Why I Don’t Have an Opinion on How to Resolve the Debt Crisis
1.) I don’t understand economics very well. (Even economists don’t seem to understand it very well, but that’s another story.)
2.) Therefore, in order to form an opinion I would need to depend on others’ explanations.
3.) The normal procedure is to get the explanatory basis for one’s opinions, and often the ready-made opinions themselves, from the “side” that you group with or agree with or share a worldview with. But I don’t group with or agree with or share a worldview with anybody, except perhaps for others who don’t group with or agree with or share a worldview with anybody.
4.) All the sources of information, explanation, and opinion on this issue seem filtered through . . . I was going to say “ideology,” but no, not even. They’re all filtered through a political agenda. It’s all about capturing the presidency in 2012, and how close the country can be pushed to the edge without going over, and who can be successfully blamed for the terrifying near miss (or, if we do go over some edge, who can be blamed for the catastrophe).
5.) Even though I agree with those who say our profligate ways have to end and that everyone will have to make some sacrifices, I will be very surprised if our new financial ruling class, those Chinese acrobats who keep the mesmerizing markets spinning with their feet above the fray, is included in “everyone.”
6.) I can’t stand Obama’s voice, and I can’t stand Boehner’s voice. I don’t hear a shred of sincerity in the calculated posings of any of them. I’m a dropout from politics because I have gone beyond ambivalence to equal-opportunity loathing. Or shall we say global loathing. Like global warming.
7) My late next-door neighbor Mamie Harmon, who used to say she lived through the Depression largely on bananas, once exclaimed that what this country needs is another Depression. Is that the only thing that will squeeze the bullshit out?
Ambiance 
Melinda said,
July 25, 2011 at 9:28 pm
Here’s one instance where having been a starving artist in my youth is gonna put me ahead of the game. I’ll just follow rich people around and see if anything falls out of their pockets.
amba12 said,
July 25, 2011 at 9:34 pm
Yeah, it’s those of us who’ve never had much money who aren’t going to notice much of a difference. I’ve cast a cold eye on quite a few booms and busts.
chickelit said,
July 25, 2011 at 10:36 pm
My late father, born in 1932, had little memory of the Depression but seemed to think and say that the cure for post-Vietnam economic malaise was a “soup-line depression.” There needs to be a mechanism to pool money back in the US instead of running the presses to cover the bills. The normal constraints and levers which Volcker used no longer seem available, which is a pity.
amba12 said,
July 25, 2011 at 10:44 pm
Domestically at least, part of the problem is that people grew the consumer economy by spending on credit. So that was actually a bubble of sorts, ultimately built on the housing bubble. When their home equity value plummeted, the bills came due. There’s some point at which growthmania and fiscal sanity are irreconcilable.
Callumachus said,
July 25, 2011 at 10:55 pm
Among other things: Those super-rich need to feel fear. The whiff of economic grapeshot.
Among other causes: Introducing regulation into business growth and financing ultimately became more dangerous than non-regulation, in our political system. Because the mass of people who were expected to benefit from it voted in a million different ways, and put little effort into following the game once the rules were in place. Whereas those who had everything to gain from slowly manipulating the superstructure of regulation till it gave them more advantage than ever, had but the one aim and purpose, and a lot of time and money to accomplish it.
Sports metaphors are the tiredest thing in rhetoric, but sometimes they work. A game with an umpire is more crooked than a game without one, if the ump is corruptible.
chickelit said,
July 25, 2011 at 10:55 pm
When their home equity value plummeted, the bills came due.
We saw a lot of that out here close up. We escaped the mania by never participating in it and playing by the old rules. Fiscal conservatism.
mockturtle said,
July 25, 2011 at 11:45 pm
The corporate oligarchs won’t feel the pinch, that’s for sure. What we really need is a ‘neutral’ party that will stand up for the nation and its people rather than for the special interests on either side of the political divide. Dare I call it ‘populist’?
My mother’s family was quite poor during the Great Depression and she wrote a very insightful, and not altogether negative, memoir of her childhood. She believes that people today are too selfish and uncivilized to bear such conditions without resorting to theft or violence. I’d like to think she is wrong.
amba12 said,
July 25, 2011 at 11:55 pm
Hard times can bring out the best in people . . . and the worst.
