01 August 2011

The Debt Limit: A Pox on Both Their Houses; No, Make that ALL Their Houses

We have been stupid enough to buy into the Congressional/Presidential Create-a-Crisis bilgewater, and now we are supposed to be pathetically grateful that our ever so wise political leaders have resolved the “Crisis.” That is, they’ve resolved it long enough to delay their next crisis until election time, when a new round of “blame the other guy” will take off in full force.

And yes, we really are dumb enough to be buying into this. We really are taking sides: Oh, the poor president! Oh, thank you Jesus for our conservative sentinels! Blah, blah, blah.

In point of fact, Congress knew this particular “crisis” was coming, the President knew this particular “crisis” was coming and so did everybody else who'd had grade school arithmetic. Rather than dealing with the issues, everybody decided to play a game of political Who-Has-The-Biggest-Weenie. (Yes, I know that’s gender-specific. When people of both genders in government quit playing that game, I’ll quit talking about it. In the meantime, it’s a fair description.) I think it’s fair to assume that the government “Mastercrats” were taking a minute now and then to detect when the Treasury was going to run out of money. It wasn’t rocket science, but they had allegedly neutral public agencies (Office of Management and Budget, Congressional Budget Office) to help them count. And then, suddenly, it was crisis time, and in every instance it was “their” fault. If only “they” would quit being so rat-bastard stubborn, we could all enjoy the second coming of George Washington. Disgusting. Absolutely disgusting.

In order to blame “them” and promote the Glorious Ascendance of “us” in the 2012 elections and after, the Mastercrats played Chicken with United States government obligations and with the very real opinion of the market regarding the quality of government debt instruments. In doing so, the Mastercrats created and depended upon raw fear, in order to gain so-called grassroots support from people who were scared shitless that their military wages or Social Security benefits were not going to be paid. In doing so, the Mastercrats buried the real issues of spending and the debt rating. The latter has as far-reaching economic consequences for the United States as the former. Remember free enterprise? Even if we don’t believe in it, we sure as hell worship it. The debt ratings are standards by the marketplace of how secure treasury bills, bonds and debt instruments are for investors. If they are less secure, the investors are going to want higher returns, meaning we will be paying more interest for government borrowing. More expensive borrowing by the government means more expensive borrowing for everybody else which means fewer houses and cars sold, fewer jobs to manufacture and sell the capital products, more unemployment – but that really doesn’t matter to the Mastercrats as long as their weenies measure longer than the other guys’.

The raising of the debt ceiling is nothing new. Ronald Reagan did it 18 times and on one occasion described to Senate Majority Leader Howard Baker (a Republican) the bad consequences in the event of a default:

Dear Howard:

This letter is to ask for your help and support, and that of your colleaques, in the passage of an increase in the limit to the public debt.

As Secretary Regan has told you, the Treasury's cash balances have reached a dangerously low point. Henceforth, the Treasury Department cannot guarantee that the Federal Government will have sufficient cash on any one day to meet all of its mandated expenses, and thus the United States could be forced to default on it obligations for the first time in its history.

This country now possesses the strongest credit in the world. The full consequences of a default -- or even the serious prospect of default -- by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

I want to thank you for your immediate attention to this urgent problem and for your assistance in passing an extension of the debt ceiling.

Ronald Reagan

Conservative icon Ronald Reagan apparently didn’t see raising the debt ceiling as a big problem for America. His was the administration that continued large deficits, his directed at the military expansion that outspent and eventually destroyed the Soviet Union’s economy. Most people (me included) don’t see that as a bad thing.

More recently, the debt ceiling has been raised repeatedly without the disgusting and dangerous spectacle we’ve been treated to this year. In 1997, 2002, 2003, 2004 and 2006 (Republican presidential years), the debt ceiling was raised with between 193 and 214 Republican votes. In 2007, 2008 (Republican presidential years), 2009 (twice) and 2010 (Democratic presidential years), the debt ceiling was raised again, but only in 2008 did the bill have any Republicans on board.

So let’s not continue with this “it’s the other guys fault” bullshit. Every Mastercrat wants to spend money. Nobody really wants all-out frugality. Everybody wants savings for all spending except spending for them and for those whose asses they must kiss to advance their own personal interests. All of the Mastercrats are speaking piously about their love for America and the tough choices they are making and their bravery, love of God, and sleepless nights. This is showmanship and bad theater. Author Robert A. Heinlein (among others) identified the correct way to get cooperation from most people: Don’t bother looking for their better nature, because most of them don’t have one. Look instead for their self interests, because everybody has those.

I do not exclude the Tea Partiers from the Mastercrat ranks. They were willing - no, they were downright slobbering - to crash the ship rather than compromise AT ALL. They were willing to cut any and all spending that didn’t fit their own worldview without discussing the effect on anyone. Screw ‘em. Moreover, they have the temerity to compare themselves with patriots who actually did something courageous in the Revolution. Screw ‘em, the hypocritical bastards.

