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Playing With DefaultPosted on Jun 5, 2011By Joe Conason The current puppet play in Congress—where Republicans sponsored a bill to raise the nation’s debt ceiling only because they wanted to vote it down—would be funny, if only they weren’t risking economic disaster. Unfortunately they’re not joking, as they push the country closer and closer to a potentially ruinous default. If the showdown over debt and spending between the House majority and the White House isn’t resolved before the first week of August, the federal government will no longer be able to send out Social Security checks, run Veterans Administration hospitals, pay Medicare costs or operate the national park system, to mention just a few significant items. Hundreds of thousands of federal workers would be furloughed without pay, and millions of seniors would stop spending money, slamming an economy that already seems stalled. But the consequences of that unprecedented situation would reverberate around the world, as nearly every expert—from the top bond trader, Mohamed El-Rian, to former Fed Chair Alan Greenspan—has warned. Because both the U.S. dollar and U.S. Treasury notes are so important to world trade and investment, a default on U.S. debt could drive the global economy into a recession worse than that from which we have been slowly emerging. The same experts have warned against the Republicans’ insistence on forcing more budget cuts before they will pass a higher debt ceiling. Indeed, Greenspan is so concerned with the prospect of a debt default, either now or in the future, that he had advocated increasing taxes to the same level as before the George W. Bush tax cuts. Congress must approve a higher debt ceiling, said the conservative fiscal guru—or risk catastrophe if the United States does not meet its obligations. The brinksmanship that had led to the current impasse in Washington, he told CNBC, is “an extraordinarily dangerous problem for this country.” Advertisement “Although we fully expected political wrangling prior to an increase in the statutory debt limit,” said a statement issued by the ratings firm, “the degree of entrenchment into conflicting positions has exceeded expectations.” Political polarization over the debt limit “has increased the odds of a short-lived default,” it said, meaning that Moody’s doesn’t believe even the Republicans would permit the default to continue. But the nasty reverberations of even a brief default could last far longer, with sharply rising interest rates, crashing stock prices, a plunging dollar, and yet another blow to America’s prestige and power. Most economists also believe that the Republican insistence on cutting spending in a slowing recovery is simply wrong because it will reduce demand and cost jobs. The party’s congressional leaders have yet to explain how they will boost the economy by throwing yet more people off federal and contractor payrolls, which will further depress the housing market, as well. Remember that these are the same geniuses who opposed the auto bailout two years ago—which has now proved not only to have saved hundreds of thousands and perhaps millions of jobs, but at a very low cost. Somehow they seemed to believe that Europe and China should build cars while we let our auto industry wither. While cutting spending and restraining the debt sound appealing, they must be done with great care. The Republican claim that there will be no harm in approaching default, or actually defaulting, is ridiculous to anyone who actually understands how markets work—and the damage they can sometimes wreak. © 2011 CREATORS.COM Previous item: Workers and Women Fight for Their Share of Egypt's Revolution Next item: The Canary in the GOP Coal Mine New and Improved CommentsWe are launching a major overhaul of our comments section. In addition to more robust spam filtering and moderation, new features include the ability to rate other comments, sort how they are displayed and respond directly via e-mail or in a thread. Unfortunately, commenters will lose their existing Truthdig identities. It's a pain, we know, but on the plus side you will now be able to log in with a plethora of options, including Google, Twitter, Facebook and Disqus accounts. Before launching this system we spent months in discussion with our top commenters. We listened to the feedback and we hope you like what we've come up with. Please direct any problems or concerns to us via our contact page. |
By IceNine, June 9, 2011 at 10:19 am Link to this comment
——————————————————-
Lew Ciefer:
I doubt that. But should there be you can be sure of a couple of things. Either they’re in no position to be of any help to right wrongs or they’ll have to sell out completely in order to advance. One who doesn’t march to the Power Elite’s drum beat doesn’t get to be in the parade.
———————————————————-
Hello Lew Ciefer - At other times, people have died in this country for the sake of building new parades - or to extend that metaphor, fior the sake of beating new drums. I don’t know if it will come to that, but new parades are already in the making. If we just give up . . . then, what the hell, we’ve just given up.
