“Defining Default Down”: Conservatives Have An Eccentric Definition Of What Constitutes A “Default”
An important detail to keep in mind when one is trying to reconcile Republicans claims that they won’t allow a debt default but also won’t allow a vote on increasing the debt limit unless Democrats make concessions is this: conservatives tend to have a rather eccentric definition of what constitutes a “default.” National Journal‘s Tim Alberta and Michael Catalini offered a reminder yesterday:
Not only do some conservatives say Oct. 17 is an artificial deadline—”Nobody thinks we’re going to default on Oct. 17th,” said Rep. Tim Huelskamp, R-Kan.—but they also are attempting to narrowly define what would constitute default.
In interviews with more than a dozen GOP lawmakers, the Republicans rejected the notion that Washington could default on its debt unless a borrowing increase is approved before Oct. 17. For the United States to actually default, these Republicans argue, the Treasury Department would have to stop paying interest on its debts—something GOP lawmakers claim is inconceivable….
If this sounds familiar, it’s because it has been Republicans’ line of attack since their debt-ceiling battle with Obama in the summer of 2011.
Then, as now, the GOP argues it’s not the debt limit that would cause default, it’s Obama. The country would have the funds to pay its creditors if the administration would just delay payments to certain agencies.
This “prioritization” argument, of course, rests on a distinction without a difference in the real world.
“I don’t know any serious person who doesn’t think this will be cataclysmic,” said Steve Bell, a former Republican staff director of the Senate Budget Committee and now senior director with the Bipartisan Policy Center.
The assumption that the U.S. will honor all of its debts—and honor them on time—is the foundation for much of the global financial system, Bell argues. So the fundamental problem with the Republican position is that Treasury makes between 3 million and 5 million financial transactions a day, and if the federal government starts to pick and choose which it will honor, it will land the economy in chaos.
In any event, journalists reporting all these “We won’t allow a default” assurances from John Boehner and others need to go to the trouble of insisting on a definition of terms. If the reference is to a narrow, “technical” default along the lines that Republicans often use, the assurances are virtually worthless.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 7, 2013
“Nazis, Lynching And Obamacare”: In An Era Of Metaphors Gone Mad
You might think that the methodical extermination of millions of Jews by a brutal regime intent on world domination would resist appropriation as an all-purpose metaphor. You might think that genocide, of all things, would be safe from conversion into sloppy simile.
After Paul Ryan’s fact-challenged address at the Republican National Convention last year, the chairman of the Democratic Party in California actually compared him and his compatriots to the Nazi propaganda minister Joseph Goebbels. A short time later, the chairman of the Democratic Party in South Carolina likened that state’s Republican governor, Nikki Haley, to Adolf Hitler’s mistress, Eva Braun.
At that point Abraham Foxman, the national director of the Anti-Defamation League, did what he shouldn’t need to do even once, let alone the multiple times that he’s been forced to. He implored politicians and pundits to stop it already.
No matter. Allusions to Nazi Germany were back for debates over gun control and, of course, Obamacare. Ted Cruz, the Senate’s prince of tirades, compared people who claim that the new insurance program can’t be stopped to those who rolled over for Hitler and the Third Reich. This prompted a public reprimand from John McCain, who has developed something of a sideline career of swatting Cruz on the nose. They’re like a hapless master and his hopeless dachshund. The former keeps trying to housebreak the latter, while the latter just beams at every mess he makes.
It’s not only Nazis who are flourishing in this era of metaphors gone mad, of analogy bloat. Lynch mobs are also having a good go of it. A senator who was quoted anonymously in The Times last week used that term to describe the Republican lawmakers who had lit into Cruz during a private luncheon, and lynching was invoked more disturbingly by the chief executive officer of A.I.G., who recently said that public complaints about Wall Street bankers’ bonuses were intended “to get everybody out there with their pitchforks and their hangman nooses.” This, he added, was “sort of like what we did in the Deep South.”