A single example among the thousands of economic hypocrisies is the flap last February over the F35 Joint Strike Fighter engine. The F35 is a fifth-generation attack/fighter aircraft which incorporates the latest in stealth technology. It comes in a conventional version, a short takeoff and landing (STOL) version, and a carrier version. The idea was to incorporate the latest technology and save money by using a single basic design with many common components. The engine for the F35 is built by Pratt & Whitney, a longtime builder of jet engines. But wait, some of the Mastercrats screamed: The other manufacturer in the competition to build the engines, Rolls-Royce/General Electric, designed and built their own pretty good engine, and we need to buy that too so we have a spare engine, just in case the Pratt & Whitney doesn’t work. Horsefeathers, said the Department of Defense, we do not need it. But Mastercrats from states where that engine would be built chimed in that it was a necessity and not a waste of money. And so, they reasoned, $450 million in the current fiscal year was a cheap price to pay for a spare engine that nobody needs. Notably, the people pushing for this expenditure came from both parties. Leading the pack was none other than Speaker the House John Boehner, a Republican from Ohio (where the engine would have been built), the same guy who was leading the Jesus-Loves-Thrift money forces in the fake crisis.

The double shuffle and doublespeak associated with the spare engine would’ve shamed the town drunk showing up and insisting that he lead the church choir. Rep. Kevin McCarthy (R – CA) reasoned (?) that a second engine would actually save money because then manufacturers would be in competition. In other words, they could build two for less than the price of one. No kidding, he really said that.

And so, we stumble on, the debt limit will (probably) be extended, most of the promised savings ($1.5 trillion) are as-yet unknown but “to be announced” by November and among the only people not buying this snake oil are the bond rating agencies who are about to stick it to us.

And as long as we participate - as long as we oooh and ahhh the latest Mastercrat toy store in our neighborhoods, as long as we sell out to the Mastercrat buyers, we’re going to get the same turd again and again, just in new and better Christmas wrapping.

It’s not about throwing tea into a harbor. It’s about telling the screamers to Shut the F**k Up so we can apply REASON for a change.

Jeez, are we ever dumb.

Pippa passes.


Jim N. said...

Succinct, clear, and logic difficult to dispute, Roger. Increasingly, I am persuaded that the dynamics you describe here prevail in all of our institutions. Doing some post-graduate work in the Seventies related to rehab and social service opened my eyes to agency slight-of-hand maneuvering to achieve one's self-interested aims. It's an interesting systemic problem that masks as altruism,but is really devoid of caring, except, that is, for #1.

doreenmary said...

Our senators and representatives have allowed their self-interests and differences to get in the way of resolution. It has gotten out of control. An analogy: If you work for any private "company" - in your job you represent that company as one of its team members... you DON'T throw your colleagues under the bus. You instead, unite. Our elected officials work for the United States of America... one team, one purpose -- the whole. And the bi-partisan disconnection needs to be mediated. The hatred and undermining going on is abominable.

Everyone lay down your swords! Get in a room all together sans suit and tie (wear tee shirts and shorts), leave your effin' briefcase at home and your little charts. Make a bigass pot of coffee... and talk long like real people... as you would at a planning meeting with a company... a meeting that goes late into the night to save itself by formulating strategy... as you would among your own family in crisis sitting at the kitchen table with a calculator and yellow pad figuring out how to avoid foreclosure and cut the utility bills and restructure your household spending... Hold hands... band together, so to speak.

To me, raising the ceiling seems the only solution in the immediacy. And as for the cuts in spending for the long term... why can't we see "the books" and look hard? Just what are the numbers? Show me the numbers. Bring in the accountants and put the politicians into place as mere facilitators and communicators, not zealots of their "party".

I am registered Republican (I know, shocker)... and I am embarrassed by my party's decorum. I am Republican because I believe in capitalism and that incentives for businesses create jobs for people and incentives to rise above beyond a flat economy. Only this doesn't seem to happen any more. Our Republicans have become crooks and selfish wealthy bastards. There is corruption. And so "government" steps in for correction because people, given the choice, don't do the right things for bigger causes. More government is less freedom, but then again... without it, all hell breaks loose.

I don't like the party choices any more. I don't want to be a card carrying member of one side, either side... Again, we all are in this as one united front... ONE team. The polar opposites need to come closer together and compromise. Why doesn't anybody compromise any more?

It is hard to watch the news without disdain. No wonder Obama is turning gray... Every president ages by decades in his short term(s). Who would want THAT job? Barack Obama is our elected president.. like him or not, he was appointed. The disrespect, the outcries, the interrupts of getting things done.... Stifle! Work with what we've got!