Tom Strong said,
July 26, 2011 at 10:46 am
First of all, you don’t need to understand economics to understand this issue. Because as you point out, this one is all about politics, baby.
I am currently less of an equal-opportunity loather than I have been in a decade. This particular mess is all one party’s fault – and in particular, the 25% of that party that insists on no new taxes, ever. The pox on both your houses’ stance is often a wise one to take, but right now it’s a cop-out.
amba12 said,
July 26, 2011 at 10:59 am
I agree that “no new taxes ever” is an impossible position to take, but because I have allowed my loathing (and my loathing for cable TV) to prevent me from informing myself, I’m unaware of how much the other party has been willing to face cutting spending. I know that precisely here we enter the ideological jungle of “taxes inhibit business job creation” vs. “cutting entitlements hurts the little guy.” Plus, if Social Security and Medicare benefits are cut back, you’ve basically been practicing confiscatory taxation of the middle and working classes. I have never been able to make sense of Social Security, a no-opt-out Ponzi scheme where, if benefits are now reduced or taxed, my money will have been taken away from me, redistributed, and not returned — how very much more so for your generation, who aren’t supporting an either modest-sized or “greatest” cohort of elders! Of course, the whole scheme was based on the notion that people would retire and croak in a timely fashion . . . What a mess.
Melinda said,
July 26, 2011 at 11:09 am
A book I just read on this very subject: A civil war between the Youngs and the Olds, as envisioned by Albert Brooks: http://www.amazon.com/2030-Real-Story-Happens-America/dp/0312583729/ref=sr_1_1?ie=UTF8&qid=1311692799&sr=8-1
Tom Strong said,
July 26, 2011 at 11:10 am
Obama’s latest offer was $3 trillion in spending cuts versus $1 million in tax increases. That included such popular Democratic efforts such as raising the Medicare eligibility age and trimming Social Security.
By contrast, the Bowles-Simpson commission proposed $2.8 trillion in spending cuts and $2.4 trillion.
Tom Strong said,
July 26, 2011 at 11:44 am
Er, that should end with “in tax increases.”
As for your comments on Social Security – well, you know I’m mostly in agreement. I’m not offended by its very existence, but I find it bizarre how loyal people are to the program’s existing structure. IMO, our cultural dislike of welfare programs has resulted in cutting the cheap programs that actually target people in need, while maintaining bloated monstrosities that are painted as non-welfare even when they are.
wj said,
July 26, 2011 at 12:53 pm
I have to take serious issue with your statement that the desire is to see “how close the country can be pushed to the edge without going over”. As far as I can see, the desire (at least for a lot of the Republicans in the House) is exactly to go over the edge. Otherwise, they would have taken Yes for an answer at some point.
But every time the Democrats agree to what they have demanded, that approach is abruptly “unacceptable” and the demands are ratcheted up. Which brings us back to the political issue. Only two things appear to matter to these people:
1) defeating Obama in 2012, which means never giving him anything, or accepting anything he agrees to.
2) not increasing government revenue at all (even to the point of rejecting closing tax loopholes, exactly because it would result in an increase in revenue).
Minor details, like trashing the economy of the entire country? Some simply refuse to believe; most simply don’t care. apparently they believe in their hearts that, if they crash the economy, they can successfully blame the Democrats for it. One can only pray that, if they succeed in forcing the crash, their belief turns out to be not only wrong but 180 degrees off. It will be no less than they deserve.
Ron said,
July 26, 2011 at 1:27 pm
wj, yes, you need to see further. Or did you think there would be no consequences of pushing Obamacare through on a single party vote, because of a brief supermajority?
amba12 said,
July 26, 2011 at 1:35 pm
“a growing movement by the young to exterminate the elderly.” “Go ahead, shoot. You’ll be doing me a favor.”
Sarah Rolph said,
July 26, 2011 at 2:20 pm
I think a lot of the comments here prove your point, Amba.
wj is convinced that the Republicans want to crash the economy and blame it on the Democrats. I’m astonished to hear that, and I imagine wj would be astonished the hear that many believe that the Democrats are trying to crash the economy and blame it on the Republicans.
