Cross-posted from Credit Writedowns
President Obama is not the only debt ceiling flip-flopper. During the Bush administration, when a budget surplus tuned to deficit and debt piled up, Republican leaders in Congress voted to raise the debt ceiling 5 times, increasing the limit nearly $4 trillion. We’re talking about Speaker John Boehner, House Majority Leader Eric Cantor, Senate Minority Leader Mitch McConnell and Senate Minority Whip Jon Kyl. Combined, they voted 19 times for a debt ceiling increase without complaint or conditions.
June 2002: Congress approves a $450 billion increase, raising the debt limit to $6.4 trillion. McConnell, Boehner, and Cantor vote “yea”, Kyl votes “nay.”
May 2003: Congress approves a $900 billion increase, raising the debt limit to $7.384 trillion. All four approve.
November 2004: Congress approves an $800 billion increase, raising the debt limit to $8.1 trillion. All four approve.
March 2006: Congress approves a $781 billion increase, raising the debt limit to $8.965 trillion. All four approve.
September 2007: Congress approves an $850 billion increase, raising the debt limit to $9.815 trillion. All four approve.
So, what happened? Republicans went from being the party aligned with the President to being the opposition party attacking the President. That’s how politics works.
Republicans will show extreme opposition to any stimulus, any bailouts and may look to rescind the healthcare bill already passed by whatever means necessary. Likely, stimulus is out for good now. The Obama Administration clearly understands it made a tactical error in predicting a more robust economic outcome while bailing out the financial sector. This has left it in a bind because they are trying to argue that the stimulus prevented depression when (the U-6 measure of)underemployment is still 17%. I anticipate the Obama people will change tack because the Republicans will beat them over this. It is not clear yet what they will do in order to demonstrate their ‘for and by the people’ stature. However, I have speculated that the Administration will become even more conciliatory toward the financial sector (which feels aggrieved because of populist rhetoric) in order to deflect Republican criticism about being anti-business and to protect their previous policy decisions.
–Less Policy Advocacy and More Policy Forecasting at Credit Writedowns, Oct 2010
Even if the debt ceiling showdown ends without default, there will be more shutdown attempts when the federal budget comes up for review in the fall. Get ready for more gridlock – and a US sovereign debt ratings downgrade.
P.S. – See also:
A few comments about Tuesday’s election’s impact on the economy
P.P.S – The democratic party meltdown of 2010 was entirely predictable as early as January 2010. That tells me that Obama blew it. I see Barack Obama as Herbert Hoover. I said quite clearly when Obama entered office in January 2009 that Krugman was right. “Obama has one shot. From a political standpoint, he should be opting for massive stimulus and look for that to be cut back to a more palatable level in negotiation. However, he seems to be treading a cautious line, looking for bipartisan support that he may not receive”. He better hope the Republicans get the blame for the debt ceiling meltdown.
The threat is not default, the threat is social security and medicare and whatnot-cuts to ‘prevent’ “default”.
The fact that they were in favor of raising the debt ceiling before is not hypocrisy, it’s a very conscious political move: they had to run up the debt in order to create this ‘problem’. This is something Reagan did before them, and the twin purposes are 1. to throw money at the private sector, and 2. to create a political climate in which spending cuts on social security and the like seem inevitable and “wise”.
I disagree. Starve the beast doesn’t work. Some ideologues might hold onto this dream, but then those politicians wouldn’t have voted for the prescription drug package then. The Republicans are not committed to deficit reduction at all. The reason the Republicans flip-flopped is simply because of politics.
They aren’t starving the beast, they’re bloating him so much that they hope he’ll explode, to create a political climate in which starving the beast seems rational and prudent. Run up deficit spending (declaring random wars) while cutting taxes (Reagan from 70% to 35ish%, Bush from 35-25% and 15% for cap gains), and then start talking about how “government is out of control” etc.
(Remember Reagan’s arms race (Star Wars, etc.) with the Soviet Union, which was pretty much entirely debt-financed, and fantastic for companies like Lockheed-Martin.)
I should also point out that Ronald Reagan raised taxes A LOT. He did not try to starve the beast:
You write “If you recall, Ronald Reagan cut taxes massively during the double dip recession of 1980-82 in order to spur on the economy. This had the effect of increasing aggregate demand, so much so in fact that we had extreme financial excess by the mid-to-late 1980s.”
I am not so convinced, however, that these two things are related in the direct manner you suggest.
