Can You Handle The Truth?: What The Public Doesn’t Understand About The Debt Ceiling
When a CBS reporter asked President Obama why a recent poll shows that 69% of Americans don’t want the debt ceiling lifted, he responded by stating that “professional politicians understand the debt crisis better than the general public.” As I heard the words come from his lips, I knew there would be outrage on the right, and the left and certainly the right again!
The problem is, the president was right; ahem, correct.
When posed with the question, “If you have a credit limit and have maxed out your credit card, should you raise your credit limit so you can spend more?” Americans respond with a resounding “NO!” as would I if that were the question.
But here is the real question:
As an American, did you know if we do not raise the debt ceiling and go into default, that thousands of Americans will lose their jobs? And a 9% unemployment rate will be something you’ll hope for? Or that programs like Homeland Security will be cut which I’m sure will make any terrorist organization smile.
How about home owners and small business owners longing for the days of 2008? And that double dip recession the Republicans were trying to scare you about? Well, it certainly would happen. Speaking of money, our bonds will be worthless; and if you think that TARP and the bailout were bad, that’s just an appetizer for the domino effect not raising the debt ceiling would have on Wall Street, perhaps worldwide; just look at what happened with Greece.
I mentioned that the president was right when he said Americans don’t know as much about the debt ceiling crisis as a professional politician; and I do believe that. When some of the nation was outraged or offended by his remark, I could hear Jack Nicholson saying, “The truth, you can’t handle the truth!!”
We need only look at our own television viewing habits to see evidence to support the president’s rhetoric. Let’s take a little quiz shall we?
- Were the Bush tax credits meant to last forever? Answer: No, just ask the authors of the legislation.
- When is the president planning on removing those temporary credits? Answer: 2013 and beyond, not a massive tax cut taking place in August.
- How many times did President George W. Bush raise the debt ceiling? Answer: 7 times.
And where was the Republican outrage then? Answer: they didn’t have a Democrat in the White House up for re-election!
OK…now a few more…
- What former governor’s daughter was on “Dancing With The Stars?” Answer: Sarah Palin.
- What was the verdict in the Casey Anthony trial? Answer: Not guilty.
- Who was voted off (pick one) American Idol, The Biggest Loser or The Bachelorette? Answer: I don’t know, I was too busy paying attention to the debt crisis.
The point is, most Americans would’ve been able to easily answer the latter three questions. We were glued to our T.V. sets during the Casey Anthony trial; not to CSPAN and the ratings prove it. So don’t be offended, the president’s not saying you’re dumb. He is simply saying you don’t have the time to spend 40-60 hours a week to do a job you elected him and Congress to do. Oh, and by the way, the latest poll shows 47% of Americans (Rasmussen) don’t want the debt ceiling lifted; see even the CBS reporter proved the president right with his question. Love that!
By: Leslie Marshall, U. S. News and World Report, July 13, 2011
How Can Anyone Take The GOP Seriously: The Dismal Republican Record On Taxes
“In the present weak economic climate,” a group of conservatives, including Newt Gingrich, wrote in an open statement, “we believe that to restore the health of the economy and put Americans back to work, America should follow a course against high taxes and federal spending.”
The White House was unmoved. “Republicans may feel they can’t go to voters after supporting a tax increase,” one administration official told the New York Times. “We’ve got to convince them that the situation won’t be as devastating as it would be if the tax bill is sabotaged.”
The latest moves in the debt ceiling debate? Not quite: The administration was Ronald Reagan’s, and the year was 1982. With his previous year’s landmark tax cuts having exploded the budget deficit, Reagan had reluctantly backed a tax increase to bring it back under control, prompting a minor conservative uprising led by then Rep. Jack Kemp and which included then backbench House member Gingrich. “You can’t have the largest tax cut in history and then turn around and have the largest tax increase in history,” one conservative rebel groused.
Right-wing economists issued dire forecasts. Arthur Laffer, widely described as the father of supply-side economics, warned that the bill would “stifle economic recovery” and “lengthen and deepen the recession.” The president of the U.S. Chamber of Commerce wrote that the tax hike would “curb the economic recovery everyone wants,” adding: “It will mean a lower cash flow as more businesses pay more taxes, with a depressing effect on stock prices. It will reduce incentives for the increased savings and investment so badly needed to improve productivity and create more jobs.” As Bruce Bartlett, an early supply-sider and Reagan aide who has since recanted the faith, noted last month, “It would be hard to find an economic forecast that was more wrong in every respect.” Real gross domestic product grew at 4.5 percent in 1983 and 7.2 percent in 1984, while unemployment fell from 10.6 percent in December 1982 to 7.1 percent in 1984.