I find it to be beyond peculiar that we have such different perceptions of the same situation. It’s always the case that everyone has different details, different perspectives, different interests. But an entirely different set of facts about the same issue? That’s odd, and it’s becoming the norm.
And not only are we going around with different facts, but we all firmly believe our version of the facts. And we spend a lot of time yelling at each other for being so stupid as to not see things our way (instead of, say, asking clarifying questions).
Something has gone badly wrong in our society. I think the fundamental problem is what you might call a lack of integrity. Large numbers of people no longer feel any shame about telling lies, stretching the truth, making a misleading statement, leaving out valuable information, etc. We seem to think it’s more important to get the upper hand than it is to know the truth.
President Obama, when challenged on one of the many campaign promises he broke, brushed the objection aside, saying “that was campaign rhetoric.” I was shocked by that–he didn’t see the need to even pretend there was anything wrong with having lied.
The so-called mainstream media does this all the time, presenting things in a certain light, to make a certain impression, without any seeming regard for the facts.
It’s as if the very concept of facts has been erased from the debate.
So I think you are doing exactly the right thing, Amba. The reasons you cite for not weighing in on this issue are good ones.
Meanwhile, you are in the trenches working on that core issue of integrity. You take your own integrity very, very seriously, and by doing that, you make a difference. Both in your own life and by providing a great role model for your readers.
amba12 said,
July 26, 2011 at 2:31 pm
Yikes, thank you, Sarah. And now I’ll go back to not thinking about what it is I’m doing . . . I think voters, regular people, are mostly sincere and that they, we, are being outrageously manipulated by people who have made a quasi-scientific, Machiavellian study of psychology, motivation, advertising, and propaganda. They are masters of pushing emotional buttons to get groups of people all het up, and there is hardly an ounce of sincerity to be found. There are exceptions, but they are rare (Chris Christie, maybe?).
Ron said,
July 26, 2011 at 2:51 pm
Sarah, thanks for your good observations. Reflecting on what you’ve written, I wonder if people have distilled the whole situation to: “If I ‘win’ (however defined) that’s all that matters and the rest is mere spin.”
Tom Strong said,
July 26, 2011 at 2:57 pm
Republicans lately have demonstrated a fondness for reading the Constitution in public places. Let’s read a bit, shall we:
I want to make a simple point. The Constitution gives all meaningful powers over the Federal Government’s finances to Congress. Not to the President. Which means that if the House Republicans chose to, they could vote to raise the debt ceiling today, with a clean vote. And unless something very strange happened in the Senate or the White House, the debt ceiling would in fact go up!
That wouldn’t rule out dealing with the long-term fiscal crisis. S&P (for whatever they’re worth) have already gone on record saying that without a long-term fiscal retrenchment they might still downgrade the Treasury’s credit. There would still be considerable pressure for financial reform and spending cuts. It just wouldn’t be backed by the additional threat of a federal default in the next week or so.
It is the House Republicans who have chosen to maintain that additional threat. They have agency in this. And moderates who pretend they don’t, or that we can’t know on which side the truth is on, are willfully closing their eyes to this agency.
Yes, it can be hard to know what the truth is, especially when so much of the debate is taking place behind closed doors. But there are simple facts that are available to the public. It is the duty of responsible citizens to learn and respond appropriately to those facts.
amba12 said,
July 26, 2011 at 3:08 pm
It does strike me as being driven primarily by their absolute determination to bring down Obama, whatever the cost. Choosing this moment for a showdown over the deficit and debt and how to deal with it is dramatic; they will no doubt claim that this game of chicken is the only way to get the public’s attention on the issue. Certainly raising the debt ceiling is postponing the issue, and the danger then is that it won’t be dealt with. But what is all this about giving the president the authority to raise the debt ceiling, when you are pointing out that the Constitution gives that authority to Congress??
Tom Strong said,
July 26, 2011 at 3:15 pm
The legal question as I understand it is that the debt ceiling itself may not be Constitutional, because a clause in the 14th amendment says that “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
That amendment was adopted during Reconstruction, and undoubtedly the clause was added to prevent a default on the debt of Southern states were they to recapture the Congress. But some legal scholars argue it has a broader meaning.
I’m skeptical of that argument, but I’m no legal scholar. I do believe the debt ceiling is a very stupid law; its main function is to allow Congress to pass whatever spending bills they like, then ritually humiliate the President for a few weeks before authorizing the spending. But no Congress has ever taken it anywhere near this far before.