How absolutely bonkers. And yet how unsurprising. We’re awash these days in metaphors as overworked as our political debate is overwrought, and it’s impossible not to wonder how much one contributes to the other. When nuance and perspective exit the language, do they exit the conversation as well? When you speak in ludicrous extremes, do you think that way, too?
Obamacare has proved to be not just ideologically divisive but linguistically fertile. There’s seemingly no event or passage in American history to which it can’t be compared.
The terrorist attacks of 9/11? Check. Back when Mike Pence, Indiana’s Republican governor, was still in Congress, he summoned that day’s horror to characterize the Supreme Court ruling that upheld the Affordable Care Act.
Slavery? Check. Ken Cuccinelli, the Republican candidate for governor of Virginia, has described opposition to Obamacare in terms of stands against fugitive slave laws.
The hyperbole and hysteria make any constructive debate impossible, and they insult the past, robbing important events of the specific meaning and individual detail they deserve. Consider our recurring “-gate” mania. We equate each new scandal, whether extra-large or fun-size, with Watergate, and by willfully misremembering President Richard Nixon’s crimes, we dilute them. It’s just a suffix for the taking, a point of comparison for such wildly unrelated matters as the spilled secrets of Arkansas law enforcement officers who were supposedly privy to Bill Clinton’s private life. Troopergate, that was called.
For President Obama, Benghazi was supposed to be his Watergate, and so was the I.R.S.’s scrutiny of conservative groups, and so were a bunch of other things I can’t even remember anymore. They blur and fade, which is not to say they didn’t matter. It’s to say that when everything is supposedly like everything else, nothing’s distinctive. It’s all one big mush.
For that reason, among others, we should watch our words. They have consequences. As irresponsible and detestable as the recent actions of the most conservative wing of House Republicans have been, we’d be better off without figurative talk of hostage taking and guns to heads, without headlines like one in The Huffington Post that said: “Boehner Threatens to Shoot the Hostage.” That sort of language only turns up the heat.
And I cringe at how pointlessly hurtful it must have been for a 9/11 widow or widower to listen to the right-wing moralist Gary Bauer exhort voters to fight back against President Obama’s agenda the way passengers on United Flight 93 fought back against hijackers. Or for Holocaust survivors to hear all this gratuitous Nazi talk.
You know what’s just like Germany in the 1930s? Germany in the 1930s. We’re in an unfortunate place, but we needn’t travel back there to describe it.
By: Frank Bruni, Op-Ed Columnist, The New York Times, October 7, 2013
“The Boehner Bunglers”: The Truly Incompetent Can’t Even Recognize Their Own Incompetence
The federal government is shut down, we’re about to hit the debt ceiling (with disastrous economic consequences), and no resolution is in sight. How did this happen?
The main answer, which only the most pathologically “balanced” reporting can deny, is the radicalization of the Republican Party. As Thomas Mann and Norman Ornstein put it last year in their book, “It’s Even Worse Than It Looks,” the G.O.P. has become “an insurgent outlier — ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
But there’s one more important piece of the story. Conservative leaders are indeed ideologically extreme, but they’re also deeply incompetent. So much so, in fact, that the Dunning-Kruger effect — the truly incompetent can’t even recognize their own incompetence — reigns supreme.
To see what I’m talking about, consider the report in Sunday’s Times about the origins of the current crisis. Early this year, it turns out, some of the usual suspects — the Koch brothers, the political arm of the Heritage Foundation and others — plotted strategy in the wake of Republican electoral defeat. Did they talk about rethinking ideas that voters had soundly rejected? No, they talked extortion, insisting that the threat of a shutdown would induce President Obama to abandon health reform.
This was crazy talk. After all, health reform is Mr. Obama’s signature domestic achievement. You’d have to be completely clueless to believe that he could be bullied into giving up his entire legacy by a defeated, unpopular G.O.P. — as opposed to responding, as he has, by making resistance to blackmail an issue of principle. But the possibility that their strategy might backfire doesn’t seem to have occurred to the would-be extortionists.