Look, for instance, at the $800B “stimulus” package by Obama: First off, cutting taxes is a horribly regressive way to stimulate spending, as it doesn’t do anything for the buying power of most of the population (which is where AD comes from). Secondly, even if it does, it mostly leads to consumption of more goods, which are largely made in China — meaning it doesn’t do anything for sustainable job creation inside the US.
I am not conversant enough in US economic history of the late ’80s to guess what you are referring to when you mention the financial excess, but from what I remember a lot of it is related to the S&L crisis. But that’s a crisis caused by excessive lending+borrowing, which is not generally something people who have lots of money available for discretionary spending engage in.
Anyway, I would appreciate it if you could specify “a lot”. Like I said, he lowered the top marginal rate from (off the top of my head) 70 to 35%, so I’m curious in what area he did raise taxes, and if that raise was in any way proportional to this cut.
Tax policy without fiscal policy is worse than useless.
(Apologies for the sloppy editing.)
Anyway, it seems to me that the fact that there was financial excess in the private sector because of the S&L crisis is mostly unrelated to the question whether or not Reagan lowered (or raised) taxes. But calling Star Wars, and top marginal tax rate cuts stimulus program is highly misleading, as they respectively subsidized highly capital-intensive labor, and people who save the majority of their income anyway. And even when members of this group spends money, they spend it on more highly capital-intensive goods than ‘normal’ people would, which means it leads to less job creation than it could have.
One tax hike I can think of, for some reason, is the 1984 social security hike so SS would be around for boomers. But never mind. There was the big “read my lips – no new taxes” medicare payroll deduction, but that was Bush the First in the early 90s.
Reagan did the thing where he cut off revenue sharing with the states, then state sales taxes started their march from 4% to the oftentimes 9%+ that we enjoy nowadays.
There was a lot more manufacturing in the US back in the early eighties so a lot of the consumer items purchased then were made here and not in China meaning the profits stayed here as well. These days are quite different, even large pieces of furniture are made in China & sold here. Just for grins, almost everything in a Costco warehouse except for food items is Chinese-made and yes, even some of the food items like garlic powder come from China…
Except that China makes the china in Viet Nam now.
We can thnk Paul Volcker’s policies for loss of our manufacturing base. The high interest rates made the dollar stringer, which made the price of American products higher for people in other countries, which gave a big advantage to the Japanese and Germans (which they are trying desperately to hold on to today). The old companies in the rust belt just couldn’t cut costs enough to make up for the strong dollar. Then Robert Rubin adopted that as a specific policy without recognizing the side effects.
Starting with Reagan the Republicans turned more extreme, less responsible and highly destructive. I cannot decide whether the Republicans represent suicide bomber because they oppose Obama or because Obama’s push over and valueless ways provided them with the trigger.
There is no doubt that the Republican still dream of the pre-New Deal days. But without the collapse of the Democrats under the misguided leadership of Obama, they would have a chance. Now they do!
I cannot decide whether the Republicans represent suicide bomber because they oppose Obama or because Obama’s push over and valueless ways provided them with the trigger.
Suicide bomber approach. it wasn’t just Obama, it was also Clinton.
Top Republicans were vowing to fight Obama tooth and nail even before he was sworn in. there are countless quotes where they discuss their tactic to not allow him to do anything and to fight him on everything.
the tactic works, and the Dems are and will copy it.
I should amend:
the tactic works for the top dogs in each party and their benefactors.
it is destructive to America.
The “pre-New Deal days” have passed from from living adult memory.
The childhood memories of people now in their 90s seems a ridiculous basis for economic policy.
History also notes that the policies of a divided and distracted Government often resemble policies designed to harm the interests of that nation, but that such is only a matter of appearances – the harm is real enough, but it was not intended by those who advocated that policy..
As a wise American once observed: ” A house divided against itself cannot stand.” That the division is the result of strongly held – but contrary – impulses to do “what is best for the country” makes no difference to that outcome, imho, as to its baleful effects on the populace..
I hope the US Government does lose its credit rating. It has no need to and should not borrow money in the first place. It should just spend and tax its own fiat. And as the only source of money into the economy the Federal Government should run a perpetual “deficit” too though it should be called something else.
According to the MMT folks, the purpose of Federal Government borrowing is to drain reserves out of the banking system to manage the Federal Funds Rate. But it is absurd that the Federal Government be concerned with the private banking system other than to punish fraud and insolvency.