Melinda said,
July 26, 2011 at 3:20 pm
If I ran my life the way the government runs this country, I’d be in women’s prison.
Melinda said,
July 26, 2011 at 3:22 pm
And as non-partisan as I try to be, I wouldn’t be surprised if the Republicans didn’t care whether or not they wrecked the country just to bring Obama down. They do everything, good and bad, with single-minded determination that I actually envy sometimes.
realpc said,
July 26, 2011 at 3:44 pm
We have had the same two parties for too long, and the result is they are both corrupt and entrenched and stupid. Neither party has a coherent ideology, just mindless slogans and hypocrisy. Neither party stands for anything current and sensible that anyone can actually believe in. The Democrats think that gay marriage will save the world and bring peace and prosperity for all, and the Republicans think keeping taxes low will always and forever solve all economic problems.
We need a new ideological framework and more than two major parties.
But even that probably wouldn’t help the economy right now. The real estate bubble crashed like an enormous tsunami and it will take a long time to recover.
I think the economy will recover on its own after a while. But we really should get rid of those two crooked parties. Otherwise, banks will just keep getting bigger and we will just keep on bailing them out, forever.
wj said,
July 26, 2011 at 3:50 pm
Ron, to clarify a couple of points:
a) I was well aware what the consequences of Obamacare would be. Which is why it wasn’t my preference at the time.
b) I was also aware of what the consequences of Medicare Part D and the Bush tax cuts would be. Which is why I didn’t support my party’s pushing them through either.
Just FYI, I’ve been a Republican (and a fiscal conservative) for decades. Regretably, my party has moved far away from what it was when I came of age. I’m not willing to give up on trying to restore sanity to my party. But it looks increasingly futile.
wj said,
July 26, 2011 at 3:55 pm
Tom Strong makes an excellent point. The Constitution specifies that all spending bills must originate in the House. If the House Republicans seriously wanted to decrease the deficit without raising taxes, all they have to do is not include so much spending in the budget. Which is entirely within their power. Want to cut spending? Then don’t spend. What could be simpler?
And if you do vote to include spending in the budget, don’t blame everybody else when the books don’t balance.
mockturtle said,
July 26, 2011 at 4:37 pm
We know that the only ‘trickle down’ in ‘trickle down economics’ is the middle and lower middle classes being pissed on. Wall Street is flying pretty high right now and some of the big banks used their bailout money for acquisitions [e.g, B of A buying Merrill-Lynch], laid off employees and made out big on the whole deal.
Most of our elected representatives are far more interested in getting reelected than in helping the country out of a crisis and both sides take money from the same big players. Obviously, we need both increased taxes and spending cuts to get the job done.
Tom Strong said,
July 26, 2011 at 4:45 pm
Melinda – LOL. Times two. ;-)
Callimachus said,
July 26, 2011 at 5:03 pm
what I see so much of here, and outside, is a barely hidden but not quite conscious yearning for a new depression — not the suffering, but the creative destruction and the chance of a new birth. I think that is what motivates the tea-party-ish intransigents in the House. After all, historically, America’s depressions, like its wars, generally have led to spectacular prosperity. Maybe there’s a sense that we didn’t fall far enough in 2007.
I understand that yearning. Don’t know that I agree. The whole model seems broken. There are spectacularly successful companies in America today. Google, say. But they employ, what, I’d be surprised if it was 20,000 people. There aren’t factories all over America where they make “google.” And where your kid out of high school can get a good job in the Google plant, represented by Googlemakers Local 147.
Which means the only way anyone makes money, unless you’re a Kardashian, is to invest in companies who make money for you by ruthlessly cutting other Americans’ jobs and benefits. Or your own. Looks to me like a recipe for failure. Add the housing stupidity to it, and the persistent effort to socially engineer a New Jerusalem by wealth distribution from the hard-working and just-barely-making-it to the dysfunctional poor or the already-too-rich.
This is the way people felt in Germany once.
amba12 said,
July 26, 2011 at 5:10 pm
After my brother sent me an article on Michele Bachmann, I wrote back to him, “If we were Weimar, she could be the first female Hitler. And how about that for a glass ceiling to break!”