Just about the only thing the conservative rebels got right back in 1982 was Gingrich’s comment to the New York Times that the skirmish was the “opening round of a fight over the soul and future of the Republican Party.” Looking back, the extent to which the conservatives won the fight within the party while losing the war with economic reality is fairly astounding. In the nearly three decades since, the Republican feeling toward tax increases has moved from Reaganesque dislike but acceptance (he signed tax increases into law in seven of his eight years in office) to their current, blindly absolutist position flatly opposing any tax increases at all, even in the face of spiraling deficits and possible economic default.
Witness comments like House Speaker John Boehner’s that “raising taxes is going to destroy jobs.” The rhetoric hasn’t changed much since 1982, but the accumulated evidence against this GOP dogma is overwhelming.
Gingrich was again at the forefront of the fight against taxes in 1993 when he warned that the Clinton budget plan “will in fact kill the current recovery and put us back in a recession.” Rep. Dick Armey, who would go on to be House majority leader and now is a Tea Party godfather, warned that “the impact on job creation is going to be devastating.” Texas GOP Sen. Phil Gramm warned that the budget deal was a “one-way ticket to a recession,” adding that Clinton’s would be one of the jobs killed by the bill. (Gramm would seek Clinton’s job, but couldn’t best Bob Dole; he was last seen being muzzled by John McCain’s presidential campaign in 2008 after calling the country a “nation of whiners.”) Laffer warned that “Clinton’s tax bill will do about as much damage to the U.S. economy as could be feasibly done in the current political environment.” Boehner himself dismissed the Clinton plan as “Christmas in August for liberal Democrats: more taxes, more spending, and bigger government.”
He got the Christmas part right. Unemployment, which had been 7.1 percent in January 1993, fell to 5.4 percent by the end of 1994. Real GDP grew from 2.9 percent in 1993 to 4.1 percent in 1994. The final tally of the Clinton years was 23 million new jobs and a budget surplus.
Clinton and his villainous tax hikes were followed by George W. Bush and his cure-all tax cuts. “Tax relief will create new jobs,” Bush argued in April 2001. “Tax relief will generate new wealth.” When the bill was enacted that June, GOP Rep. Mike Pence (now running for governor of Indiana) gushed that they would “stimulate our economy” and “put the ax to the root of the Internal Revenue Code as it wages war on the American dream.”
How’d that turn out? From 2001 to 2007, jobs grew at one fifth the pace of the 1990s, the slowest rate in the post-World War II era. GDP in those years grew at half the rate of the 1990s. Oh yeah, and the deficit exploded. Fully 10 years after the largest tax cuts in history, the economy had shed 1.1 million jobs. It seems Pence’s ax was put to the root of the American dream itself.
Given the historical and economic record, one has to ask: How can anyone take the GOP seriously, especially when they are playing fast and loose with economic disaster in service to a political philosophy that not even their main icon—Reagan—followed with such monomania?
Decrying the Clinton tax plan in 1993, Boehner recalled the quote: “Those who do not learn from history are doomed to repeat it.” He went on, “It very appropriately applies to Congress today.” That’s one piece of rhetoric Boehner really should recycle. And learn from.
By: Robert Schlesinger, U. S. News and World Report, July 13, 2011
Ideology Trumps Economics: Republicans’ Refusal To Raise Revenues Is Threatening The Economy With A Chaotic Default
There is a huge gap in logic at the heart of the Republican intransigence on a debt-ceiling deal, and President Obama helped to illuminate it on Monday.
The party claims, as an article of faith, if not evidence, that the government’s growing debt is the reason for persistent unemployment and economic stagnation. And yet Republicans are spurning the president’s compromise offers to reduce that debt by trillions over the next decade because he is sensibly insisting that any deal include some increase in tax revenue.
“Where are they?” Mr. Obama asked at his news conference. “I mean, this is what they claim would be the single biggest boost to business certainty and confidence. So what’s the holdup?”
The holdup, of course, is that Republicans are far more committed to the ideological goals of cutting government and taxes than they are committed to cutting the deficit. They rejected several compromise offers by the White House, even though any revenue increases would be far outweighed by spending cuts.