Even more remarkable, in its way, was the response of House Republican leaders, who didn’t tell the activists they were being foolish. All they did was urge that the extortion attempt be made over the debt ceiling rather than a government shutdown. And as recently as last week Eric Cantor, the majority leader, was in effect assuring his colleagues that the president will, in fact, give in to blackmail. As far as anyone can tell, Republican leaders are just beginning to suspect that Mr. Obama really means what he has been saying all along.
Many people seem perplexed by the transformation of the G.O.P. into the political equivalent of the Keystone Kops — the Boehner Bunglers? Republican elders, many of whom have been in denial about their party’s radicalization, seem especially startled. But all of this was predictable.
It has been obvious for years that the modern Republican Party is no longer capable of thinking seriously about policy. Whether the issue is climate change or inflation, party members believe what they want to believe, and any contrary evidence is dismissed as a hoax, the product of vast liberal conspiracies.
For a while the party was able to compartmentalize, to remain savvy and realistic about politics even as it rejected objectivity everywhere else. But this wasn’t sustainable. Sooner or later, the party’s attitude toward policy — we listen only to people who tell us what we want to hear, and attack the bearers of uncomfortable news — was bound to infect political strategy, too.
Remember what happened in the 2012 election — not the fact that Mitt Romney lost, but the fact that all the political experts around him apparently had no inkling that he was likely to lose. Polls overwhelmingly pointed to an Obama victory, but Republican analysts denounced the polls as “skewed” and attacked the media outlets reporting those polls for their alleged liberal bias. These days Karl Rove is pleading with House Republicans to be reasonable and accept the results of the 2012 election. But on election night he tried to bully Fox News into retracting its correct call of Ohio — and hence, in effect, the election — for Mr. Obama.
Unfortunately for all of us, even the shock of electoral defeat wasn’t enough to burst the G.O.P. bubble; it’s still a party dominated by wishful thinking, and all but impervious to inconvenient facts. And now that party’s leaders have bungled themselves into a corner.
Everybody not inside the bubble realizes that Mr. Obama can’t and won’t negotiate under the threat that the House will blow up the economy if he doesn’t — any concession at all would legitimize extortion as a routine part of politics. Yet Republican leaders are just beginning to get a clue, and so far clearly have no idea how to back down. Meanwhile, the government is shut, and a debt crisis looms. Incompetence can be a terrible thing.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 6, 2013
“The Debt Ceiling Matters”: House Republicans Are Threatening To Unambiguously Violate The Constitution
The word we keep hearing is “catastrophe.”
“A U.S. Default Seen as Catastrophe, Dwarfing Lehman’s Fall,” screams the headline in Bloomberg Businessweek. “A default would be unprecedented and has the potential to be catastrophic,” says a Treasury Department report issued on Thursday — two weeks before the government is expected to begin running out of cash.
But what does “catastrophic” actually mean in this context? In the summer of 2011, when Republicans refused to raise the debt ceiling unless President Obama caved to their extortionist demands, the same word was bandied about. It scared the political class enough that they kicked the can and avoided a default.
This time around, the need to raise the debt ceiling doesn’t seem to be generating nearly the same concern. Indeed, Tea Party Republicans seem to be almost rooting for the government to default, as if that would somehow bring about the smaller government they so yearn for.
But this is incredibly wrongheaded. A failure to raise the debt ceiling, should it come to that, would likely inflict a different kind of pain than sequestration or even a shutdown of the federal government. It won’t make the government smaller. But it does have the potential to diminish the value of one of America’s greatest assets — the backing of its debt — while throwing the world economy into chaos.
The first point worth making is that the 14th Amendment to the Constitution, which declares that “the validity of the public debt of the United States . . . shall not be questioned,” was added precisely to avoid what is happening now: a faction of Congress using the debt ceiling as a bargaining chip. That basic truth, as Fortune’s Roger Parloff noted in a recent blog post, “ought to weigh very heavily in the minds — and on the consciences — of the House Republican faction that is now unambiguously violating its letter and spirit.”
The second point worth making is that U.S. government debt is the only risk-free asset in the world. That debt undergirds the entire world financial system — precisely because the whole world has such faith in it. There is always demand for U.S. government debt. Almost every other asset you can think of is in some way measured against it. A default would destabilize the market for Treasuries. And that, in turn, would likely destabilize every other asset.