Tom Strong said,
July 26, 2011 at 5:30 pm
Callimachus – I understand that yearning too, though I am definitely against it. But I’ve been an (unsuccessful) entrepreneur in one of the making-things industries, and I know how thoroughly exasperating it can be to try to get something new started in an industry where there are established powers supported by tacit or explicit government subsidies.
That said – creative destruction does not require the use of an atomic bomb. And it galls me that the Tea Partiers could have already won that fight – decisively – but turned the opportunity down. A $3 trillion spending cut, paired with tax reform, would have gone a very long way towards creating new entrepreneurial opportunities in this country. But offered that opportunity – twice! – they spat on it. All in order to defend tax cuts that benefit a very narrow – and politically entrenched – class of people.
Whatever such a movement represents, its nothing I want any part of.
Tom Strong said,
July 26, 2011 at 5:39 pm
It also strikes me that, while there are definite downsides to Made in the USA & all that, by decreasing our jobs & our prices in manufacturing we are also increasing our jobs & prices in healthcare. So our stuff costs less, but our healthcare costs more.
Sarah Rolph said,
July 26, 2011 at 5:55 pm
amba, I agree with your comment at 2:31. A very good point.
Wow, I came to say that and to ask you a clarifying questions and I’m stunned by your comment at 5:10. At this point I can’t even imagine a clarifying question for that.
My question is about this:
“It does strike me as being driven primarily by their absolute determination to bring down Obama, whatever the cost.”
What do you mean by “whatever the cost”? What inappropriate cost do you think is being risked or extracted?
I don’t agree that the fight for fiscal sanity is being driven by the desire to “bring down” Obama (although it seems likely to me that those two rational sentiments would travel together; I put your phrase in quotes to make sure to indicate that I have no wish to see him personally harmed, but I do very much want to stop his agenda).
The driving factor, in my view, is reality. As you put it: “raising the debt ceiling is postponing the issue, and the danger then is that it won’t be dealt with.” It hasn’t been dealt with effectively for a very long time. And it has been SO not dealt with by this administration that they haven’t even bothered to create a budget! One can be forgiven for suspecting that they will do everything in their power to continue spending. One non-subtle signal of that is the way all these bills contain provisions to cut unspecified things at an unspecified point in the future. Even as a kid, we knew to laugh when Wimpy said he would gladly pay Tuesday for a hamburger today. Enough with the baloney.
Those of us who want to NOT raise the debt ceiling believe that this is the only way to stop the spending. It’s against the law to default on the debt, so it’s unlikely to happen. Just as you and I find a way to pay the IRS even when our credit card is maxed out and the rent is due, the government will find a way to pay its bills. Unlike many citizens today, the government has not yet tightened its belt. Cuts can and will be made. If the President wants to figure out how to prioritize that all by himself, he is welcome to the task. It is not as if nobody has ever balanced a budget before. The publicity machine you refer to is making this entire issue sound a lot more complicated than it really is.
The President put together a budget that didn’t even begin to address the problem, in February, and it was voted down *unanimously* by the Senate. Not even the Democrats are willing to take us into the uncharted fiscal territory that our ill-informed President is blithely trying to convince us will make everything rosy somehow.
The basic outline of the President’s demands have not changed. He insists on raising taxes. That will only make things worse. It won’t solve the problem, and it will create new ones.
Given all this, I am hard pressed to understand why people think there is any hidden agenda here, anti-Obama or otherwise.
Ron said,
July 26, 2011 at 6:05 pm
Amba: “Breaking the Krystalnacht Ceiling” If that’s not a dog whistle….
wj: My point is not about the merits (or lack thereof) of Obamacare or Medicare part D; I’m saying the WAY it was passed would come back at them regardless of the merits. FDR wanted enough Rep buy-in so that WHEN a Dem is voted out of office they have enough ownership of the New Deal that they will not trash it. (which is how Eisenhower acted!) but a bill of such a size on a one party vote will haunt you.
chickelit said,
July 26, 2011 at 6:14 pm
Unlike many citizens today, the government has not yet tightened its belt.
Best nugget of truth so far. Why do I say this? I’ve visited DC recently, and have spoken to people who live there about this. They are in the midst of a mini-boom. I suspect (but cannot prove), that many DC-area journalists have scarcely travelled outside their bubble recently.