In spite of an alarming amount of evidence to the contrary, I happen to believe the human race is better than that - perhaps because I have known a few truly extraordinary people in my life time. Anyway, what I know for myself is this: I’m not whipped til I give up.
Report thisBy phreedom, June 8, 2011 at 5:37 pm Link to this comment
Thank you Joe,
An economic sovereignty currently controls our
political or governmental sovereignty, and our
particular economic sovereignty has not worked
globally, and more importantly, it has not worked
domestically.
It may be that the democrats need to seize this
default idea, aggressively, but intelligently.
Renegotiate all U.S debt to foreign sovereign-ties,
and;
1. Create a 100 year plan to make good on all debt
owed, but only pay 10 cents on the dollar to those
who pull out of(cash in) their U.S. Debt before a
period of 100 year period ends.
2. In the meantime, create a global blanket mortgage
on all foreign debt outstanding before June 30, 2011,
locked in at 2% non accrued, annually.
3. And stop selling government securities pronto, for
the same 100 year period.
4. Reissue to the U.S. Government a self-loan, a no
interest self-loan, for the benefit of its’
citizenry, in an amount equal to the 90% of foreign
debt we just reneged on(or at least postponed paying
for 100 years) in #1 above.
5. Raise taxes for 50 years that equal 50% of what
they were before the Bush years
6. Create a national sales tax for the next 25 years
that will peak at an amount equal to 100% of the lost
tax revenues during the Bush years.
7. All the self-issued debt mentioned in #4, be
mandated only for infrastructure rebuilding,
according to a 100 year plan of legitimately placing
our culture at the top of the competitive pyramid,
but also at the top of the quality of life pyramid.
Non of this debt be allowed to feed in any way the
military, insurance, political, private university or
banking industrial complexes.
Time to get off the “perfect bender” delusion, and
reshape the world in a manner that raises the quality
of life for the U.S. Citizenry as a requirement of
our sovereignty.
Do you really think our debtors are passive players.
I thought what I learned about our use of financial
power in the book, “The Economic Hitman” was
grotesque, but I must say, by the U.S. Defaulting by
way of renegotiating its’ debt, and putting off the
welfare of all other sovereign-ties for the sake of
its’ own, well, this is the kind of hit we should
deliver to ourselves, and a hit we will survive since
we invented it, and thus can solve its’ problems, but
also recognize its’ advantages to capitalize on.
Relief will come to those suffering now and those
many more that will suffer tomorrow, if we default,
since action will need be taken imminently, but if we
wait to see if raising debt ceilings, the mercy of
the efficient markets, and/or more bailouts will
trickle down aid to those suffering, it will never
get to enough in our lifetime.
No Joe,,, default could be a way to close this
decades long vicious cycle of republican whacko-ism,
and throw these double speak charlatans under the
bus. The republicans have good ideas to defeat the
democrats, the democrats need to get that, but yet
learn not look at the ideas of the republicans as the
thing that is attacking them or is in fact the
threat, especially not to ignore these ideas out of
hand along simple party and ideological lines.
Thank you,
Rhuen Phreed
Report this(now at, saving on rent, finally)
231 Park Drive, #40
Boston, MA
By Lew Ciefer, June 8, 2011 at 3:39 pm Link to this comment
@ IceNine, June 7 at 2:00 pm
Hello, Lew Ciefer. Are you stuck in a feedback loop? There are still a few men and women of integrity left in government, not many, but they are there. And nobody can stop you from voting for them.
I doubt that. But should there be you can be sure of a couple of things. Either they’re in no position to be of any help to right wrongs or they’ll have to sell out completely in order to advance. One who doesn’t march to the Power Elite’s drum beat doesn’t get to be in the parade.
Report thisBy mc.murphy, June 8, 2011 at 9:46 am Link to this comment
Both Doug and ocjim are blinded by partisanship to the kabuki on the Hill.
Both parties serve the oligarchy, both embrace wars and neoliberalism, and in
politics they merely serve as each others’ foil for the benefit of their respective
idiot bases.
