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If Only Sen Snowe’s Actions Met Her Misplaced Rhetoric

Treasury Secretary Timothy Geithner talked to the Senate Small Business Committee, urging its members to approve jobs measures proposed by the White House. Sen. Olympia Snowe (R-Maine), ostensibly Congress’ most moderate Republican and the member most likely to listen to reason, went on quite a tirade.

“Your primary mission is to craft the economic policy of this country, and at this point, it simply isn’t working,” she told Geithner. “Something’s gone terribly wrong, and what I hear over and over again is that there is no tempo, a tempo of urgency.”

“I don’t know who you’re talking to…but you need to talk to the average person,” she said later in a testy back and forth with Geithner. “Rome is burning.”

I’m delighted Snowe is pretending to care about the economy. I’m also delighted she thinks she’s in touch with what “average” people want, and would like to see policymakers to act with “urgency.”

But if Olympia Snowe thinks her actions are consistent with her rhetoric, she’s sadly mistaken.

We are, after all, talking about the alleged moderate from Maine who, just last week, voted with right-wing senators to refuse a debate on the popular and effective American Jobs Act. She’s the same senator who’s refused to endorse any of the provisions in the bill, no matter how much they’d help. What was that she was saying about “urgency”?

Snowe thinks Geithner is responsible for crafting the nation’s economic policy? Here’s a radical idea: maybe if Snowe could bring herself to stop filibustering worthwhile economic legislation, Geithner might have more success.

“Rome is burning”? And who, exactly, does Snowe believe is responsible? The party with good economic ideas that can’t overcome Republican obstructionism, or the party engaged in the obstructionist tactics, offering ideas that would make the economy worse, and by some accounts, holding back the nation deliberately?

Snowe seems to believe the status quo isn’t working. On this, she’s correct. But it’s not working because Republicans are getting their way.

In what universe does it make sense for Snowe to blame Geithner? Snowe and Republicans got the tax cuts they demanded; Snowe and Republicans saw the stimulus spending evaporate, just as they wanted; Snowe and Republicans are watching the public sector lay off hundreds of thousands of workers, just as GOP policy dictates; and Snowe and Republicans have forced the White House to accept massive spending cuts, which takes money out of the economy on purpose.

And now she’s complaining? Why, because her party is getting what it wants and she doesn’t like the results?

Arguably one of the most dramatic Democratic dilemmas of 2011 and 2012 is overcoming the realization that Republicans are getting their way on economic policy and then denying any responsibility for the results. Indeed, it’s a rather extraordinary con: GOP officials see much of their agenda implemented, then see it fail, and then blame Obama when their policies don’t work.

The nation is reading from the Republicans’ economic playbook, and thanks in part to Snowe’s filibusters, that’s not likely to change anytime soon. When the GOP agenda fails, Republicans should be prepared to accept responsibility for the consequences, instead of pretending they’re not getting their way.

By: Steve Benen, Washington Monthly Political Animal, October 18, 2011

October 19, 2011 Posted by | Class Warfare, Congress, Conservatives, Economic Recovery, GOP, Income Gap, Middle Class, Senate, Taxes | , , , , , , , , | Leave a comment

First Secession, Now Contempt: An Ugly Start To Rick Perry’s Campaign

“If This guy prints more money between now and the election, I dunno what y’all would do to him in Iowa, but we would treat him pretty ugly down in Texas.”

Thus spoke Republican Gov. Rick Perry on Monday, referring to Ben Bernanke, chairman of the Federal Reserve Board. You might chalk the remark up to a weak attempt at humor —if you watch the video, you’ll hear a few nervous laughs from the small crowd — but then Mr. Perry went on in an even less appropriate vein.

“Printing more money to play politics at this particular time in American history is almost treacherous, or treasonous, in my opinion,” Mr. Perry said.

“To play politics”? Mr. Bernanke was appointed chairman of the Fed by a Republican president, George W. Bush. He was reappointed by a Democratic president, Barack Obama, in an acknowledgment of how indispensable he had become in a time of crisis. In fall 2008, when global finances threatened to spin out of control, Mr. Bernanke responded with a steeliness that may have saved the country from disaster far worse than the severe downturn it has experienced.

