bargain" (watch Boehner's speech). Both speeches seemed more about framing the "blame game" not necessarily for "default," but for who lost the big deal. The thrust of Obama’s speech, especially at the end, was about compromise. “We have tried to live by the words that Jefferson once wrote: ‘Every man cannot have his way in all things -- without this mutual disposition, we are disjointed individuals, but not a society,’” Obama said. “History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed. But those are not the Americans we remember. We remember the Americans who put country above self, and set personal grievances aside for the greater good.”

*** Boehner and my way or the highway: But if Obama’s was about compromise, Boehner’s was anything but. He urged the passage of the House legislation he has introduced (which would raise the debt ceiling in two stages). “If the president signs it, the ‘crisis’ atmosphere he has created will simply disappear. The debt limit will be raised. Spending will be cut by more than one trillion dollars, and a serious, bipartisan committee of the Congress will begin the hard but necessary work of dealing with the tough challenges our nation faces.” Our recent NBC/WSJ poll summed up these two divergent views: Large majorities of Democrats and independents said they wanted their leaders to compromise, while a majority of Republicans said they wanted GOP leaders to hold their ground. Thus the current impasse. The president was speaking to those independents last night with talk of fairness, quoting Ronald Reagan (and citing a bipartisan list of presidents) and this line: “The American people may have voted for divided government, but they didn’t vote for a dysfunctional government.” Boehner, though, was speaking to Republicans. It's one of the main differences between this standoff and the Clinton-Gingrich standoff in '95. During the '95 shutdown fight, both parties were trying to win over independents, speaking to the same group of voters. That is NOT the case with this standoff.[/u]

*** Flashback to December: Boehner's known this since he became speaker that he doesn't have a power base in the House that will let him compromise. In fact, this impasse was foreshadowed in Boehner’s “60 Minutes” interview in December:

J. BOEHNER: We have to govern. That's what we were elected to do.
STAHL (on camera): But governing means a -- compromising.
J. BOEHNER: It means working together. It means find...
STAHL: It also means compromising.
J. BOEHNER: It means finding common ground.
STAHL: OK, is that compromising?
J. BOEHNER: I made clear I am not going to compromise on -- on my principles, nor am I going to compromise...
STAHL: What are you saying?
J. BOEHNER: ... the will of the American people.
STAHL: And you're saying I want common ground, but I'm not going to compromise. I don't understand that. I really don't.
J. BOEHNER: When you say the -- when you say the word "compromise"...
STAHL: Yeah?
J. BOEHNER: ... a lot of Americans look up and go, "Uh-oh, they're going to sell me out." And so finding common ground I think makes more sense. More

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@JPB,

Well lets just hope they do find a compromise, sorry common ground.

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@JPB,

Boehner,

Quote:

J. BOEHNER: I made clear I am not going to compromise on -- on my principles, nor am I going to compromise...

Would he have said anything close to this if the president was white?

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@Cycloptichorn,

Obama and his democrats are the party of NO.

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Quote:

NOPE! Top House Conservatives Says Boehner Lacks Sufficient GOP Support To Raise Debt Limit
Brian Beutler | July 26, 2011, 12:25PM

One of the most influential conservatives in Congress says he's confident his own Speaker John Boehner (R-OH) will lack the votes to pass his plan to raise the debt limit in the House of Representatives.

Complicating matters further for Boehner -- the Dems' top vote counter wryly suggested at a simultaneous press briefing that few, if any, Democrats will vote for the GOP's bill, since there is a preferable Democratic plan waiting in the wings. That suggests House conservatives are holding the line against any debt limit increase that can plausibly pass the Senate -- and that Democrats will have added leverage to muscle their own plan through both chambers.

"I am confident as of this morning that there are not 218 Republicans in support of the plan," Rep. Jim Jordan (R-OH) told reporters at a Tuesday morning press briefing.

http://tpmdc.talkingpointsmemo.com/2011/07/nope-top-house-conservatives-says-boehner-lacks-sufficient-gop-support-to-raise-debt-limit.php?ref=fpa

Two-hundred eighteen votes is the usual number required to pass legislation in the House. Because of vacancies, that number is currently 217. That means Boehner can lose no more than 23 Republicans and still pass his plan that would raise the debt limit and set the country up for another default crisis early in 2012.

House Minority Whip Steny Hoyer (D-MD) said "very few" if any Democrats will join Boehner. "I don't want to give a number, but very few."

Asked if Boehner's plan can pass without Democratic help, Hoyer chuckled, "We'll see. I don't know, but we'll see I think. I think we'll see."

If Boehner's bill can't even pass the House, we'll have a major debacle on our hands.

Has a speaker of the house ever been shown to be weaker, than Boehner has been these last few months? He has no control of his caucus whatsoever. Compared to Pelosi, the man is pathetic at his job.

Cycloptichorn

1 Reply

Tick, tick. August 2nd is the Debt Limit Armageddon. Or Not.

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