Looking at both of you guys.
Report thishttp://mosquitocloud.net/
By ocjim, June 8, 2011 at 9:40 am Link to this comment
Doug is exactly right. Repugs have controlled the debate regarding deficit
reduction, enabled by the corporate media. Anyone with economic sense knows
the recession is not over and more stimulus is needed not spending reductions. In
that equation is the need to restore higher taxes for the top 2% and if politics
make it necessary, to the middle class.
Repugs, through McConnell especially, have made it clear that defeating Obama is
Report thisthe top goal for Republicans, more important than economic growth or stability.
Thus, even without the evidence of Republican obstructionism, they told us that
massive unemployment is a goal.
By Doug, June 7, 2011 at 5:48 pm Link to this comment
(Unregistered commenter)
This debt ceiling issue is very obvious to me. The republicans want to get as many spending cuts as possible from the democrats before okaying the debt ceiling increase for one reason: More spending cuts will cause even greater economic pain and unemployment in the lower and middle classes, which is bad news for Obama in 2012, and great news for the republican candidates in 2012. The republicans want to slash the budget in order to improve their chances of regaining the White House, and then they will be in charge again. But they only want to slash social spending and entitlements, not defense! It’s a power play, plain and simple.
Report thisBy IceNine, June 7, 2011 at 1:00 pm Link to this comment
————————————————-
IceNine:
And then, in 2012, we can vote.
Lew Ciefer:
Which means nothing! The Oligarchy controls the choices. Voting resolves absolutely nothing.
—————————————————
Hello, Lew Ciefer. Are you stuck in a feedback loop? There are still a few men and women of integrity left in government, not many, but they are there. And nobody can stop you from voting for them.
Report thisBy Lew Ciefer, June 7, 2011 at 11:51 am Link to this comment
IceNine, June 6 at 8:36 pm
And then, in 2012, we can vote.
Which means nothing! The Oligarchy controls the choices. Voting resolves absolutely nothing.
Report thisBy Lew Ciefer, June 7, 2011 at 11:50 am Link to this comment
@ mc.murphy, June 6 at 10:16 pm
Lew Ciefer, June 6 at 10:10 am
I’m curious, because while being a radical anarcho-socialist myself I tend to get
mis-identified, much as yourself as a right-wing troll, by Democratic Party dead
enders myself.
I’m not sure how to reply. I don’t like labeling myself but I guess if I had to I’d say that I’m a radical pragmatists. I use the terms ‘right’ and ‘left’ for the benefit of those to whom I’m addressing and readers.
Depending on how you are defining ‘socialist’ I find your ‘anarcho-socialist’ a contradiction. As for libertarians –oh geez—except for the anarchists within their ranks I’d have to say, generally, disgruntled republican prophets of doom invested in gold.
All ideologies share the same weak link that guarantees their failure; human beings. Human beings are the reason communism, socialism, republicanism, democracy, etc. always fail. It’s an embarrassment to be human.
Report thisBy r nemo, June 7, 2011 at 1:18 am Link to this comment
(Unregistered commenter)
Republicans have been ideologically insane sine Jack kemp and
Report thislaugher came up with supply side economic theory. Bush created
the great recession and now Boner-head wants to create a great
depression because he thinks it will defeat Obama in 2012.
Which it probably would. But by all definitions such actions are
INSANE! Republicans are a greater threat to americans then Ben
laden ever was!
By drbhelthi, June 7, 2011 at 12:36 am Link to this comment
“And I’ve got news for you ... it’s always been divide and conquer. But you
err, seriously. It’s not right vs. left. It’s top vs. bottom and the top
always pays to assure that the bottom is divided into many different groups
all eliminating each other and thus ensuring that the status quo is always
maintained.” = Lew Ciefer
Accurate summary.
Many books have been written that provide the details.
The current status of politics in the USA exemplifies your summary..
How many alleged candidates are “cruising” the USPresidency? How many of them
are doing it with their own funds? None.
Since Mr. Donald Trump was told to either join the illuminazification OR ELSE,
there is no one whose personal, financial resources are adequate to support a
genuine candidacy.