Who needs banks? The government certainly doesn’t. And as for the private sector, why should the so-called “credit worthy” be allowed to steal purchasing power from their neighbours including and especially the poor?
Let the banks run their own banking system if they can with absolutely no help from government. We would then find that successful private money creators would have to share wealth rather than loot it.
“Filthy lucre” indeed. But it doesn’t have to be that way if we have separate government and private money supplies as suggested by Matthew 22:16-22 (“Render to Caesar …”).
And of course the Republicans are hypocrites. I would say that is their defining characteristic.
I agree that there’s plenty of hypocrisy involved in democratic political systems. Men or women of priciple are always hard to find and almost always absent from the list of those seeking office.
What I don’t understand is why ordinary bloggers and ordinary people become defenders of particular parties. Why anyone would try to interpret the behavior of political parties over time in pricipled consistent terms is beyond me. Parties are made up of people and those people don’t understand or care about real problems and real solutions. They are posers. One side is “caring”, with other people’s money and almost wholly ignorant of the long-term impact of what they want to do, while the other pretends to be “responsible”. Anyone who falls into defending them on these proposterous poses is a fool.
We are not too far from Milo and Clodius.
I’m not exactly sure how I can make the same spelling mistake twice and claim it as a typo!
Author fails to convince in argument ascribing the present Republican opposition to increased debt limits solely to partisan politics. This over-simplification is astounding. Such thought deserves a place of merit within the confines of Huff-Po or Daily Kos.
The debt limit is a silly contrivance in the first place, since it allows service of debt already incurred (i.e. it doesn’t represent new spending, only paying bills for money already spent).
It has NEVER been a political issue before, and virtually every member of Congress who is not a freshman has already voted for it at least once.
John Boehner and Mitch McConnell both voted for two unfunded wars and an unfunded expansion of Medicare and now when it comes time to pay for it, they’re making a principled stand for fiscal responsibility?
If you can’t see the hypocrisy framed in this post, then you might be a …
Recall that the Republicans didn’t object at all to raising the debt ceiling throughout the Bush years. This is because back then the debt ceiling needed to be raised in order to pay for our bogus war on Islamic terrorism and bail out the financial terrorists on Wall Street. But unfortunately we are now in a situation where our elected officials on both sides on the aisle are too beholden the war profiteers at the Pentagon and the sociopathic bankers on Wall Street to ever put them on the chopping block.
This leaves our elected officials no other choice but to put Social Security on the chopping block, despite the fact that unlike the our military and our banking system, Social Security pays for itself! This is what happens when you have a debt-based economy like ours — you reward your debtors and you punish your savers. Like all debt-based economies, we steal from our savers and hand out the loot to our debtors.
And because we have a pro-war, pro-Wall Street corporatist pig in the White House, it’s pretty much a given that he’ll go along with the Republican plan to first make sizable cuts to Social Security before raising the debt ceiling. The goal of all pro-war, pro-Wall Street corporatist pigs, including our warmongering Nobel Peace Prize winner of a president, Barack Obama, is to starve Social Security in order fatten up the debt-making machines at the Pentagon and on Wall Street. And once Social Security is on its deathbed dying of starvation, Wall Street bankers will step in and claim that they can save Social Security by privatizing it, which is just another way of saying that they’ll make Social Security just another cog in their debt-making machine.
Wow, Cynthia, you said it. This charade is infuriating. The tragicomic GOP cartoon characters are giving Br’er Obama all the briar patch cover he needs to do his Snidely Whiplash deeds.
But worse, men and women of good will still don’t seem to percieve the web they weave. Alas, even Ed Harrison:
“The Obama Administration clearly understands it made a tactical error in predicting a more robust economic outcome while bailing out the financial sector.” A tactical ‘error’, really, Ed?
And, “I have speculated that the Administration will become even more conciliatory toward the financial sector (which feels aggrieved because of populist rhetoric) in order to deflect Republican criticism about being anti-business and to protect their previous policy decisions.”
Or, “The democratic party meltdown of 2010 was entirely predictable as early as January 2010. That tells me that Obama blew it.”
Please, Ed, we love you, but Obama didn’t blow anything! It doesn’t take a tin-foil hat or unique color-blindness to see that this has been a critical part of the scheme all along. After all this time, how can people continue to believe that Obama is merely a useful idiot, a well-meaning fool, or a bad negotiator? How far can he deliberately double-down on Neocon policies, an unbroken record now for over two years, before the professional left denounces him as an obvious plant, a Trojan horse?
