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Debt Ceiling Warning: Inaction Would Double Interest Rates, Crash Market

Public efforts by both House Speaker John Boehner and President Obama to convince skeptical new Republican House members to add $2 trillion to the nation’s burdensome $14 trillion debt ceiling are being reinforced by dire warnings from business leaders that failing to OK the increase will lead to inflation, an immediate doubling of interest rates and a killer Wall Street crash.

“If they don’t increase the debt, there will be a huge impact on the economy,” a Wall Street executive told Whispers on background. “Interest rates would spike. S&P and Moody’s would downgrade U.S. debt, raising the price of borrowing, there would be a market sell-off, it would be a disaster.”

While Boehner, who yesterday called for a deal that would OK the debt ceiling increase in return for trillions of dollars in spending cuts, Wall Street lobbyists and banking and business leaders are meeting with several of the new Tea Party-backed House members who pledged to stop raising the ceiling to explain the impact of standing pat.

“A lot of freshmen are new to the issue,” said one of those meeting with the new members, some of whom signed pledges not to raise the debt ceiling no matter what.

Among the specifics the sources say they are telling the new members:

— Inflation could jump, though they aren’t giving any percentage growth.

— Interest rates could double if U.S. debt is downgraded. House loans, for example, that are now below 5 percent, could surge to 9-10 percent, killing any chance of fixing the housing slump or cutting the unemployment rate, now at 9 percent.

— The stock market could suffer a 10 percent drop, far more significant than the 778 point thrashing Wall Street took when the House rejected the government’s $700 billion bank bailout plan in September 2008.

“That market sell-off will look small compared to what we’ll see,” said a Wall Street executive.

So far, the campaign to turn the naysayers around is starting to work, say those involved. Helping is the expectations that the debt ceiling won’t actually be breached until August.

While there have been warnings that the vote must come sooner due to expectations that the cap will be breached this month, officials explained that Treasury can make several moves to postpone that until about August 2.

By: Paul Bedard, U. S. News and World Report, May 10, 2011

May 10, 2011 Posted by | Banks, Businesses, Congress, Conservatives, Debt Ceiling, Deficits, Economic Recovery, Economy, Financial Institutions, GOP, Government, Government Shut Down, Jobs, Lawmakers, Lobbyists, Politics, President Obama, Republicans, Right Wing, Tea Party, Unemployment, Wall Street | , , , , , , , , , | Leave a comment

Tea Party Puts The Screws To House Republicans Over Debt Ceiling

Tea party activists have taken some lumps lately, but they’re not going down without a fight.

With TV ads, petitions and grassroots lobbying, tea party organizers are gearing up to send an absolutist message to Capitol Hill: Don’t raise the debt ceiling under any circumstances. Tea party activists have already clashed publicly with some of the 87 GOP freshmen they helped elect last year, and they’re warning that Republicans who don’t keep their fiscal promises will pay a political price.

“We will remove as many incumbents as we can that do not do the job they were hired to do,” Darla Dawald, national director of the tea party group Patriot Action Network, said in an e-mail. “We are watching every member of Congress, their votes, position and language.”

A newly formed conservative political action committee has released an ad opposing a debt ceiling increase and disputing the $100 billion in cuts that House Speaker John Boehner, R-Ohio, touted in the recent budget agreement. The ad cites the Congressional Budget Office finding that cuts totaled less than $400 million. But its real target is President Obama and his “massive deficit spending.”

The ad was released by the new Campaign to Defeat Barack Obama PAC, a spinoff of the Our Country Deserves Better PAC, the party of the Tea party Express. The latter is about to launch its own national TV ad campaign opposing a debt ceiling increase, said Amy Kremer, who chairs Tea party Express. The PAC raised and spent $7.7 million in the 2010 cycle, according to the Center for Responsive Politics.

Another conservative activist group, Grassfire Nation, is gathering signatures from its 1.8 million members on a petition opposing “any increase in the legal federal debt limit,” to be delivered by hand in the coming weeks to lawmakers on Capitol Hill. A Grassfire Nation poll found that close to 80 percent of its members opposed raising the debt ceiling, even if conditions such as spending cuts or caps were attached.