“- the top always pays to assure that the bottom is divided - - .”
And, what happened to the well-documented book by Dr. Jerome Corsi, which
proved that “Barack H. Obama” was born in Kenya, thus unqualified for the
POTUS ? “The top” suppressed its publication, and is attempting to remove all
copies from the world. Barack H. Obama, and his string-pullers do not want
the world to know the truth about their C.I.A.-NAZI-element-puppet, who is
furthering the WWII, NAZI agenda, with the assistance of Zionism.
If you have a copy of Dr. Corsi´s book, you´d best keep your mouth shut, or
Report thisyour home will be stormed and ransacked by XXL men in a black van who will
threaten you and your family with torture even death if you report their visit
to anyone. Such is the illuminazi U.S.A. of today.
By mc.murphy, June 6, 2011 at 9:16 pm Link to this comment
Lew Ciefer, June 6 at 10:10 am
When you write “You leftists back idiots like Nancy Peloser”, while following up
with many good “non ideological” points, it still leaves me wondering which
ideology gave rise to your current position.
I’d venture to say that you might be a radical leftist or perhaps a libertarian, but
that “you leftists” as opposed to ‘you pseudo leftists’ exclamation suggests the
later.
I’m curious, because while being a radical anarcho-socialist myself I tend to get
mis-identified, much as yourself as a right-wing troll, by Democratic Party dead
enders myself.
Reply appreciated, thanks in advance.
http://mosquitocloud.net/
Report thisBy IceNine, June 6, 2011 at 7:36 pm Link to this comment
It would be nice to see an end to the hyperbole flooding out of Washington DC. Our elected government needs to make a decision about our national finances.
They can end the wars we are involved in, quit bleeding us dry to play at nation-building elsewhere, and start rebuilding our country in earnest.
Or they can do away with the remnants of the social safety nets we still possess, let our infrastructure finally completely collapse from sea to shining sea, and enable themselves to continue messing about abroad without any pesky distractions such as the true concerns and well being of the so often mentioned American people.
And then, in 2012, we can vote.
Report thisBy Lew Ciefer, June 6, 2011 at 4:33 pm Link to this comment
@ ocjim, June 6 at 11:33 am Link to this comment
Lew Ciefer,
You are a cipher of the right-wing side of the polarization wrought by this 40 year old neo-conservative plan to divide and conquer at whatever cost.
Bull excrement! I’m not an ideologue ... I have a brain and reason. Ad hominem is NOT an argument. You’re unable to respond.
Why don’t little welfare government teat suckers ask Nancy Peloser where are all those jobs and economic growth that she claimed we’d get from unemployment extensions? Because even as dumb as the democrat base is they’re not quite as stupid as Nancy thinks it is. You don’t resolve high unemployment with higher unemployment.
You didn’t answer any of the questions. Do you really think a government can print money from nothing in perpetuity without devastating results? The bailouts are payoffs! It’s hush money to foreign banks to keep the lid on all that fraud bundling, high-risk, low-grade investments and rating them AAA by Wall Street and their little ghetto-hoes in government, and payola to the Dems for playing ball.
Why the hell do you want the debt ceiling raised? Is it because you fear your favorite government extortion-of-your-neighbors program might be affected? Is that it?
And I’ve got news for you ... it’s always been divide and conquer. But you err, seriously. It’s not right vs. left. It’s top vs. bottom and the top always pays to assure that the bottom is divided into many different groups all eliminating each other and thus ensuring that the status quo is always maintained.
Report thisBy mc.murphy, June 6, 2011 at 11:15 am Link to this comment
The moment someone trotts out Alan Greensapan as an argument for doing
something, is the moment every sane person should be clamoring for doing
exactly the opposite.
If he thinks that Bush tax cuts should be rolled back, then I’d suggest getting back
to Ike’s era tax rates would be mo betah, still.
What a tool—Conason, that is.
http://mosquitocloud.net/
Report thisBy ocjim, June 6, 2011 at 10:33 am Link to this comment
Lew Ciefer,
Report thisYou are a cipher of the right-wing side of the polarization wrought by this 40 year old neo-conservative plan to divide and conquer at whatever cost.