When they consider their island, the retort is “Why don’t you become more like us?” The DC model is mimicked to a lesser extent at state capitals.
amba12 said,
July 26, 2011 at 6:21 pm
Sarah — genuine question: what ways can the government find to pay its bills? The people I know, when their credit cards are maxed out and the rent is due and they owe the IRS, what they do is . . . borrow money from someone they know. The government could also print more money, which we certainly don’t want it to do. Or, it could simply not pay a bunch of people next month — Social Security recipients, maybe? Then they will join my current main employer in saying, “Sorry, things are tight, we’ll pay you when we can!” Ironically, until now, Social Security (which I wish did not exist, at least in its current form) has been the one payment I can count on receiving at a specified time.
I don’t believe it’s Obama in particular the Republicans want to bring down — I believe it’s any Democrat. They are determined to recapture the presidency. They have convinced their sincere voters that they want to do that to rescue the country. I believe in the sincerity of the sincere voters. I do not believe in the sincerity of the pols of either political party. I believe that each side has selling points for particular sincere constituencies and that each party’s vested interests in money and power are the real driving force. We’ve all been sold.
I do sincerely believe the debt and deficit are desperately serious problems, but that in itself might be naïve. I’ve heard people who inhabit the Byzantine inner workings of economics and finance say that’s not as serious as we sincere types think . . . because “the government will find a way to pay its bills.” I do not wish to be a sincere sucker for either party’s propaganda.
amba12 said,
July 26, 2011 at 6:23 pm
Chicken: maybe there should be a mass movement to withhold taxes. Let the government collapse, and let citizens band together and use the money to fund local law enforcement and whatever else they need. The only thing we’d be lacking is a national defense.
Just kidding . . .
Sarah Rolph said,
July 26, 2011 at 6:30 pm
Tom Strong, you said:
“A $3 trillion spending cut, paired with tax reform, would have gone a very long way towards creating new entrepreneurial opportunities in this country. But offered that opportunity – twice! – they spat on it.”
Could you please explain what you mean here? My understanding is that the deal almost went through, but that President Obama insisting on adding a huge new tax increase that was an obvious dealbreaker.
What spitting are you referring to?
Callimachus, your point here is an interesting observation about the zeitgeist: “what I see so much of here, and outside, is a barely hidden but not quite conscious yearning for a new depression — not the suffering, but the creative destruction and the chance of a new birth.”
But when you say: “I think that is what motivates the tea-party-ish intransigents in the House”, I believe you are exactly wrong.
One person’s intransigence is another person’s principled behavior.
We elected those tea-party-ish representatives to bring fiscal sanity to Congress, and we are pleased that some of them have the spine to keep their promises. And absolutely astonished that President Obama would suggest they should do otherwise.
There will be seriously difficult financial times for a good while now, because of the foolish policies that have already been enacted.
Those of us who want to stop the spending now are doing so because we believe that is our best chance to get the country back on its feet as soon as possible. We believe that continued spending and higher taxes will bring financial ruin. Is that really so hard to believe or understand?
chickelit said,
July 26, 2011 at 6:31 pm
Amba: I’m not anti-tax! My wife and I pay more taxes now than ever before-especially since she reentered the work force. Being well below the income level deemed rich by the Obama administration, I should be all for “soaking the rich” too. Yet I’m bored with these Michael Moore comparisons of 1950’s tax rates with today’s. In the 1950’s, Federal income taxes started after just $2k and at a rate 24%. Here my dad frets back in 1953 about the tax rate as a GI (see the footnote #2 for an actual tax table from that year- sorry for the shameless plug). Everybody was taxed more! And yet poverty existed!
If the Omaba model were implemented, only the rich would pay more. This is because of vote buying, to put it bluntly. Of course the Republicans buy votes too–the votes of the rich–but those are far fewer in number.
chickelit said,
July 26, 2011 at 6:43 pm
When more people had skin in the game, government was leaner. It sounds counterintuitive: more skin, smaller animal.
amba12 said,
July 26, 2011 at 6:49 pm
Well, no! The surface-to-volume ratio is indeed greater the smaller an animal is, because of the exponential divergence of numbers squared and numbers cubed.
amba12 said,
July 26, 2011 at 6:49 pm
I mean, no, it’s not counterintuitive!