The stock market would fall. Interest rates would rise — meaning, for instance, mortgages would become more expensive just as the housing market is starting to revive. Treasuries themselves would likely have to pay higher interest to investors, which would create a rather sad irony: a default would exacerbate the country’s long-term debt (the very problem the Republicans claim to care about).
Let’s move to the havoc a destabilized Treasury debt would have on the banking system. “The plumbing of the global financial system depends on Treasuries,” says Karen Petrou, a banking expert at Federal Financial Analytics. Remember what happened to Lehman Brothers? As the market lost faith in the company’s ability to meet its obligations, Lehman lost access to the “repo” market, which is the way banks are funded on a short-term basis. Treasuries make up a great deal of the collateral in the repo market. If a default were to cause the repo market to freeze, the entire banking system would find itself in crisis. Meanwhile — more shades of Lehman Brothers — the ratings agencies would likely downgrade Treasuries, forcing money market funds to start dumping government debt.
Painful choices would have to be made. Right now, the Treasury Department says it does not have the authority to pick and choose which creditors to pay. But, in the event of a default, it is hard to imagine that the government wouldn’t make some tough decisions about who should get paid in the short term — and who would have to wait. And, though this would infuriate millions of Americans, bondholders in China would likely get their money ahead of, say, Social Security recipients.
“From a purely cost-benefit analysis,” says Mark Zandi of Moody’s Analytics, “not paying bondholders would wind up costing the U.S. much more than not paying Social Security recipients” — because if bondholders lost faith in Treasuries, it would cost the government billions more in interest payments each year.
During the 2011 debt-ceiling crisis, consumer confidence dropped by 22 percent. When consumer confidence falls, people are less willing to spend and businesses are less willing to hire. That’s how recessions — or depressions — begin, and that may be the most important consequence of all.
For as long as anyone can remember, the ability of the United States government to pay its bills on time has given the rest of world tremendous confidence. At the same time, to have the one asset everyone in the world trusts has given America great advantages.
Why on earth would we ever risk that? Why?
By: Joe Nocera, Op-Ed Columnist, The New York Times, October 8, 2013
“Woefully Ignorant”: Congressional Republican Lawmakers Who Struggle With Basic Concepts
Rep. Ted Yoho (R-Fla.) knows exactly how he plans to deal with the debt ceiling and the full faith and credit of the United States.
“I think we need to have that moment where we realize [we’re] going broke,” Yoho said. If the debt ceiling isn’t raised, that will sure as heck be a moment. “I think, personally, it would bring stability to the world markets,” since they would be assured that the United States had moved decisively to curb its debt.
Now, Ted Yoho isn’t some random guy who called into a talk-radio show, or some troll in online comments thread. He’s a member of Congress. This elected federal lawmaker believes world markets would be more stable if the United States chose default on purpose.
While every day brings new evidence of policymakers saying foolish things about important issues, I feel like there are more examples than usual crossing the radar right now.
* Rep. Darrell Issa (R-Calif.) wants to replace “Obamacare” with a federal benefits program that’s eerily similar to the Affordable Care Act.
* Rep. Jack Kingston (R-Ga.) demanded to know why a reporter with health care insurance didn’t enter an exchange marketplace designed for people with no health care insurance.
* Sen. Tom Coburn (R-Okla.) argued this morning that there’s “no such thing as a debt ceiling in this country,” and we won’t “default” on our debt by failing to raise the debt limit.
* Rep. Mike Pompeo (R-Kan.) is convinced the government shutdown is about entitlement spending.
The list goes on (and on), but the larger point is, the country is in a difficult spot right now. The government is shut down, a debt-ceiling crisis is underway, and there’s no clear way out of the ongoing, self-imposed fiascos. The nation would benefit from sensible, knowledgeable policymakers showing sound judgment.
Instead we have these guys.
By: Steve Benen, The Maddow Blog, October 7, 2013
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