By Lew Ciefer, June 6, 2011 at 9:10 am Link to this comment
@ ocjim, June 5 at 4:53 pm:
Sweet Jesus, give it a break already! Get off the cross we need the wood for the fire. You leftists back idiots like Nancy Peloser who claimed that unemployment benefits “grow an economy and create jobs.”
Do you really believe that you can continue to print money from nothing in perpetuity and not have devastating results? It’s a double-edged sword; prolonged and increasing debt destroys the value of and confidence in the currency.
This writer is promoting Alan Greenspan. Greenspan? Yeah, that’s sound advice; follow what Alan Greenspan has to say! Help Wanted: Fox to guard henhouse.
Do you really believe the rest of society stupid enough to think that Republicans wreaked the economy all alone? The jackass Dems had control of all three branches of government and what the hell did those clowns accomplish with all that power? NOTHING! They’ve taken a severely damaged economy and have just about driven it off a cliff. Republicans and Democrats are two sides of the same coin and the Oligarchs dictate what will or will not happen. Do you believe that it’s pure coincidence that regardless which party rules, whatever legislation is passed, the Oligarchs always come out smelling like a rose and the general population is left holding the bill? The only difference between the Republicans and Democrats are the voter blocks that they purchase. And the Oligarchs OWN the Party! Including your $%%$#”! Mocha Savior!
Next you’ll be telling us that the clueless one—the Mocha Savior—is a great president. Speaking of which ... isn’t your Mocha Savior a millionaire? How does a social democrat (communist/socialist) become a millionaire without participating in the predator capitalist system?
The U.S. has a “SPENDING” problem! There are plenty of reductions that can bring spending down without effecting credibility. And the place to start is foreign aid!
This article is pure fear propaganda. Neither Moody’s nor anyone else is going to reduce the U.S.‘s credit rating. What the hell do you think countries the world over are holding in reserve surpluses and why? What currency do you think they’ll run to? The Euro? The E.U. doesn’t want the Euro as the world’s reserve currency. The minute that happens European manufacturing will fall through the floor. And Europeans aren’t Americans; they hit the streets and destroy their cities when stressed. The same thing applies to China. And no nation wants to depend on the IMF for anything.
Washington wants a higher ceiling to continue bailing out Wall Street in their effort to prevent the biggest banking and investment fraud in world history from coming to light and as a bonus for playing ball to provide the Mocha Savior vote buying funds so that Dems can hold on to power and run the nation into the 3rd world.
Control spending and get this Oligarch-owned government off people’s back and watch this economy take off. Where there should be heavy government regulation (Wall Street, the Fed, and the U.S. Treasury) there is none. And where there shouldn’t be government regulation an individual can’t take a morning constitutional without government sticking its nose up her arse.
Report thisBy litlpeep, June 6, 2011 at 4:05 am Link to this comment
The Clinton wing of the Democratic Party, now led by Obama, is milking three electoral cows for all they are worth in this pseudo-crisis about the debt ceiling.
Both parties milk the same vote-giving cows. Obama is winning this contest, though barely, only because his platoon of advisers is luckier right now that the R party’s.
Two of these cows are twins borne of a terribly common American political ignorance. One cow belongs to each of the two major parties. The third cow is smaller than either of the twins, but slowly growing to maturity, and any day now may give as many votes as either of those twins.
The third vote-giving cow is “independent” yet consistently represents most of its voters as those whose votes swing from one party to the other depending upon a very small range of economic dogmas & policies actively preached & followed.
The twin cows care none whatsoever about propaganda policy differences with policy practices. Those cows care only about ideological cleanliness, and ignore policy for years or even decades, no matter what the consequences.
Before Obama learned to milk these vote giving cows, he had to get Bill to come over and show him how to milk them. But Bill couldn’t have done that successfully had not Rahm previously taught Obama what the whole pile of electoral cow votes in the US smells like.
