Posted on 07/07/2011 10:46:23 AM PDT by Chi-townChief
In the March of Folly, historian Barbara W. Tuchman describes how governments throughout history have insisted on making huge mistakes that harmed their own interests even as smarter people warned them not to. The results, of course, were disastrous.
Now, Washington is teetering on the edge of its own march-of-folly moment — intentionally allowing the first U.S. default next month, potentially throwing financial markets into turmoil and leaving soldiers, doctors and Social Security recipients with a bunch of IOUs.
We might yet dodge the bullet. The White House said Wednesday that President Barack Obama is confident that enough lawmakers from both parties support a deal. But it’s also possible we won’t. The many times nations have blundered their way into unnecessary and devastating wars tells us that teetering on the brink of disaster is hardly a good place to be.
The matter at hand is the need to raise the government’s debt limit to avoid defaulting on U.S. obligations to bondholders, Social Security beneficiaries and others. Two weeks ago, Republicans walked out of negotiations, saying they would not consider any type of revenue increase, whether raising taxes or closing a tax loophole — not even a loophole for corporate jets. By doing so, they are putting America’s Triple-A credit rating at risk. They’re playing with fire, and the danger is that all Americans will get burned.
The GOP professes to be concerned about the nation’s budget deficit, but that rings hollow from a party that — while it controlled both houses of Congress, the U.S. Supreme Court and the presidency — cut taxes and then borrowed money to wage two wars and create an unfunded prescription drug benefit for seniors. That turned an inherited budget surplus into a massive deficit.
Congressional Republicans have boxed themselves in by signing a no-tax-hike pledge drawn up by Americans for Tax Reform, a group headed by Grover Norquist, who has long worked to “starve the beast,” i.e., create such a huge budget deficit that alarmed Americans will accept the scuttling of cherished programs such as Medicare and Social Security. But why should Norquist’s budgetary fanaticism take precedence over what’s best for the country?
These are by no means the best times for desperate budget-cutting, nor are taxes out of control. The nation’s overall tax burden is 14.8 percent of the economy, the lowest percentage since 1950, and average tax rates are the lowest in decades.
Since the sales job of the infamous Laffer curve and supply-side economics in the 1980s, many Republicans have insisted that cutting taxes always and inevitably leads to prosperity. But the historic record puts the lie to that. When President Bill Clinton — without a single Republican vote — raised taxes to reduce the deficit in 1993, the economy boomed and eventually produced a surplus. After President George W. Bush’s skewed-toward-the-wealthy tax cuts in 2001 and 2003, mega-deficits returned.
The suggestion has been raised that the 14th Amendment, which says U.S. debts “shall not be questioned,” allows Obama to raise the debt limit on his own. But that would just move the debate to the Supreme Court.
Even if the debt ceiling stand-off is resolved, the opportunity for another stalemate and potential government shutdown looms after the federal fiscal year ends on Sept. 30 if the political parties can’t get back to governing.
Washington’s priority should be creating jobs and revving up the economy — and backing away from an abyss.
That’s the liberal economic manifesto in a nutshell.
I’ve noticed that “lowest taxes since 1950” talking point being confidently tossed out by all the usual suspects and I wonder where that comes from.
Apparently the Reagan Boom never happened. All we have to do is Come Home, America, tax those dirty little top-hatted Monopoly men and our problems will be solved.
We seem to do a lot better with a GOP congress regardless of whom the president is, even a fool like Ol’ Slick.
These impassioned entreaties are giving off the stench of liberal flop-sweat. If the GOP actually stands up to Obama on this The One will collapse like a punctured balloon.
I wonder if he really will try to ignore the Constitution and try to rule by decree. That would make him America’s Salvador Allende for real.
Allende remains a big hero among the American pigressives.
Liberal idiots with poor grasp of logic.
“Republicans would not consider any type of revenue increase, whether raising taxes or closing a tax loophole.”
Right, so Democrats who insist on putting tax increases into the debt ceiling are the ones responsible for the failure of the debt ceiling, since the Democrats wont compromise.
Why do the Democrats want to risk all these horrible things happening over a stubborn insistence on tying tax increases to the debt ceiling? Its a political game to them, to get Republicans to pass Democrat agenda items and threaten to crash the system if the Republicans dont go along with it.
” By doing so, they are putting America’s Triple-A credit rating at risk. They’re playing with fire, and the danger is that all Americans will get burned.”
These liberals are pointing fingers in the wrong direction. Point it at the Democrats.
Indeed.
What a crock. Not raising the debt ceiling has nothing to do with defaulting. Unless one beleives we are servicing our debt by borrowing more money. Let’s say Joe Sixpack sits down at the kitchen table with his domestic partner Sally Homemaker. Joe says, “We owe too much lets stop borrowing and pay off these credit cards.” Does Sally, yell “We can’t default Joe, we need to keep borrowing more”? I think not. THus Sally and Joe are smarter than Barry and Tim.
You can see from the D talking points over the last week that they are attempting to confuse people over the meaning of “default”. The only “default” that actually matters is defaulting on payments to creditors. The D’s and their helpers in the media are now trying to conflate this with eliminating spending previously approved. In fact, this latter kind of change in spending, bogusly referred to as a “default”, would be a positive for the US in the credit and currency markets.
In effect, refusing to raise the credit limit just imposes something close to a balanced budget and would result in the elimination of unconstitutional government bureaus and departments.
So they are admitting that S/S is paid from borrowed money?
So much for that “lock box” promised by the fowl demoncraps.
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