Republican rejectionism was on clear display Saturday night when John Boehner, the House speaker, was forced to abandon a plan he and the president had discussed to reduce the deficit by $4 trillion over 10 years.
The plan would have gone much too far in cutting discretionary spending and entitlements, taking too much money from the economy at a time when it desperately needs government investment. But it would have been better than the slashing and burning the Republicans have been demanding because it would have raised from $700 billion to $1 trillion in additional revenue beginning in 2013 by ending tax breaks and deductions for corporations and the rich, or by ending the Bush tax cuts for families making $250,000 or more.
The House Republican leader, Eric Cantor, insisted to Mr. Boehner that his members, shackled to antitax pledges, could not accept it, or anything similar. Now negotiators are trying to reach agreement on a deal to lower the deficit by $2 trillion or so over a decade. But the consequences for the economy and Americans’ lives would be just as disastrous if all of those “savings” come out of essential government programs, with no additional revenue.
Mr. Boehner’s refusal to push back against his party’s ideologues is only feeding their worst impulses. Many House Republicans have gone even further than Mr. Cantor and have rejected any deal that raises the debt ceiling, whether it contains revenue increases or not.
Representative Michele Bachmann and Reince Priebus, the Republican national chairman, airily and irresponsibly insist that the government will find some other way to pay its bills. That’s dangerous nonsense. And as the president forcefully noted, a default could propel interest rates skyward, throw millions more Americans out of work, and create another recession.
It was good to see Mr. Obama challenging the Republicans’ illogic and pushing them to make a deal before it’s too late. But we fear the sort of deal he is willing to consider, based overwhelmingly on spending cuts, could still consign the country to more years of economic stagnation.
The president spoke about the need to create an infrastructure bank, to maintain unemployment benefits, and to protect the elderly and the poor. But keeping those goals will be nearly impossible with a debt deal that cuts three times as much spending as it raises revenue. A balanced plan, like the one Senator Kent Conrad is circulating among Senate Democrats, would cut spending and raise revenue equally, and would make it possible to pay for programs that kick-start the economy.
Americans need to hear the hard economic truth that there is no way to both cut the deficit and revive the economy without finding additional sources of revenue. As the president himself said on Monday, “If not now, when?”
By: Editorial, The New York Times, July 11, 2011
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.”
…
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.
…
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
GOP Passes Up Generational Conservative Victory In Order To Protect The Wealthy
Oh, the irony.
After generations of conservative dogma based solidly in the belief that fundamental changes to America’s entitlement programs are essential to the economic survival and betterment of the nation, that goal is now, finally, within the reach of the true believers.
Yet, remarkably, this dramatic change in national direction is being permitted to slip right through conservative fingers by the very people whom those ensconced on the right should be counting upon to bring home this great philosophical victory.
The fulfillment of the conservative dream is not vanishing from sight because Nancy Pelosi and the forces of progressivism are prepared to defend entitlements to the death. Nor is it happening because the President of the United States has counted up the votes and decided that messing with entitlements will cost him re-election.
It is not even the result of “bleeding hearts” like me rising nobly in defense of the needy and downtrodden.
Significant entitlement reform, long the goal of the fathers of modern day conservatism, is being flushed down the drain by the very Republican Party that has long battled to bring that goal to reality.
Somewhere in Connecticut, William F. Buckley Jr. is turning over in his grave.
On Saturday, Speaker of the House John Boehner announced that the ‘grand bargain’ – rumored to bring $4 trillion in debt reduction over the next ten years through a mixture of entitlement reform, defense cuts and a measure of revenue increases resulting from cleaning up the tax code to get rid of some of the corporate entitlement programs that result in lower taxes and higher subsidies – is now off the table.
Apparently, Boehner could not sell the GOP Congressional Caucus on a deal that involved anything in the way of revenue increases- not even in exchange for accomplishing reforms for which his party has fought since the days of FDR and his “New Deal”.
True conservatives should not blame Boehner for this heresy as it appears that he is no happier with the position he is being forced to take than the President is with his proposal being rejected by House Republicans who don’t grasp the whole compromise thing.
What Boehner likely understands – better than those who he is supposed to be leading – is that the GOP is permitting the fundamental change, long at the heart of the conservative cause, to vanish into thin air and that it is happening in the name of protecting corporate subsidies that are the very antitheses of a free market economy – another of the inviolate tenets of conservative policy.
