I will take a break from my ‘solutions’ series and interject an article about the current politics of the nation and the game of Chicken that quite frankly, my Republican friends are playing. Yes, you heard me right, I am siding with the Democrats on this one, but just in political substance, not policy.
You see my fellow citizens, the Republicans are giving a false choice to you. They say that their ‘compromise’ is the raising of the debt ceiling at all. They will raise the debt ceiling and the Democrats have to enact entitlement program cuts. Taxes per Grover Norquist are OFF THE TABLE for the Republicans. That is a red-herring fallacy.
Not raising the debt ceiling is not an option. It has to be done because there isn’t any time left to make a problem that would truly stem the tide of rising costs. They haven’t done the legwork to truly figure out how to pare the federal government down without ripping the country apart since its presence is felt everywhere. I agree it needs to be done, but you don’t cut out cancer with a broadsword, you use a laser scalpel. Since the Republicans have frittered away the MONTHS of time that they had where they could have made such a plan, they now posit the untenable position of simply targeting entitlement programs and not the huge amount of fraud, waste, abuse, cronyism, and special interests that actually make government so large, expensive, and inefficient.
Not raising the debt ceiling is also not an option because of the completely unnecessary financial and economic crisis that would descend upon this country. We saw it before in 2008 – the markets are all a confidence game. You lose confidence and the bond-holders go running. Even if it is voluntary, the costs to further debts in the future due to rising interest rates would be long-term and real. It would cost more to borrow money. It will even sit worse with the electorate if the US pays its debt holders first (China) and doesn’t send Grandma her Social Security check. For political reasons of voter wrath, there is no way that a politician thinks that is a good way to get re-elected.
Scarily, it is the President that is actually showing leadership on this one. He recognizes what compromise is and if people are serious about curbing national debt, then they’ll take the current opportunity to take a real chunk out of future spending. he honestly proposed touching liberal third rail issues and give on them and expected the Republicans to do the same. I believe he is generally misguided in what he thinks is best for the country, but he looks like a centrist who appeals to centrist nature of the country more than the Republicans who truly believe are posturing at this point. I honestly do not believe the Republicans are sincere on wanting to really make the best effort possible of curbing debt because we have dug a hole that is way too deep for ourselves as a nation to not have tax increases and even reasonably expect us to get out of this mess. It is a combination of loyalty to Grover Norquist and his pledge for fear of what a negative endorsement will do, and it is also due to the fact that a failure on the President’s part is good for them. Maybe so, but it’s certainly not good for the country – just like a default scare or wasting a bunch of time on a scare good for the country. There are plenty of problems to solve – unemployment, energy, trade deficits, etc and this is basically all Washington has done for months. Absolutely pathetic.
Also, don’t tell me that raising taxes and closing loopholes on the riches of Americans and corporations will hinder growth. Major companies are reaping record profits and are sitting on the cash. They are not expanding their businesses or re-investing it. They claim uncertainty and weakness in the markets…but what comes first, the chicken or the egg? People won’t feel good about the economy or spend money if they continue to see layoffs. BUT, if a company took some of the those record profits and reinvested into a local economy and opened up a new division… The same argument can be said for the richest of Americans as well. They as a percentage of income pay less than the average American. There is a point where their wealth doesn’t efficiently go back into the economy. For every yacht that a fortune 500 company CEO owns, how much could the livable wage be raised for the rank and file hourly workers making $10 an hour whose empire is based upon their work. You know that $10 an hour is not a livable wage, so those people have to get a second (or third job) sometimes. Undue taxation for wealth-creators is un-American, but also is not paying your fair share back to a system that you have greatly benefited from while also semi-victimizing the same people who enable your empire. I’m the furthest from a socialist that you’ll find, but this is a country based upon freedom and having to work 80+ hours a week just to scrape by at $10 an hour is just a form of economic bondage and is also un-American. There has to be a balance and asking the most vulnerable in our society to have cuts to the programs that help support them while not asking the richest of institutions and individuals to give up a dime is simply wrong on top of bad policy and economic fantasy.
Thus, I propose finding that line where a business is no longer small and an individual ‘has more money than they know what to do with’. At that point and higher, that is where you raise taxes. You are getting the most economic bang for the buck as you are not hindering the real engines of economic growth – small business, but you are also not taking bread out of the mouths of people who actually put the money back into the economy versus just pissing it away of opulent, foreign-made luxury items.
So, with all that said, you can see that I am yet again proud of my libertarian stance. Its shit like this that makes me glad I am not a Republican. I disagree with Democrats philosophically in most ways, but they make the sound and correct argument in this case.
Lets just say the US does default and the government has to pick and choose what obligations it pays. How will it look to the voters (especially the most active block – seniors) when we dutifully make our interest payments to the Chinese, but Grandma’s social security check doesn’t go out in time? The Republicans would get blamed and they’d get washed out in the tide of the 2012 election, Obama would get re-elected, and then the country would be set up for even worse things to come with an emboldened and empowered Democratic legislative and executive branch.
I weep for my country and the lack of leadership that we have. I’d be kicking somebody’s ass if I was the President. It would be time to pull out the weapons-grade, Ross Perot style charts and insultingly lucid Jon Stewart interviews that show all the holes and fallacies in the opponent’s argument.