Sarah Rolph said,
July 26, 2011 at 6:53 pm
amba @6:21, what I did when I couldn’t pay the bills was negotiate deals with the people I could, stretching out the payments, and give up the stuff I had to. No more whisky or champagne. TV is not a necessity. What a business does is cut expenses or increase revenue. Sometimes layoffs are necessary, sometimes firms go out of business. These are the facts of reality, you can’t always borrow money. If you have no credit, that’s it.
Now, the government should be in austerity all the time, it should never even get into a situation where there are enough employees that it doesn’t hurt to lay some off. Because the government is ALL cost. Unlike a business, which actually generates revenue for the economy, the government is on the other side of the balance sheet. All government jobs are costs. It is not possible for them to provide economic value. Of course they have value of another nature, such as national security. The boomtown chickelit describes is not made up of essential government services. And I’m afraid they have not cut back on their catering bills or their private jets.
There are entire government agencies and departments that are unnecessary. I say eliminate the Department of Education, for one. Fewer federal agencies, more local control. There are layers and layers of bureaucracy in government that don’t have to exist.
The Wall Street Journal runs a piece occasionally with their A – Z cuts for consideration, all kinds of things like the helium reserve that are just legacies of someone’s rent-seeking and vote-buying.
chickelit said,
July 26, 2011 at 6:55 pm
I mean, no, it’s not counterintuitive!
To you it’s not–that’s because you’re smarter than most. :)
Also, don’t smaller animals live longer?
Melinda said,
July 26, 2011 at 6:57 pm
“Breaking the Krystalnacht Ceiling” If that’s not a dog whistle….
My ears picked it up.
amba12 said,
July 26, 2011 at 7:07 pm
And I’m afraid they have not cut back on their catering bills or their private jets.
Neither have the Wall Street and other corporate executives, who will lay off staff rather than cut their own bonuses, which is why (among other things) service sucks: it is provided by automation and benefitless, minimum-wage workers, so that profits can be maximized for stockholders (outside of those sectors that are still innovating, profits are now maximized by cutting costs, which usually means cutting people and service), and the executives are then rewarded for pleasing the shareholders; now go ahead and tell me everyman has his/her 401K in the market and that investment is now becoming more important than employment as a way to survive … wait, you don’t have a 401K if you don’t have a job . . .
Neither government nor big business is the good guys.
amba12 said,
July 26, 2011 at 7:09 pm
They should have let those too-big-to-fail firms that were bailed out go out of business.
amba12 said,
July 26, 2011 at 7:10 pm
Also, don’t smaller animals live longer?
Nope, alas, bigger animals do.
realpc said,
July 26, 2011 at 7:25 pm
“They should have let those too-big-to-fail firms that were bailed out go out of business”
Yes, and they also bailed out firms that were not failing. Why? And then they told us the bail-outs saved the day and prevented a great depression. How do they know that? Maybe the bail-outs just helped to prolong the recession.
The same guys who told us there was no housing bubble told us the bail-outs were necessary. Is there any reason we should continue believing them?
Callimachus said,
July 26, 2011 at 8:28 pm
I have great sympathy for the Tea Partiers. I defend them from the smug, snide liberals who surround me, when forced to it. The TP are the only semi-organized set of people in the country right now who are as angry as they should be, for roughly some of the right reasons. They are not a new thing; they are a very old one — the “people” that the Founders (with much hand-wringing and many glances Heavenward), decided to trust. They have more in common with the Whiskey Rebellion than the Tea Party, but let it pass. As always, they are intuitively right; their hearts are right. Their heads, when the come to make arguments, are all twisted up, and their taste in leaders, or rather in the demagogues they allow themselves to be led by, is execrable.
They see the current system as untenable. It is. They also see it as not merely a perversion of the correct, natural system of American sovereignty, but as a usurping bastard child of the loathesome copulation of political hackery and special interest cash. In that case, you’re not talking about grabbing back the controls of a hijacked plane; you’re talking about letting the false monster crash and burn, and then restoring the legitimate system. This is my guess about the emotional level of much of what is being said and done. I find it a kinder, and more plausible, reading than “they’ll wreck the economy to bring down Obama.”
chickelit said,
July 26, 2011 at 8:35 pm
@amba: your notion of surface-to-volume ratio should be fleshed out more.