Subsidies that provide government incentives to industry are as anti-free market as government subsidies and controls that conservatives argue have skewed the costs of health care in America and led to our current crisis.
According to American conservative scripture, a truly free market requires that players compete on level ground – not with the edge that comes from government handouts and special tax breaks, whether they be for the benefit of a corporation or an individual.
Thus, the GOP is rejecting the opportunity to accomplish a landmark, philosophical milestone by protecting a policy that is, in and of itself, a violation of that same conservative philosophy.
Is the irony of this enough to make even the most ardent conservative believer question what in the world is going on here?
It certainly should be.
Could the explanation for this odd behavior be that the Congressional Republican Caucus has decided to turn its back on what is supposed to be their most fundamental beliefs because their constituents are demanding that they do so?
Apparently not.
According to the Christian Science Monitor, the GOP Caucus does not appear to have any interest whatsoever in listening to its base.
“Two-thirds (67 percent) approve of making more of high earners’ income subject to Social Security tax, and nearly as many approve of raising taxes on incomes of over $250,000 (66 percent), reducing military commitments overseas (65 percent) and limiting tax deductions for large corporations (62 percent),” the Pew Research Center reported last month.
“Notably,” Pew found, “Republicans are as likely as Democrats to approve of limiting corporate tax deductions.”
Still, any kind of tax increases – whether it be a greater tax bite on the wealthy or on corporations seen as “job creators” – is off the table as far as large numbers of Republican House members are concerned. Via The Christian Science Monitor
So, the GOP rejection of the debt deal is neither based in the free market philosophy nor the fundamental belief in entitlement reform. It is also not based on meeting their obligations to their constituents.
So, what is driving their rather remarkable position?
It must be jobs and the economy.
Surely, the Republicans in Congress are convinced that removing tax subsidies to the oil industry and cleaning up the tax code to get rid of corporate welfare that is no longer of any discernable value to the nation will make what is already a very bad jobs situation even worse.
Except that it turns out that you have to search long and wide to find an economist who supports this notion.
The other argument that advocates of tax cuts for the rich make is that many small-business owners would be see their taxes go up and thus would be discouraged from hiring workers. The facts do not support this. “Only 3 percent of small-business owners are in the top bracket,” notes Roberton Williams, a senior fellow with the Tax Policy Center, which is sponsored by the Brookings Institution and the Urban Institute. And, he adds, “They are not all what we think of as job-creating small businesses. A lot of them are hedge-fund managers and law-firm partners.” So other than perhaps a few restaurateurs on Manhattan’s Upper East Side, the workforce is unlikely to be affected. Via Newsweek
So, while Eric Cantor continues to try and sell his base on this argument, it’s pretty hard to find anyone who knows anything about economics who actually is buying the pitch.
If it’s not philosophical dogma or fulfilling their obligation to those who elected them and it’s not the economy and/or jobs, what exactly is their problem?
I don’t know about you, but I can only think of one other explanation – fealty to the wealthy corporations and wealthy individuals who keep your Republican leadership rolling in the campaign cash so they can remain in their powerful jobs.
Now, if you believe this is a good enough reason to risk the financial stability of the nation – and possibly the world – then it’s all good.
Personally, I’m a little concerned.
I fear we are witnessing one of the most perverse and dangerous games our leaders have ever embarked upon. I’m stunned by the sheer audacity of these elected officials so ready to play chicken with the financial lives of so many simply to benefit a very few.
But what really amazes are the millions of middle class Americans who continue to believe that these officials are somehow acting in their best interest.
As curious as I am to see what will ultimately come of this game, my curiosity is far more piqued by the possibility that these middle class Americans might finally understand that the Republicans they sent to Congress work for the big corporations and care little for their needs and problems.
Should that light bulb (incandescent or otherwise) finally turn on, these folks should be assured that nobody is expecting them to run into the waiting arms of the Democratic Party. They can still quietly send their Congressional representatives a message indicating that they would prefer not to be abandoned so that Exxon might keep the government checks flowing in while maintaining their standing as upright, committed conservatives.
If these folks could – just this once – grasp what is being done in their name and communicate their rejection of the behavior of their leaders, the rest of us would genuinely appreciate it.
A true conservative should be as disgusted with what the Congressional Republican Caucus is doing as the rest of us and probably a great deal more so.
By: Rick Ungar, The Policy Page, Forbes, July 10, 2011
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