That’s our view; it’s the view, we’d wager, of most economists. Mr. Bernanke’s actions had the support of both Mr. Bush and then-candidate Obama, of Republican Treasury Secretary Henry Paulson and future Democratic Treasury Secretary Timothy F. Geithner. And in the years since, Mr. Bernanke and his team have done as much as the Fed should do to get the economy moving again.

Now, if Mr. Perry disagrees, that’s fine. The actions of the Fed leading up to, during and after the crisis will be studied and critiqued for decades. Maybe Mr. Perry could have done better; we’ll be interested to hear about his economic program in the days to come.

But there has never been a whisper, let alone any evidence, that Mr. Bernanke’s actions have been motivated by anything but patriotism and determination to see the U.S. economy regain its footing. There was never a whisper, let alone any evidence, that the Republican-appointed Fed chairman sought to help Republican candidate John McCain in 2008, and there is no reason to believe he is playing politics now.

If Mr. Perry has evidence to the contrary, he should present it. If not, he should apologize.

But questioning his opponents’ good faith seems to be part of Mr. Perry’s early playbook. He already has disparaged Mr. Obama for not serving in the military, something that Mr. McCain — with far greater claim on the nation’s gratitude for his military service than Mr. Perry has — never stooped to. And when asked whether Mr. Obama loves his country, Mr. Perry responded, “I dunno, you need to ask him. . . . You’re a good reporter, go ask him.”

When we asked the campaign about these remarks, a spokesman e-mailed, “The Governor never said the President does not love his country.” As to his remarks concerning Mr. Bernanke, “The Governor was expressing his frustration with the current economic situation and the out of control spending that persists in Washington.” But frustration does not excuse accusing people of treason if you don’t like their policies.

In the days after the Jan. 8 shooting of Rep. Gabrielle Giffords (D-Ariz.) and 18 others just outside Tucson, there was widespread revulsion at the nastiness of much political rhetoric and widespread commitment to argue about issues without questioning opponents’ motivations or character. Mr. Perry’s presidential campaign, not yet a week old, suggests he didn’t get the message. We hope he begins to make his case in a way that will reflect better on his own character.

By: Editorial Board Opinion, The Washington Post, August 16, 2011

August 17, 2011 Posted by | Conservatives, Democrats, Economic Recovery, Economy, Elections, GOP, Government, Governors, Ideologues, Ideology, Politics, President Obama, Republicans, Right Wing, Teaparty, Voters | , , , , , , , , , , , | Leave a comment

Grave Consequences: Wall Street Tells John Boehner To Back Off The Debt Ceiling

Republicans are growing increasingly concerned about the impact a bruising fight over raising the nation’s $14.29 trillion debt ceiling could have on U.S. financial markets.

House Speaker John Boehner (R-Ohio) has had conversations with top Wall Street executives, asking how close Congress could push to the debt limit deadline without sending interests rates soaring and causing stock prices to go lower, people familiar with the matter said. Boehner spokesman Michael Steel said Tuesday night that he was not aware of any such conversations.

Treasury Secretary Timothy Geithner has warned Congress that without new borrowing authority, the federal government could hit the statutory debt limit by May 16.

Treasury could then implement emergency measures to continuing making interest payments on existing debt until around July 8. After that, the U.S. risks going into default, an unthinkable idea to many economists and market participants who say such an event could drive scores of large banks into failure, send interest rates skyrocketing as foreign investors abandon U.S. securities and crush the already slow-going economic recovery.

Republicans and even some fiscally conservative Democrats want to use the debt limit fight as leverage to wring more significant spending cuts out of the White House. Politicians of all stripes are worried about how independents will react to a vote — or multiple stop-gap votes — to raise the debt ceiling. Many executives on Wall Street believe Washington is playing an enormously dangerous game with what is typically a non-controversial vote.

Sen. Chuck Schumer (D-N.Y.), who leads the Senate Democrats’ messaging efforts, expressed anger that Boehner was searching for leeway on the debt limit.

“The speaker seems to be testing out how far he can venture onto a frozen lake before the ice breaks. He should listen to business leaders who are telling him to watch his step. Messing around with the debt ceiling just to satisfy the tea party will lead to higher interest rates and an economic cataclysm.”

The Wall Street executives say even pushing close to the deadline — or talking about it — could have grave consequences in the marketplace.