Thankfully, in today’s links, Yves writes:
“‘In debt talks, Obama offers Social Security cuts Washington Post’. I want him out of office now. He is managing to make Bush look less awful by the day.”
Amen and amen.
Well, we can’t know this kind of thing with certainty, but the accumulating evidence is in favor of your position (unfortunately).
I think you misunderstand me here. Obama is a center-right politician by mid-1980s standards. He fervently believes the things he says despite the internal contradictions. In fact, the tactical error he has made is for exactly those reasons. He failed to understand that his policies would consign him to a Hoover-like Presidential epitaph and one term as President.
“But, Obama is yet another centrist, triangulating New Democrat in the Bill Clinton mold. Don’t be bamboozled by Republican propagandists telling you Obama is running left or that he is a ‘socialist.’ This is nonsense – kabuki theater, if you will. They are merely using Obama’s weakness to gain control of the historical political narrative. In reality, Leftists are absolutely outraged at his legislative agenda.
Obama is a corporatist like other New Democrats of the neo-liberal mold. The schtick – as also used by Schroeder in Germany, Koizumi in Japan and Tony Blair in the UK – is to say the things that progressives want to hear, but do the things that big business wants to be done. You have to give a sop to the base here and there like exempting unions from the healthcare bill’s Cadillac policy tax. But, the goal is to curry favor with big business, which is the paymaster of both established parties in the U.S.”
Thanks for clarifying, Edward, but I still think you give Obama too much credit. At this stage in the Obama debacle, I tend to project pent frustration onto any journalist (as I would family) who appears to rationalize what is now glaring — that Obama is much worse than a typical triangulating, prevaricating, “centrist” politician; worse than the self-indulgent, self-serving, full-of-himself Slick Willie; and even lower than his warmongering idol, Ronnie. IMO, he’s the anti-messiah on a par with the Great Deceiver Himself, who has probably already reserved a special circle in hell for him.
Worse than Hoover, Reagan or Bush, who at least had some claim to ignorance, senility, and diminished capacity, Obama is a historic tragedy who took a centennial, no, millennial opportunity for transformative reform—the manifest failure of crony, rigged-market cannibalism and run-amok, violent imperialism — pissed it away and took a smelly dump on it. With a crisis of such clear origins and historic precedent, his now endless two-year litany of broken pledges and promises leaves little rational doubt of conscious guilt and malice in sodomizing the American middle class and the Middle East and concentrating power in a ‘savvy’, brutal elite. He’s a poison ivy-league conniver who misused prodigious talent to commit crimes of the heart and finally escalated those into unpardonable crimes against humanity. In brilliant disguise as plantation waterboy, he’s really just another fork-tongued white man after all.
>> How far can he deliberately double-down on Neocon policies, an unbroken record now for over two years, before the professional left denounces him as an obvious plant, a Trojan horse? <<
What professional left? There is no difference between republicans and democrats — they both cater to banks, defense, big oil, big coal, and large corporations in general simply because that's where their campaign funds come from. All the posturing on MSNBC, FOX, and the likes is just part of the circuses.
The liberal class is dead and we may as well accept it. If you want to do the country a favor, next time vote for Green Party or similar candidates.
Politicians are hypocritical flip-floppers! Stop the presses!
The reason the debt ceiling has not been such a political issue before is that the enormous size of the increase being asked for, and the poor results of the $3.8 trillion borrowed since Obama’s inauguration, are new factors in the equation. Not to mention the lack of any credible plan offered by the Democratic leaders in the legislature or the White House to get the problem under control.
These factors invite opposition, and thank God for that. Also, the rise of the Tea Party virtually guarantees that the Republicans have to make a lot of noise about new debt. They must pay homage — and offer tangible results — to the group that won them such a stunning electoral ass-whipping of the other party.
And in the case of the Tea Party freshmen, it is certainly not hypocrisy for them to oppose a massive addition to the federal debt. It would be hypocrisy for them NOT to vigorously oppose it.
LOL. The “group” that won them such a stunning electoral victory wasn’t a group at all—it was the unemployment rate. Which itself was mostly a product of bankster appeasing policies going all the way back to Ronnie Reagan.
