Economic Illiteracy: GOP Catering To Tea Party Ignorance On Debt Ceiling
What happens when you take the certainty of an ideologue, mix in an unhealthy dose of economic illiteracy, shameless demagoguery, and bring the combustible mix to a boil on the national stage? Quite possibly national default and a new recession.
The nature of this mix—and the corner into which GOP leaders have painted themselves—is neatly illustrated in the latest poll numbers from The Washington Post and the Pew Research Center.
As the Post’s Chris Cillizza and Aaron Blake note today:
The data suggests that those who identify as Republicans who are supportive of the tea party not only view themselves as far more educated than the average person on the current debt debate, but are also far more worried about the impact if the debt limit is increased.
More than eight in 10 tea party supporters (81 percent) said they understand “what would happen if the government does not raise the federal debt limit” — far more than the 55 percent of all respondents who said the same thing.
Three quarters of tea party supporters said that they were more concerned that raising the debt ceiling would “lead to higher government spending and make the national debt bigger,” while just 19 percent said they were more worried that “not raising the debt limit would force the government into default and hurt the nation’s economy.”
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The message from the numbers? Tea party backers simply don’t believe that not raising the debt limit by Aug. 2 is all that big a deal — and they feel that way because they believe they understand the issue inside and out.
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If a significant chunk of his House members don’t fear the consequences of a default, it’s very difficult for Boehner to make the case for the fierce urgency of now in the debt debate.
While the overwhelming number of economists—and even prominent non-economists like John Boehner and Mitch McConnell, who have both stated that not raising the debt ceiling is unthinkable—say that failure to raise the debt ceiling could have a host of nasty consequences for the economy, like a global financial crisis, downgrading of the U.S. credit rating, and a second recession … the Tea Party crowd has anointed itself a group of experts who know better.
This is why Eric Cantor could with a (presumably) straight face argue yesterday that the GOP’s great concession in this debate was considering a debt ceiling increase at all. But sorry, our base is too wound up in its own misconceptions to allow us to do the slam dunk right thing for the county is the politics of cowardice. And it’s a brand that Cantor, who has referred to the debt ceiling crisis as a “leverage moment”—an opportunity for the GOP to extract concessions in order to be forced to do the right thing—has played with either cold cynicism or reckless stupidity.
Then there’s Boehner, who acknowledges the debt ceiling must be raised but cloaks it in the language of Obama getting “his” rise in the debt ceiling—as if keeping the country from an economic disaster is some parochial, partisan, hobby.
No less a publication than The Economist, hardly a hotbed of socialist foment, recently called the GOP position “economically illiterate and disgracefully cynical.” I think that’s about right.
By: Robert Schlesinger, U. S. News and World Report, July 12, 2011
A False Equivalency: Don’t Blame ‘Both Sides’ For Debt Impasse
Washington has many lazy habits, and one of the worst is a reflexive tendency to see equivalence where none exists. Hence the nonsense, being peddled by politicians and commentators who should know better, that “both sides” are equally at fault in the deadlocked talks over the debt ceiling.
This is patently false. The truth is that Democrats have made clear they are open to a compromise deal on budget cuts and revenue increases. Republicans have made clear they are not.
Put another way, Democrats reacted to the “grand bargain” proposed by President Obama and House Speaker John Boehner by squawking, complaining and highlighting elements they didn’t like. This is known throughout the world as the way to begin a process of negotiation.
Republicans, by contrast, answered with a definitive “no” and then covered their ears. Given the looming Aug. 2 deadline for default if the debt ceiling is not raised, the proper term for this approach is blackmail.
Yet the “both sides are to blame” narrative somehow gained currency after Boehner announced Saturday that House Republicans would not support any increase in revenue, period. A false equivalence was drawn between the absolute Republican rejection of “revenue-positive” tax reform and the less-than-absolute Democratic opposition to “benefit cuts” in Medicare and Social Security.
The bogus story line is that the radical right-wing base of the GOP and the radical left-wing base of the Democratic Party are equally to blame for sinking the deal.
Leave aside, for the moment, the fact that in the Obama-Boehner proposal, there would be roughly three dollars’ worth of budget cuts for every dollar of new revenue. Don’t pause to ask whether it makes sense to slash government spending when the economy is still sputtering out of the worst recession in decades. Instead, focus narrowly on the politics of the deal.
It is true that House Minority Leader Nancy Pelosi howled like a blindsided politician when she learned that entitlement programs were on the table. But her objections — and those of Democrats in general — are philosophical and tactical, not absolute.
Progressives understand that Medicare and Social Security are not sustainable on their current trajectories; in the long term, both must have their revenue and costs brought into balance. Pelosi’s position is that each program should be addressed with an eye toward sustainability — not as a part of a last-minute deal for a hike in the debt ceiling that covers us for two or three years.