“They don’t seem to understand that you can’t put everything back in the box. Once that fear of default is in the markets, it doesn’t just go away. We’ll be paying the price for years in higher rates,” said one executive.

Another said that “anyone interested in ‘testing’ the debt ceiling should understand the U.S. debt traded wider [with a higher yield] than Greek debt roughly five years ago. Then go ask CBO what happens to our deficits/public debt to GDP, if the 10-year [Treasury bond] goes from 3.5 percent to 5.5 percent to 7.5 percent.” The executive said such an increase would result in a downgrade of U.S. debt by ratings agencies and an end to the dollar as the standard global reserve currency.

By: Ben White, Politico, April 13, 2011

April 13, 2011 Posted by | Banks, Congress, Conservatives, Debt Ceiling, Democrats, Economy, Federal Budget, GOP, Independents, Lawmakers, Politics, Republicans, Swing Voters, Voters, Wall Street | , , , , , , , , , , , | Leave a comment

What Actually Happens If The U.S. Hits The Federal Debt Ceiling?

Are you just now recovering from the migraine induced by months of partisan feuding over the 2011 federal budget? Looking forward to a lengthy reprieve before Congress tackles next year’s budget? Sorry, but you’re in for a rude awakening. (And you might want to reach for some aspirin.) Treasury Secretary Tim Geithner warned Congress last week that the United States — currently liable for more than $14 trillion of debt — will collide with the federal debt ceiling around May 16. Once the government hits the current limit of $14.3 trillion it will be legally prohibited from incurring any additional debt; problematic since the U.S. only takes in around 60 cents for each dollar it spends.

Congress has raised the debt ceiling 74 times since 1962. Ten of those increases occurred in the past decade. It’s a routine vote. However, the political calculus has shifted in the newly anointed “age of austerity.” House Speaker John Boehner acknowledged that a failure to raise the ceiling could have calamitous implications. However, congressional Republicans appear unlikely to authorize an increase in the debt limit without significant Democratic concessions, setting up yet another high-noon scenario on Capitol Hill. 

This poses the question: What would happen if the U.S. hit the debt ceiling?

In the immediate aftermath of such an event, the Treasury Department can impose “extraordinary actions” to help pay the bills. Those measures include, “suspending investments in a savings plan for federal workers and pulling Treasury securities out of a trust fund for two federal retirement plans. In such cases, the Treasury must make the funds whole again once the ceiling is raised.” However, such stopgap measures would prove ineffective before long, and the government would have to either authorize an increase in the debt limit or cut $738 billion in federal spending in the span of six months, with severe consequences for the economy. Notwithstanding such a massive curtailing of government spending, the U.S. would default on some of its debt obligations. And the implications are frightening

For one, the government would grind to a halt — cutting off military salaries and retirement benefits, along with Social Security and Medicare payments. Worse still, default would also plunge the U.S. back into recession. Interest rates and borrowing costs would surge, while the dollar would plummet. In a worst case scenario, the markets would go into a death spiral as investors distanced themselves from the U.S.

At the very least, defaulting would call into question the true value of U.S. Treasury bonds — heretofore the gold standard of the bond market. Additionally, such an event would damage the country’s credit rating, and significantly hamper its ability to generate revenue necessary to keep government running. A default on government debt obligations could conspire to undermine the United States’ preeminent position in the global economy. Needless to say, all of this would swiftly end the recovery, as Federal Reserve head Ben Bernanke pointed out.

As for the political repercussions, Nate Silver at the New York Times’ FiveThirtyEight blog argues that the failure to raise the debt ceiling would equate to nothing less than political ruin for virtually every elected federal official.

This as close as you can get in American politics to mutually assured destruction. No matter how Machiavellian your outlook, it’s very hard to make the case that any politician with a significant amount of power would become more powerful in the event of a debt default.That in mind, it seems unlikely that the ceiling won’t be raised. It’s just a matter of when, and how, we get there.

By: Peter Finocchiaro, Salon, April 11, 2011

April 12, 2011 Posted by | Congress, Conservatives, Debt Ceiling, Democrats, Economic Recovery, Economy, Elections, Federal Budget, GOP, Government, Government Shut Down, Ideology, Lawmakers, Middle Class, Politics, Republicans, Right Wing | , , , , , , , , , , , , | Leave a comment

   

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