And the notion that the Tea Party is interested in getting the debt under control is bizarre, given that the Tea Party doesn’t have a coherent economic ideology. It’s only purpose is to get middle class right wingers to think their interests are actually aligned with those of Koch et al.
Most reputable economists would agree that the worst time to make cuts to the federal budget is when the economy is stuck in a hole as this will cause the economy to get stuck in an even bigger hole. So Clinton was wise to make cuts when the economy was out of the hole. But as Robert Reich has argued, Clinton did get a little too scissor happy doing this, thus depriving our public infrastructure of much needed upgrades and repairs.
But Bush made matters worse by undoing whatever cuts Clinton made to the budget by building up the military to the point where it’s now the economic equivalent of a tapeworm which only consumes its host without producing anything in return for it, except death and destruction, of course. It would’ve been a lot easier for us to come out of this so-called great recession had Bush undid Clinton’s budget cuts by making upgrades and repairing to our public infrastructure, such as our roads, rails, schools, and bridges.
It’s a good point, one that the blogosphere, as our collective memory, is essentially made to make.
But as I say in virtually all my comments, it needs to be looked at through the lens of kleptocracy. The construction of the kleptocratic system that now dominates us began 35 years ago under Carter and has always been a bipartisan affair. Carter repealed the anti-usury laws and began the deregulation of industry that substantially weakened unions. He championed Volcker’s anti-inflation policies at the Fed. These went much further than addressing the then high inflation. They marked the point where wages went flat and stayed flat because the Fed saw any wage gains as inherently inflationary and moved aggressively against them. This also marked the moment when we started moving away from a wage based society to an investor dominated one.
Conflicts between the parties are atmospherics for the rubes. Look at the political history. Reagan went much further than Carter in the areas of tax cuts, anti-unionism, and greatly increased national debt. His was the first big experiment in “trickle down economics”. And he did it with a Democratic-controlled House for all 8 years of his Presidency and a Democratic-controlled Senate for the first 6 years.
It is always about the looting. As Cynthia notes, the current debt ceiling debate is a manufactured crisis whose purpose is to justify cuts to Social Security and Medicare. We in the rubiat are treated to the spectacle of a kabuki showdown whose only goal is to loot us. Republicans suddenly forget their previous votes to raise the debt ceiling and oppose doing so on “principle”. Democrats equally amnesic prepare to cave to the Republicans and cut Social Security and Medicare, their core commitments, for the “good of the country.”
Class war is all about covering massive thefts of the rich and powerful by distracting us. What we are seeing is a classic example of it.
“” We in the rubiat are treated to the spectacle of a kabuki showdown”” nicely put
Oops got moderated. My apologies for adding something actionable to the topic. I will fall back in line and write eloquent prose and quotes complaining about our current situation.
I don’t actively moderate. WordPress does. Certain words get you put in moderation. And there’s no comment in the queue from you. Once in a while, comments don’t go through. It happens to me sometimes too.
Just as Osama bin Laden could not have hoped that any Baluchistanian candidate he managed to insert into the US presidency could have played into his hands better than George W. Bush did, Barack Obama has turned out to be the Republicanistan’s patsy in the presidency.
Per Middle Seamen:
Not only do they have a chance, but 2012 is on track to be an even worse bloodbath for the Democrats than was 2010, especially in down-ticket federal, as well as state and local races. Amidst this carnage, however, Obama himself is more likely than not to be reelected because he and his machine are very good at campaigning, because he’ll have a lot of money, and because the eventual Republican candidate, if not bat shit crazy him or herself, will have to publicly kowtow to that wing of the party to a sufficient extent that to provide a wealth of fear-mongering campaign fodder. But the millions of marginally politically active folks who turned out for the 2008 caucuses and primaries, and later volunteered for the campaigns, won’t be there. Even many party regulars are so disgusted that their campaign work will be half-hearted at best. This means that they’ll show up less to boost the down-ticket candidates.
Furthermore, the president’s persistent caving and adoption of Republican memes has put those candidates in a no-win, downward spiral situation by. GOP words and actions have provided a wealth of issue fodder for them, but those on which the president has caved can’t be used by them without risk of being perceived as attacking party unity. Sadly, however, they’re also the issues that could motivate the base and the left-leaning independents to get off their duffs.