It’s also true that Democrats believe they can win back a passel of House seats next year by highlighting the GOP plan to convert Medicare into a voucher program. They don’t want Republicans to be able to point and say, “See, the Democrats want to cut Medicare, too.”
There’s nothing in these Democratic objections, however, that couldn’t be creatively finessed. You can claim you haven’t actually “cut” a benefit, for example, if what you’ve done is restrained the rate at which its cost will grow. You can offset spending with new revenue, and you can do so in a way that gives low-income taxpayers a break. Democrats left the door open and these options could have been explored.
The story on the Republican side is entirely different. There are ways to finesse a “no new taxes” pledge, too. Instead of raising tax rates, you close loopholes in the name of reform; you add an enhancement here, a “user fee” there, and you can manage to get the revenue you need and still claim you haven’t voted to raise taxes.
But Republicans are taking the position that not a cent of new revenue can be raised, no matter the euphemism. Some Democrats, yes, are being scratchy and cantankerous. But Republicans are refusing to negotiate at all. That’s not the same thing.
I understand why President Obama, in his news conference Monday, chided “each side” for taking a “maximalist position.” For political and practical reasons, it’s advantageous for him to be seen as an honest broker.
Meanwhile, though, the clock ticks toward Aug. 2 and the possibility of a catastrophic default becomes more real. And no one should be confused about what the president confronts: On one side, grousing and grumbling. On the other, a brick wall.
By: Eugene Robinson, Opinion Writer, The Washington Post, July 11, 2011
Reckless And Scandalous: ‘A Gamble Where You Bet Your Country’s Good Name’
I can’t help but think the vast majority of the public just doesn’t fully appreciate what’s transpiring here.
We’re dealing, after all, with fairly obscure legal mechanisms. Most Americans don’t know what the federal debt ceiling is, and in fairness, they’ve never had to. It’s a law that was approved more than eight decades ago, and hasn’t been particularly controversial or even relevant since. Policymakers have always realized they have an obligation — legal, economic, moral, and otherwise — to do the right thing.
The United States is like the Lannisters: we always pay our debts. And in the case of the debt ceiling, we’re talking about money we’ve already spent — this is the equivalent of getting a credit card bill for charges we’ve already made. The entirety of the Republican Party — in the House, in the Senate, among its presidential candidates — has said it might pay the bill, but only if Democrats agree to take trillions of dollars out of a fragile economy.
And if Democrats don’t do enough to make Republicans happy, GOP officials will simply refuse to do their duty. They know the consequences would be severe for the nation and the world. They apparently don’t care.
Americans almost certainly can’t appreciate the extent to which they’ve made a tragic mistake. Voters perceived the Republican Party has a conservative governing party, capable of responsible center-right governance, and rewarded the GOP handsomely in 2010. What voters probably didn’t understand are the similarities between today’s Republican Party and a not-terribly-bright organized-crime family, run entirely by petulant children.
The Economist, a conservative publication, had a fascinating editorial this week, explaining that Republicans are creating a crisis, on purpose, for no reason. The United States has a manageable debt, low interest rates, low inflation, and the ability to borrow on the cheap. But because right-wing extremists are chiseling away at our political system, we’re quickly approaching a point of no return.
The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.
This newspaper has a strong dislike of big government; we have long argued that the main way to right America’s finances is through spending cuts. But you cannot get there without any tax rises. In Britain, for instance, the coalition government aims to tame its deficit with a 3:1 ratio of cuts to hikes. America’s tax take is at its lowest level for decades: even Ronald Reagan raised taxes when he needed to do so.
And the closer you look, the more unprincipled the Republicans look…. Both parties have in recent months been guilty of fiscal recklessness. Right now, though, the blame falls clearly on the Republicans.
The Economist added that this is “a gamble where you bet your country’s good name.”
I suspect there are many saying, “We get it; they’re reckless.” But that’s not enough — no one given this much power is supposed to be this reckless. Republicans gained power because voters were frustrated with high unemployment, and yet GOP leaders are threatening to deliberately create a crisis that would make unemployment much worse. And the breaking point is very soon.
All of this could go away in a heartbeat. Republicans could do, today, exactly what they did repeatedly during the Bush years: simply vote to raise the debt ceiling in a clean bill and move on. The entire process could take literally a few minutes.
But GOP officials don’t want to. They want to play a game in which the entire world could lose.
How is this not the biggest political scandal in modern American history? How is it that those who claim the high ground on patriotism could put our financial well being on the line, on purpose, when they don’t have to?
By: Steve Benen, Contributing Writer, Political Animal, Washington Monthly, July 10, 2011
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