“It’s no secret that the tea party movement’s unhappy,” said Kremer. “You’re seeing people on a local level really upset with their congressmen and women.” Reps. Michael Grimm, R-N.Y., Tom Price, R-Ga., and David Schweikert, R-Ariz., are among the House Republicans who have fielded flak from conservative bloggers, demonstrators, or town hall hecklers upset that Congress isn’t acting faster to bring down the deficit.

“There’s a frustration that we can’t move faster,” said Americans for Tax Reform president Grover Norquist, referring to the tea party movement. “But also an understanding that their job is to say: Let’s do more, let’s do more, let’s do more.”

The debt ceiling vote will be a key test of both the tea party and of the GOP on the threshold of the 2012 election. Technically, the federal government will run out of money in mid-May, but Treasury Secretary Timothy Geithner has signaled that accounting adjustments may give Congress until early August to actually vote.

It’s an open question how successful the tea party will be, both in the debt ceiling fight and on the campaign trail next year. Of the GOP freshmen, who’ve played a pivotal role in the unfolding budget drama, one bloc would raise the debt ceiling on the condition of substantive budget reforms or spending cuts, sources say. Another bloc opposes a debt ceiling increase flat out. And about a third are undecided.

Tea party activists are up against expert and administration warnings that failing to raise the debt limit could send the economy and the stock market into a tailspin. The tea party’s star, moreover, may be fading.

A Capitol Hill protest in March to demand more budget cuts proved underwhelming. The movement’s national leaders, most notably former Alaska Gov. Sarah Palin and Rep. Michele Bachmann, R-Minn., have drifted to the fringes of the GOP White House nominating contest. A couple of tea party PACs unveiled to much fanfare last year–Ensuring Liberty and Liberty First–have fizzled. And GOP leaders have signaled that certain tea party goals–repealing the health care law, partially privatizing Medicare–may or may not be on the table in ongoing debt limit negotiations.

It “absolutely is not true” that the movement is losing steam, countered Kremer. “You’re not seeing the great big rallies that you did before, because people are engaged on a local level doing things.”

Virginia tea party activist Jamie Radtke, who’s launched a Senate campaign for the seat now held by Democratic Sen. Jim Webb, concurred that the movement is shifting from a national to a local focus: “There is a strong desire in the tea party movement to keep the tea party local.”

Radtke predicted that activists will take the fight over the debt limit to the mat. “The GOP is on probation, because under President Bush they spent a lot of money, and added $3 trillion to the national debt,” she said, adding: “You will see that the tea party will have no problem whatsoever challenging the very freshmen they put in.”

Such warnings still make some on Capitol Hill very nervous. But as Republicans struggle between idealism and pragmatism, the GOP–and the tea party–might soon face a moment of truth.

By: Elizabeth Newlin Carney, Contributing Editor, National Journal Daily, May 9, 2011

May 10, 2011 Posted by | Budget, Congress, Conservatives, Debt Ceiling, Deficits, Democracy, Economic Recovery, Economy, Elections, GOP, Government, Government Shut Down, Ideologues, Ideology, Lobbyists, Politics, Republicans, Right Wing, States, Tea Party, Voters | , , , , , , , , | Leave a comment

Recall Elections Enhance Democracy: Wisconsinites Are Holding Their Elected Officials Accountable

It’s true that the recall election was never intended to replace our representative form of government, and it’s most certainly not a tool to be used lightly. However, when elected officials subvert the will of those they represent, enacting a radical agenda that seeks to concentrate power in the hands of the very few and jeopardizing the livelihoods of the people they are supposed to protect, the exercise of the constitutionally guaranteed right to force a recall election is a just and proper tool to hold those elected officials accountable for their actions.

And, although the use of the recall election is an appropriate expression of voter outrage, the fact remains that the actual undertaking of a recall election is an incredibly daunting task that requires collecting a great amount of signatures in a relatively short period of time. Here in Wisconsin, the number of valid signatures required to trigger a recall election is equal to 25 percent of the number of persons who voted in the last election for the office of governor within the electoral district of the officer sought to be recalled. Even more of a challenge, these signatures, numbering in the thousands, or possibly even hundreds of thousands, must be collected in a mere 60 days.