The R party electoral cow Obama is milking is that 80% of party true believers who will vote R no matter what moron the R party puts up for a candidate in any given election. This cow gives anywhere from 20-30% of the “popular” votes cast in any extra-party (public) election. That party’s cow is getting old, though, giving less votes in every election, so Obama knows that he has to also milk the D party cow for all she is worth.
The D party cow is the 80% of party true believers who will vote D no matter what moron the D party puts up for a candidate in any given election. This cow gives anywhere from 20-35% of the “popular” votes cast in any extra-party (public) election. That party’s cow is getting old, though, giving less votes in almost every election, so Obama knows that he has to also milk the “independent” cow.
The “independent” cow gives flip-flop votes; these votes are cast by voters who cannot see outside the party hack political system, so no matter how degenerate the politics, these voters are happy to vote for one of the evils of their preferred two lessers.
What neither party ever considers is that not only is the national political and economic culture degenerating along with party degeneration, the national culture has so notably degenerated already, that increasing numbers of thoughtful voters are not only refusing to vote for either of the evils of those two lessers, they are either not voting or are protest voting - voting for candidates/parties that have no chance of winning actual elections, but can possibly deny one party or the other the victory, thus exacerbating the overall national political degeneration.
This last group of voters is far more sensible than
either of the other three cow-voters for one simple reason. If the US government, including the official bipartisan electoral culture, remains incapable of sensible governance, then the best thing to do with it is force increasingly rapid degeneration.
Participating in a reformist manner in an irreversibly degenerate bipartisan political culture can only drag out the misery of an already otherwise collapsed nation, a nation that politically collapsed during or before the 1980 election. There is no obvious reason for supposing that either Obama or any R candidate can lead the bipartisan political degeneracy into reverse.
The major substantive crisis in US politics is how to reverse bipartisan political degeneracy culture; reversing that has no obvious solution. But forcing the issue into an overall national political crisis is the only known possible way to open any path toward national renewal.
Report thisBy Inherit The Wind, June 6, 2011 at 2:32 am Link to this comment
Since 1994 the GOP has shown that it will bluff until a Democrat with enough backbone and balls calls their bluff. Newt Gingrich bluffed. Clinton called his bluff and it backfired on the GOP.
But during the Bush years and now, the Democrats continuously refuse to call the GOP’s bluff on bigger and bigger issues. Compared to this, folding on the tax increase (which has made the debt ceiling issue worse) was small potatoes.
Now it’s clear that the GOP WILL push us into default unless they can trash Medicare and Social Security. They see it as “Win-Win”. If Obama folds they can loudly cheer that THEY saved the economy and even though Americans will see critical programs garotted and costs tossed back on them, they’ll see the Dems as weak and the GOP as strong.
But if Obama does what NEEDS to be done, and calls their bluff, THEY figure the resultant collapse of the economy will be blamed on Obama and sweep them back into the White House in 2012.
It’s a cold-blooded, cynical power play that betrays the American people either way. Will the people be dumb enough to buy into it?
Will the Dems now, as our Rome is collapsing, finally do what MUST be done? Put us through the Draconian steps necessary to rid us of this blight that even Republicans feel?
Report thisBy drbhelthi, June 6, 2011 at 12:11 am Link to this comment
It’s the same mentality that denies global warming, science and intellectuals in general. = SteveL
Perhaps.
Seems to depend on which group of scientists one chooses to believe.
Scientists who defer to tables of weather cycles, historically recorded, report one clarification. The Al Gore disreputables spout a different mumbo-jumbo sooth, that supports their billion dollar industry.
However, the destruction done to world forests and vegetation requires neither group for verification.
Report thisBy SteveL, June 5, 2011 at 7:40 pm Link to this comment
It’s the same mentality that denies global warming, science and intellectuals in
Report thisgeneral. If things do go bad they will just blame Obama and the Democrats.
Scary!
By ocjim, June 5, 2011 at 3:53 pm Link to this comment
We all know that Republicans are miscreants. It is a condition that the corporate media has helped to perpetuate in its own quest for more power and profit and a total divorce from responsible reporting.
As a result of a neo-conservative decision in the 1970s to put power and greed above any other motive in a democratic state, we are at this crossroad of decline.
Report this