[C38] America Held Hostage

Larry Malmberg Larrypi at roadrunner.com
Wed Aug 31 16:50:45 EDT 2011


Yes, please limit to boating issues.  On another note though I was in Nevada
when Harry Reid first ran for US Senate, I saw a debate with him on TV where
he supported the "Nuclear Suppository" for Nevada.  Kind of brings a tear to
your eyes, right????
 





Best regards,

Larry Malmberg
Team Hassle


 

  _____  

From: listserve-bounces at catalina38.org
[mailto:listserve-bounces at catalina38.org] On Behalf Of Mark Lewis
Sent: Wednesday, August 31, 2011 1:22 PM
To: 'Catalina 38 Listserve'
Subject: Re: [C38] America Held Hostage



Love it! :)

 

From: listserve-bounces at catalina38.org
[mailto:listserve-bounces at catalina38.org] On Behalf Of Steve Smolinske
Sent: Monday, May 16, 2011 4:39 PM
To: Catalina 38 Listserve
Subject: Re: [C38] America Held Hostage

 

Can we please limit political discussion on the board to only those that are
favorable to the Republican view point?

 

From: listserve-bounces at catalina38.org
[mailto:listserve-bounces at catalina38.org] On Behalf Of Bill Haynes
Sent: Monday, May 16, 2011 1:32 PM
To: Catalina 38 Listserve
Subject: Re: [C38] America Held Hostage

 

Paul, you need to read this column for what Paul Krugman says here is the
honest to God truth.

 

Bill

 

 

May 15, 2011

New York Times

America Held Hostage

By PAUL KRUGMAN

Six months ago President Obama faced a hostage situation. Republicans
threatened to block an extension of middle-class tax cuts unless Mr. Obama
gave in and extended tax cuts for the rich too. And the president
essentially folded, giving the G.O.P. everything it wanted.

Now, predictably, the hostage-takers are back: blackmail worked well last
December, so why not try it again? This time House Republicans say they will
refuse to raise the debt ceiling - a step that could inflict major economic
damage - unless Mr. Obama agrees to large spending cuts, even as they rule
out any tax increase whatsoever. And the question becomes what, if anything,
will get the president to say no.

The debt ceiling itself is a strange feature of U.S. law: since Congress
must vote to authorize spending and choose tax rates, why have a second vote
on whether to allow the borrowing that these spending and taxation policies
imply? In practice, however, legislators have historically been willing to
raise the debt ceiling as necessary, so this quirk in our system hasn't
mattered very much - until now.

What has changed? The answer is the radicalization of the Republican Party.
Normally, a party controlling neither the White House nor the Senate would
acknowledge that it isn't in a position to impose its agenda on the nation.
But the modern G.O.P. doesn't believe in following normal rules.

So what will happen if the ceiling isn't raised? It has become fashionable
on the right to assert that it would be no big deal. On Saturday the
editorial page of The Wall Street Journal ridiculed those worried about the
consequences of hitting the ceiling as the "Armageddon lobby."

It's hard to know whether the "what, us worry?" types believe what they're
saying, or whether they're just staking out a bargaining position. But in
any case, they're almost surely wrong: seriously bad consequences will
follow if the debt ceiling isn't raised.

For if we hit the debt ceiling, the government will be forced to stop paying
roughly a third of its bills, because that's the share of spending currently
financed by borrowing. So will it stop sending out Social Security checks?
Will it stop paying doctors and hospitals that treat Medicare patients? Will
it stop paying the contractors supplying fuel and munitions to our military?
Or will it stop paying interest on the debt?

Don't say "none of the above." As I've written before, the federal
government is basically an insurance company with an army, so I've just
described all the major components of federal spending. At least one, and
probably several, of these components will face payment stoppages if federal
borrowing is cut off.

And what would such payment stops do to the economy? Nothing good. Consumer
spending would probably crash, as nervous seniors started wondering how to
pay for rent and food. Businesses that depend on government purchases would
slash payrolls and cancel investments.

Furthermore, markets might well panic, especially if interest payments are
missed. And the consequences of undermining faith in U.S. debt might be
especially severe because that debt plays a crucial role in many financial
transactions.

So hitting the debt ceiling would be a very bad thing. Unfortunately, it may
be unavoidable.

Why? Because this is a hostage situation. If the president and his allies
operate on the principle that failure to raise the debt ceiling is an
unthinkable outcome, to be avoided at all cost, then they have ceded all
power to those willing to bring that outcome about. In effect, they will
have ripped up the Constitution and given control over America's government
to a party that only controls one house of Congress, but claims to be
willing to bring down the economy unless it gets what it wants.

Now, there are good reasons to believe that the G.O.P. isn't nearly as
willing to burn the house down as it claims. Business interests have made it
clear that they're horrified at the prospect of hitting the debt ceiling.
Even the virulently anti-Obama U.S. Chamber of Commerce has urged Congress
to raise the ceiling "as expeditiously as possible." And a confrontation
over spending would only highlight the fact that Republicans won big last
year largely by promising to protect Medicare, then promptly voted to
dismantle the program.

But the president can't call the extortionists' bluff unless he's willing to
confront them, and accept the associated risks.

According to Harry Reid, the Senate majority leader, Mr. Obama has told
Democrats not to draw any "line in the sand" in debt negotiations. Well,
count me among those who find this strategy completely baffling. At some
point - and sooner rather than later - the president has to draw a line.
Otherwise, he might as well move out of the White House, and hand the keys
over to the Tea Party.

  _____  

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