These requirements are incredibly stringent, and in being so, protect the integrity of the electoral process by ensuring that the recall election is not used to undermine representative democracy. Prior to the historic recall filings of the past few weeks, Wisconsin has only had four recalls of state officials, dating back to 1926, when, at the very heart of the Progressive movement, the Wisconsin Constitution was amended to provide for the recall of elected officials. Two of those four were successful.

The unprecedented efforts of thousands of engaged citizens only serve to illustrate the significance of the events of recent weeks, where the tremendous momentum against Republican legislators who enabled Gov. Scott Walker’s extreme power grab continues unabated, and where Wisconsinites continue to express their outrage over record cuts to education, healthcare, and support for our seniors and the most vulnerable, while granting tax cuts for the very rich.

It’s clear that the tide is turning in Wisconsin. The people have sent an unmistakable signal to an intransigent governor and his rubber-stamp legislature that their divisive methods and preference for placing narrow and partisan corporate interests over the people they represent have been rejected, and there is no choice now but to know that the voices of thousands of working Wisconsin families will be heard.

The actions of the Republican legislators facing recall are extreme, dangerous, and way out of step with Wisconsin values. Through the power of their ballots in recall elections, Wisconsinites have the opportunity to hold their elected officials accountable and effect immediate change so they are no longer subject to the will of politicians more concerned with promoting the agenda of their party bosses than with keeping their promises to represent the will of their constituents.

Recall elections send a direct message to elected officials—that they will be held responsible for the promises they make to the people they represent, and if they fail to keep those promises, they risk drawing the ire of the electorate.

Recall is undoubtedly a powerful tool, but it does not weaken democracy. If anything, it enhances it.

By: Mike Tate, U. S. News and World Report, May 10, 2011

May 10, 2011 Posted by | Collective Bargaining, Conservatives, Constitution, Corporations, Democracy, GOP, Gov Scott Walker, Government, Lawmakers, Liberty, Politics, Public Employees, Republicans, Right Wing, State Legislatures, States, Union Busting, Unions, Wisconsin, Wisconsin Republicans | , , , , , , , , , , , | Leave a comment

The Campus Carry Movement Stutter-Steps Across America

Last October, an email popped into my inbox from Mike Stollenwerk, co-founder of gun rights networking hub OpenCarry.org, which boasts the motto, “A right un-exercised is a right lost.” He was responding to a question I had about the possible re-tabling of a bill in the Texas legislature which would, if passed, allow students to carry handguns with them to college.

At the time, only Utah allowed the carrying of concealed weapons into the classrooms of public universities, while Colorado left it up to the colleges themselves to decide. Stollenwerk wrote: “My bet is that there are a fair number of college students and faculty members across America who, after the Virginia Tech murders, have decided to regularly carry loaded concealed handguns to class even when it violates college administrative rules … I hope campus carry is legalized in Texas soon.”

But faculty members weren’t as keen on their students packing heat during their lessons as Stollenwerk thought they might be. Last month, just as state senators were ready to send a bill to allow handguns on campus to a final vote, University of Texas (UT) Chancellor Francisco Cigarroa wrote a public letter to legislators saying the gun bill was a bad idea. And he had the public support of both the UT Faculty Counsel and Texas A&M University Faculty Senate. The result: the bill stalled in the Texas senate, lacking the two-thirds of votes needed to get it on to the floor.

But Sen. Jeff Wentworth, the Texas Republican who authored the bill, was persistent, and yesterday he managed to get it tacked on to a piece of education finance reform legislation which passed the state senate.

If the bill in Texas becomes law, some professors there have said they plan to include a clause in syllabi stipulating that students are not be permitted to carry guns into their classroom — and then simply refuse to teach classes where students don’t assent.

