With the debt ceiling legislation hijacked by a previously unnecessary and now contingent balanced budget debate, each party accuses the other of misguided direction, political shenanigans, and outright lies. The end result is that the government body itself stubbornly holds course toward what looks to me like absolute economic catastrophe and assured mutual political destruction. What would this lead to but further fragmentation of the nation, bifurcation of the classes, intensified hatred of Washington, and the demise of many standing politicians? In other words, chaos rules at the controls of our country, and we have worse to look forward to.
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Assured Mutual Political Destruction
Thanks to the service of Gallup, we know that only about 18% of Americans approved of their government (Congress) in early July, and you can bet your swiftly depreciating dollar that less of our countrymen care for Congress today. President Obama’s approval rating is at its all-time low of 40%, and so Washington seems engaged in a war of attrition. It’s like the DC war cry is “let’s see who survives the lynching and go from there.”
The Democratic Party initially sought compromise which would have included revenue increase through the restoration of upper echelon tax rates that stood under President Bush. As the deadline moved closer, Democratic Party demands backed out of “revenues” and into deep cuts into Republican taboo topics, including the defense budget. Let’s not even talk about the subsidies for the oil companies, lest I throw up. For separate reasons, neither idea has been digestible by the GOP.
With regard to the tax issue, it bothers me that through the power of PR this temporary tax cut put in place by the Bush Administration has morphed into a proposed “Democratic tax hike on small businesses.” You know, there are ways around the issue so that small businessmen bear no burden while the wealthiest among us pay to play in the rich American economic ballpark they have thrived in. We’re not talking about raising taxes, but restoring them to pre-financial crisis levels. These were temporary tax breaks to begin with, which was widely understood by all, so what exactly is the problem now? This is a burden the rich should be willing to bear now (Warren Buffet is), with the economy at risk. Business concepts work in America because we have consumers, but we may soon have conspirators in their stead. You know, baseball is a lot less fun to play in the desert than in a lush green ballpark. Consider that please before you turn the nation into a desert… You know who likes the desert? The snake thrives in the dry hole below the barren ground.
Democrats have stubbornly held onto liberal social treasures, and I’m glad about some of that, because I’ve seen days without healthcare. That is something Canadians never knew, and yet in the “greatest nation on earth,” many Americans have; that’s because they were too poor to afford health insurance but surviving just well enough to be disqualified for Medicaid. Living among these people has allowed me a perspective too many Republicans can’t relate to. Keep in mind that other than being a true blue American, I don’t know what I am anymore politically speaking, so I call myself independent when it comes to party play. If I were ever to rejoin the Republican Party, I would be a reformist (like a Reagan), and if I hitched up with the Democrats, I would be a special old fashioned sort (like JFK) with a lean toward center. What I’m not is certain, and that’s a classic politician; somehow I feel like a lot of you fit into the same description these days. Here’s to Americans and to taking back the power to the people!
There’s an understanding now that some tweaking (or is it gut wrenching) to the entitlement programs is probably necessary to more swiftly bring the budget into balance, and to do so in a lasting manner. Each party is of course wary of disturbing the growing elderly base of the nation, and so the wording around these programs is cunning. They’ll use the words “entitlement programs,” rather than the commonly understood by grandma, “Social Security” or “Medicare.” Each party seeks the high ground, and reassures our seniors that they are not going to pay for our balanced budget. Then they blame the other for being anti-seniors. Let’s face it, it’s the poorer elderly who rely on Social Security, so it’s an issue the Democrats defend and the Republicans are more willing to target for cuts. But it’s probably true that there will be no America as we know it without at least some tweaking that seniors might hardly notice in their daily lifestyle. You know, maybe the retirement age can hack a small increase, or perhaps a minor medication cost hike could be managed? It seems the Republicans sought a bit more under Congressman Ryan’s plan, but political poison has now quarantined it. In fact, the Democrats very likely effectively took out their greatest potential threat in Ryan, the GOP’s young and rising prospect for president, because of his bold but extended and vulnerable reaching.
With regard to the debt ceiling, it would seem that some Americans in the Republican Party are buying into the ignorant and dangerously negligent voices of Congressmen like Jim DeMint and those freshmen Tea Party members elected on frenzy. It has to be either negligence or purely evil intention, one or the other, holding up the debt ceiling legislation; because the result that threatens is a paradigm shift in the effective economics of American capitalism. What is being undermined is the risk-free asset, upon which all value is based. Picture if you will an upside-down pyramid as the global economy, at the point where it touches the earth are U.S. treasury bills, the risk-free asset. It is baked into every security valuation, every interest rate, the bar every corporation has to create economic value over. If we raise that bar, we severely harm all financial securities, the investors/retirees/consumers who own them, the companies at play, and the jobs they manage. That’s not even accounting for the higher cost of borrowing for consumers directly, through the mortgages they finance, the credit cards they drown under, etc.
This nonsense about constitutional amendment to require the federal government to balance its budget the same way the states do may have some merit. However, it should not be tied to the passage of the debt ceiling nor the budget cutting being incorporated with that now. Tea Party Republican members were elected on a promise, that they would not raise taxes but would limit government spending. I say to you, your word is valuable, but not when it stands between right and wrong. It is wrong to drive our economy into a firestorm for the sake of stubbornness PERIOD. The American people are in agreement on this, and those who are not must not comprehend how dramatically life would change as a result of the downgrading of American credit.
I stand much closer to the Democrats on this issue while maintaining my independence, because I cannot make sense of the new found religion of the Republican Party here. We’re talking about the party that took President Clinton’s balanced budget and flushed it down the toilet. Now suddenly, the blame goes to President Obama? Who do you think you are fooling with these lies? Perhaps it’s the majority, but it is not the one who matters.
In the case of the balanced budget and a potential rating agency downgrade, this was a topic that was taboo and not even on the radar screen not too long ago. It was literally brought into the realm of possibility by the conversation of politicians. Now Standard & Poor’s has been so emboldened as to warn of a downgrade even in the event of a debt ceiling hike, if it is in the absence of meaningful budget balancing measures. Politicians brought this issue to the tip of the tongue of every American, and created a political power-point for a group of agencies that have yet to suffer penalty for their significant role in helping to create the MBS and financial crisis to begin with, at least in my view and the view of several Congressional panel members who held inquiry of them when the matter was fresh.
You want to talk about the constitution? Let’s talk about the constitution! Under the 14th Amendment to the Constitution in Section 4, Congress is charged with the responsibility to honor debts incurred by law. And it reads, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
There’s a war being waged for political opinion, as the influential seek to play on the financial illiteracy of the nation for the sake of constituent support, personal gain and ignorance. The argument is one that employs judgments of negligence, as each party blames the other (as usual), and while doing so puts the very foundation of American finance at risk of undermining. What politicians should consider is the certain result of putting party goals over national interests, and that is in this case the demise of the Republic.
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