I don’t see this changing unless there is a credible challenge from the progressive left to Barrack Obama’s renomination. It has to come soon, and it has to come from someone with charisma, moral authority, who is not a captive of the beltway establishment, the likelihood of having the chops to do the job (both as candidate and president) and the forthrightness to call bullshit bullshit, not bovine egesta. Names that come to mind are Elizabeth Warren, Alan Grayson, Dennis Kucinich, and even Eliot Spitzer. None of them jumps out as a hands-down choice, although the list above rates them in order from my point of view. Whoever it is has got to come forward soon.
Good article, although to be fair Youtube is littered with Dems like Obama and Harry Reid in front of the legislature categorically denigrating the idea of raising the debt ceiling as late as 2006. Bloated spending is clearly a bipartisan affair.
The only defense Republicans have is that the population gave them a wake-up call.
After the horribly failed stimulus, we must ask Dems what their excuse is. For surely in the last 50 years no mere promise (as was made in the Reagan era) to cut spending has ever worked.
In 1968, Eugene McCarthy challenged a sitting President, Lyndon Johnson, who was both personally and politically consumed by the Vietnam War and started the ball rolling toward the slow end of that War. Sen. Humphrey would have won except for the shenanigans that Richard Nixon created with the help of Henry Kissinger at the Paris peace conference. We need a honorable man, with a solid trail of fighting for justice at home and peace abroad, and not a black Manchurian Candidate with no record to his name and large Wall Street account to bank on. I have gotten to despise this man so much, that I don’t want to even hear his name. I don’t know about Senator Jeff Merkle of Oregon, but I think from what little I know that he might be one to look at, or perhaps one of the Udall cousins. Oh yes, I voted for Ralph Nader in 2008.
Merkle? Outside of Oregon, I doubt many have heard of him. He’s a first term senator and while he has shown some real moxy on banking and monetary issues, he simply needs a little more name recognition before taking on the big dog. I am hopeful that the big dog will face a primary opponent as well as a third party candidate well to his left. A choice between the Big O and any of the Republicans is no choice at all for those of us in the ultraviolet range of the political spectrum.
These are politicians NOT academics. Why does anyone expect them to be fair and reasonable? Politicians are reasonable when it suits their ends, so it happens on occasion… but one shouldn’t expect it. Politics is a form of warfare, people need to get real about this. It’s all about end goals, strategies, tactics, and maneuvering… also being a big shot in the big city and living the high life. Pro-wrestling is another good analogy for politics today… kabuki theater and the folks behind the scenes with the big bucks ultimately directing the show.
These are not people earnestly seeking to make the world a better place. These are POLITICIANS and both parties are hypocrits on various issues. The Dems were mostly anti-war until they got into power, and now they just LOVE playing imperial war games. And so it goes…
There is a feedback loop of wealth and power consolidating into fewer and fewer hands, but I think that in the grand scale, this is actually a good thing, especially since it is speeding up exponentially. It is precipitating its own self destruction in ways which a slower process would have been more stable, but more destructive to both the environment and cultural knowledge of the egalitarian society to which most aspire.
One of the ways the current system is being abused is piling up public debt which will be used as an excuse to sell off public properties. While it is just getting started, I suspect this will be a major factor in coming years.
The question is how to throw a monkey wrench into the process. Some years ago, the idea of the “line item veto” gained a great deal of public attention and was even promoted by the first Bush administration. While it is manifestly destabilizing to the balance of power between the executive and legislative branches, since it would reduce legislative authority to simply setting the parameters of spending and allowing the executive all power of decision making within those parameters, there is another way to design it that would retain balance and be simple enough to get Tea Party type approval.
Take the spending bills, break them into their various “line items” and have every legislator assign a percentage value to each one. Then reassemble the bill in order of preference and have the president draw the line at what would be spent. This would divide authority, with the legislature setting priorities and the president determining overall spending. This is actual “budgeting,” not the “feeding the hog” system we have now.
The percentage voting would allow legislators to equitably balance competing interests in ways which a simply yes/no vote does not and there would be limited pressure to overspend, since the items on the line would have a smaller constituency than those asked to fund them.
As an idea, this might well appeal to a broad enough number of people that it would go viral, without the need for the mainstream media to push it, since those controlling that media would likely recognize it would be inimical to their interests, as not only would it control the public spending that will allow them to eventually buy up public properties, but it would reduce the ability to save enormous amounts of surplus wealth by loaning it to the public sector and force society to recognize notational wealth as the contract it is, not the commodity we assume it to be. This might then facilitate the development of a locally based public banking system, which would invest wealth back into local communities and not drain it off for monied interests to control.