Campus-carry legislation was also on the move this spring in Arizona. Three weeks ago, the state’s conservative governor Jan Brewer vetoed a gun rights bill that had already made its way successfully through both houses, saying it was “poorly written” and that allowing guns to be carried in ‘public rights of way’ could have included K-12 schools — something prohibited under state and federal law.

But the hiccup in Arizona hasn’t stopped the movement to allow guns on campus gather momentum elsewhere. This year alone an astonishing 20 states have seen ‘guns on campus’ bills introduced (so far seven have failed).

The non-profit Brady Campaign to Prevent Gun Violence points out that since the 2007 Virginia Tech massacre, campus-carry legislation has been stymied 51 times in 27 states. But they shouldn’t sit back and breathe a sigh of relief just yet. In Arizona, Brewer has signaled that she’d consider future campus-carry legislation if it addressed her concerns.

The gun rights lobby is powerful — and persistent. And here’s a peculiar anomaly: that movement seems emboldened by the perception that President Obama is a “committed anti-gunner,” as the Gun Owners of America organization said during his initial run for president. This perceptions persists despite the fact that the Brady Campaign issued a report card last year failing him on all of the issues it considered important — including closing gun show loopholes and curbing trafficking.

In fact, since taking office, Obama has signed a law permitting guns to be taken into national parks and wildlife refuges and another allowing people to check guns as baggage on Amtrak. During a campaign speech in Virginia back in 2008 he declared: “I will not take your shotgun away. I will not take your rifle away. I won’t take your handgun away.” If anything, until now the Obama administration’s hands-off attitude toward gun control has paved the way for the campus-carry movement to flourish, while the misperception that he wants to take people’s guns away has been used as an effective tool to bolster support for Second Amendment groups.

The Brady Campaign’s Brian Malte told me that since his organization issued Obama an “F” on his report card for his first year in office, the president has made some steps in the right direction: a few weeks ago he wrote an op-ed piece for the Arizona Star newspaper in which he emphasized the need for failsafe background checks for gun owners. “An unbalanced man shouldn’t be able to buy a gun so easily,” he wrote. And he nominated Andrew Traver to head up the Bureau of Alcohol, Tobacco, Firearms and Explosives — a man who has been outspoken on gangs and weapon control, and whose nomination the NRA opposes.

But none of this is likely to have any effect on the lobby to push campus-carry legislation at the state level. And I don’t like the idea of anyone carrying a gun in public, let alone a 21-year-old student fueled by testosterone and alcohol. When I was at university in the mid-’90s, we drank far more than was good for us. Add guns to the mix and it’s a volatile concoction. When you think of it like that: giving guns to young students largely interested in sex and booze, I’d wager it seems less of a genius idea.

Angela Stroud, a PhD candidate at the University of Texas, has spent the last two years researching the social meanings of concealed handgun licensing. She’s conducted over 40 interviews and even took the handgun license test herself so she’d be more informed. She told me there are those opposed to guns who consider ‘what’s best for society’, and those who are pro-second amendment for whom the ‘greater good’ does not form part of their argument. “There is a major privileging of the individual,” she said. “And it’s a powerful experience to become enmeshed in this worldview. There’s a fear. Instead of saying that incidents like Virginia Tech rarely happen, they say that even a one-in-a-million chance of being murdered is a frightening thing. They see two major threats — one is a criminal who wants to kill you; the other is a government that wants to control you.”

For me, the argument that you could prevent another Virginia Tech with more guns is fatuous. Guns are designed for one thing only — and the more of them there are, the greater the chance of someone getting hurt. Texas Senator Rodney Ellis issued a statement saying the bill would do nothing to improve the safety of students on campus in his state and could, in fact, make dangerous situations more deadly by creating confusion for law enforcement. “We don’t need to incentivize campus Rambos,” he said.

I couldn’t agree more.

By: Alex Hannaford, The Atlantic, May 5, 2011

May 10, 2011 Posted by | Democracy, GOP, Guns, Ideology, Lawmakers, National Rifle Association, Politics, Republicans, State Legislatures, States | , , , , , , , , , , , , , , , | Leave a comment

   

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