Staring at the (Debt) Ceiling

"... [I]it's as if you put charges on your credit card, then decide later whether you're going to pay for them," The Atlantic's James Fallows told NPR's Guy Raz yesterday.

This is money past Congresses and this Congress, too, have already voted to spend....

... [R]atings agencies have already said that even though, of course, people know that the U.S. government is not going to finally renege on its obligations, the interest rate that the U.S. has to pay for its Treasury notes and other debt will probably go up if there is this default because it's always been defined as the most riskless investment in the world.

And if and when that happens, essentially interest rates for everything else - for mortgages, for city governments, for state governments - they will all go up, too, because almost all of them are benchmarked to the supposedly riskless Treasury rate.

The Return of Voodoo Economics

Readers old enough to remember will recall that 'voodoo economics' was the label applied to Ronald Reagan's economic policies by George H.W. Bush in 1980. The policies were based on the aptly named "Laffer curve," which purported to show that high tax rates reduce tax revenue by lowering the incentive to produce. (The model also predicts that tax rates below an optimal level for a given economy will reduce tax revenue; today's Republicans conveniently ignore this provision.)

Despite being embraced by mainstream commentators like David Brooks, who called it a "moment of truth," Rep. Paul Ryan's (R-WI) budget proposal is a return to 'voodoo economics.'

"Ludicrous and Cruel" says Paul Krugman in his recent NY Times column.

Republicans Bring Cloud Cuckoo Land to the House

Eugene Robinson has an excellent summary of how out of touch with the public Republican attempts to repeal the health care bill are.

A recent AP poll found that 62% of those surveyed either wanted the law left as it is, or wanted it to do more to change the health care system. A Washington Post poll found that only 18% of respondents wanted the law repealed; in the AP poll it was 26%.

As Robinson puts it, "what House Republicans just voted to do may be the will of the Tea Party, but it's not 'the will of the people.'"

They're Baaack...

Bob Herbert writes in Monday's NY Times

The fundamental mission of the G.O.P. is to shovel ever more money to those who are already rich. That’s why you got all that disgracefully phony rhetoric from Republicans about attacking budget deficits and embracing austerity while at the same time they were fighting like mad people to pile up the better part of a trillion dollars in new debt by extending the Bush tax cuts.

Tom Delay: Poster Boy for the New Republican Party

[In light of Tom Delay's November 24, 2010 conviction on money-laundering and conspiracy charges, The Dubya Report invites readers to review our profile of the one-time Republican leader, originally published April 20, 2005.]

Updated April 4, 2006

At a weekly Republican policy lunch in the Senate Mansfield Room in early April, Tom DeLay rose to declare to his colleagues that he was the victim of a Democratic conspiracy, blaming financier George Soros and the grass-roots group for his woes. The GOP agenda was in danger, DeLay reportedly said, because Democrats funded by Soros were targeting him in attempt to keep the party from making progress on its initiatives.

A letter to Houston-area voters blamed a "syndicate" of Democrats, advocacy groups and a "legion of Democrat-friendly press."

In recent days, however, DeLay has come under criticism from within his own party, and in the editorial pages of journals from across the political spectrum, including the Wall Street Journal.

Chris Shays, a moderate Republican Congressman from Connecticut was the first Republican to call for DeLay to step down. "I think he's hurting the Congress," Shays said. "I think he's hurting the Republican majority and I think he's hurting individual Republicans who are up for re-election...."

"If he chose to resign as majority leader until these matters are resolved, that's probably not the worst idea," Colorado Representative Tom Tancredo, a conservative, told the Denver Post.
"I don't think we should try to oust him," Tancredo said, but stepping aside "may be a productive move."

Sen. Rick Santorum, a leading Republican conservative, said on ABC News "This Week" that he thought DeLay needed to "lay out what he did and why he did it." Asked about reports that DeLay's family members were on PAC payrolls, and that he had taken trips financed by lobbyists, Santorum said " "If those things were not out there, obviously they wouldn't be raising them.... And so there are issues that he has to deal with personally."

On April 12, Newt Gingrich told CBS's Gloria Borger, " the burden is on [DeLay] to prove" his innocence," adding "I think the jury's out." "DeLay's problem isn't with the Democrats; DeLay's problem is with the country," Gingrich said. "And so DeLay has a challenge: to lay out a case that the country comes to believe, that the country decides is legitimate...."

The White House itself seemed to vacillate. On Monday April 11, White House spokesman Scot McClellan described DeLay and Bush as friends. "Majority Leader DeLay is someone the president considers a friend," he said. "The president looks forward to continuing to work closely with the majority leader to get things done on behalf of the American people." By midweek, however, McClellan appeared to be trying to distance Bush from DeLay, saying they were not close friends. "I think there are different levels of friendship with anybody," he said.

Peter Dreier's Post-election Analysis

Writing on the Chicago Reader blog, Michael Miner posts an analysis of the midterm election by Peter Dreier of Occidental College.

Dreier's key points:

  • The US Chamber of Commerce has pledged to obstruct any attempts at government regulation. ANY. Presumably that includes consumer protection, the kind of irresponsible financial risk-taking that nearly led to a banking system meltdown, food safety, etc. Moreover, the Chamber has played a key role in funneling money to TV ads attacking Democrats, aided by the Roberts' court "Citizens United" ruling making it possible for corporations to donate anonymously to political campaigns.
  • In this election, Republicans expressed their frustrations by voting, while Democrats expressed their frustrations by not voting. As Dreier says, "Another word for what Democrats did is: 'self-defeating.'"
  • Dreier urges Obama and Democrats to publicize their legislative successes, communicate clearly that the Republicans are the party more closely allied with Wall Street and corporate America, and take a lesson from FDR in confronting the forces of hate arrayed against them. "Never before have these forces been so united against one candidate as they stand today," FDR declared during his re-election campaign. "They are unanimous in their hate for me — and I welcome their hatred." FDR, Dreier notes, won in a landslide.

Read the full post.

How to End the Great Recession

Commenting on Robert Reich's September 2 NY Times op-ed piece How to End the Great Recession SEC policy adviser Rick Bookstaber calls it "a reasoned argument for income redistribution based not on some notion of fairness, but on economic results."

Rather than the government priming the pump through fiscal measures, which is obviously a short-term solution, he argues that we need to change the structure of the system to shift income toward those who will consume.

Narcisstic Nation, Performer Politicians

In The Benjamin Button Election, published in the November 8 issue of New York magazine, Jennifer Senior asks and answers the question "Why Do American Voters Think Like Small Children".

Leftists who harbored unrealistic expecations that Obama could magically fix everything wrong with the world, she argues, have much in common psychologically with rightists who blame him for the same.

When people become more powerless, they become more distrustful of those who have power, and that, in turn, disempowers them more.


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