What is important, more than the change of position in terms of raising the debt ceiling, is the critical nature of the debt ceiling as leverage and its consequences, independent of the fact that it just happens to be a handy tool to pick up and use to beat the dems with this time around. Why has it not been used by the dems against Bush? Why, even, has it not been used by the reps under Newt, who had no problem embalming the Congress before he shut the federal government down over sitting in the back of the jet?
The debt ceiling as a gambit, is a political nuclear option. The threat alone is as great as its use, in political terms. However, here at NC, the conflation of economic analysis with political analysis is problematic. Because of the segmented intellectual disciplines of economic, political and social analysis, very cumbersome phrases and sentences are employed to convey the events of the social system as a whole.
What is driving the reps as a newly reformulated party, completely different from its most recent iteration of the post 1968 era, is the complete change of circumstance of worldwide capitalism. We are a creditor nation for the first time in history, and much is owed to people who the militant right wing continue to demonize as Chicoms. So, financial brinkmanship against our creditors goes hand in hand with neo-liberal globalism, considering that we can further our power position via financialized warfare, cyber warfare but not actual gunfire. It is a variation on The Cold War, small scale confrontations via proxies not leading to WWIII. If the republicans can obtain what they want via the continuation of diminishing state sovereignty and maximizing private property rights, superceding the state’s powerful financial clout by weakening it in already weakened credit markets, the US Government comes back into proportion to the failed international commerce system.
The global capital market is still insolvent, but was bailed out by the US Government, which promoted the USA up to a position to be actually governing and regulating and controlling world wide capital markets by means of lifesaving maneuvers, never before attempted by one hegemonic nation state. The one who crowns the king has the power, and the banks, as kings, do not want the USA to repeat its godhead performance. In seeking to weaken the US Government, either as an empty threat or a real, but unlikely threat, it is a threat none the less.
The US Government, populated with people who have real power to challenge the banks, do not, because they are partners. Up until there are conflicts of course, among the disparate parties that make up the powerful and wealthy elite class. This intra state conflict, with world wide implications, is of no matter to specific industries, groups and families, who may see their fortunes continue to rise amid the chaos. Since the USA is deindustrialized, a creditor nation to foreign sovereigns, and since mobile capital has decamped for Dubai, such as Halliburton, nuking the US Government in the capital markets is less of a problem today, than ever for those whose business concerns are no longer coupled with the American Nation.
One of the common rhetorical tricks is to superimpose the sins of the teaparty over the sins of the republican party to make them look sociopathic.
There is no question that the bush-bama presidency has been a disaster. The republicats have coddled wall street and taken our national debt to the tipping point.
The tea party is willing to precipitate a disaster that they feel is overblown to avoid a disaster that is underblown.
These are two orthogonal issues. I am sympathetic to the tea party on this issue, but feel strongly on a more simple point: Ideologies of all stripes are failing us in today’s crisis. And as I watch liberals clinging to their ideals well past their sell-by date, I recognize that libertarianism is no less naked.
How can you reconcile these concepts?
Court widens scope of property seizure
It rules 5 to 4 that local governments can take homes and other property for private development.
.By Warren Richey, Staff writer of The Christian Science Monitor / June 24, 2005
“Government officials do not violate the US Constitution when they seize and demolish homes and businesses to make room for private development.
In a major decision that narrows the constitutional protection of property owners, the US Supreme Court ruled Thursday that the Fifth Amendment’s Takings Clause authorizes government seizure of private property even when it merely offers a benefit to the public, rather than actual public use.
The 5-to-4 decision means that state and local officials can continue to use the government’s power of eminent domain to take private property and turn it over to a private builder as a form of economic development. Writing for the majority, Justice John Paul Stevens said that a century of case law interpreting the Takings Clause “dictates” that the court adopt a permissive interpretation of the government’s eminent-domain power.”
Yet,”If the republicans can obtain what they want via the continuation of diminishing state sovereignty and maximizing private property rights superceding the state’s powerful financial clout by weakening it in already weakened credit markets, the US Government comes back into proportion to the failed international commerce system.”
Money is fungible, if companies sitting on cash is retarding growth, what’s the problem?
I fear you do not fathom how far along in a hyperinflationary breakdown we are right now. Glass-Steagall’s restoration is fast approaching. There’s no other way out.
My question is, is it only money parked in property that can be seized or can any parked money (that stalls the economy) be seized?