Melinda said,
July 26, 2011 at 8:49 pm
Cal, I don’t know any actual Tea Partiers. I just know I’m not crazy about their spokesmodels.
Icepick said,
July 26, 2011 at 8:52 pm
And unless something very strange happened in the Senate or the White House, the debt ceiling would in fact go up!
Um, yeah, unless something strange happened. Such as the Senate leadership (Democratic) not agreeing to the same provisions (it has already happened this time around) or the President (Democratic) vetoing the bill (which he has threatened to do unless it meets some unspecified criteria that he will not tell anyone.)
Another interesting point – Obama has threatened to veto any bill that doesn’t include enough space under the cap to get past the 2012 election. To support his view he has called for Republicans to follow the moderate tone of Ronald Reagan on this issue. Of course, Reagan didn’t seem to mind only raising the debt ceiling enough for six months or so of operation, but Obama doesn’t care about that part.
If the House Republicans seriously wanted to decrease the deficit without raising taxes, all they have to do is not include so much spending in the budget. Which is entirely within their power. Want to cut spending? Then don’t spend. What could be simpler?
Okay, so when they propose a budget that the Sentate then doesn’t approve, or that the President vetoes, then what? The power ORIGINATES in the House, it doesn’t end there. If the House were to go against the vote of the Senate and President, then we will end up without a budget. Of course, the Democrats didn’t bother to pass a budget for the current fiscal year, so that’s hardly the end of things either.
But it amazes me that people think ONLY THE REPUBLICANS are being insincere and incompetent here. Let me repeat – the Democrats did NOT pass a budget for the fiscal year 2011 even though they had absolute control of the House, the Senate (for budgetary purposes they would not have had to concern themselves with a filibuster – they misused those rules to pass Obamacare) and the Presidency.
So please, spare me the rhetoric about the Democrats being the responsible party in these negotiations. They no better than the Republicans. They’re just as slimy, and just as incompetent.
Icepick said,
July 26, 2011 at 8:56 pm
Wall Street is flying pretty high right now and some of the big banks used their bailout money for acquisitions [e.g, B of A buying Merrill-Lynch], laid off employees and made out big on the whole deal.
Actually, BofA is not really in much better shape than in 2008. Additionally, some of those acquisitions were forced down the throats of various banks at the time. The interesting thing, though, is that even though many of these large financial institutions are still in horrible shape (if accounting were done in any real fashion), the people running these institutions are doing as well as ever. Why people like Jamie Dimon and Vikram Pandit are still employed is beyond reason.
Maxwell James said,
July 26, 2011 at 9:00 pm
Sarah @6:30:
Could you please explain what you mean here? My understanding is that the deal almost went through, but that President Obama insisting on adding a huge new tax increase that was an obvious dealbreaker.
Sure. There have been two sets of meetings between Boehner and Obama that nearly resulted in a “grand bargain.” While the exact reason for the fallout for each meeting varies from source to source (not surprising considering the closed doors), the broad contours of the near-agreement do not. For instance:
Fox News, July 11: $4 trillion total deficit reduction package, including $3 trillion in spending reductions and $1 trillion in tax increases.
New York Times, July 11: $4 trillion total deficit reduction package, including $3 trillion in spending reductions and $1 trillion in tax increases.
We don’t know what exact disagreement led to the end of the deal each time, although for the last one at least most media sources make mention of a $400 billion difference over tax cuts.
Now, to me, $400 billion is a lot of money. But in the context of these discussions – it is not. It is ten percent of the total package. When a negotiation gets down to the last ten percent, adults split that last part down the middle and call it a day.
That’s not what’s happened. And while it’s certainly possible there’s been some intransigence on Obama’s part – in fact I’d be surprised if that weren’t the case, as “politics aint’ beanbag” – what is utterly clear is that the majority of Boehner’s colleagues do not support any bargain that includes any tax increases. They’ve said it over and over again. I can provide you with quotes if you want, but frankly I don’t think I need to. There’s been several in the news every day for months now.
But here’s the thing: a public commitment to $3 trillion in spending cuts from Obama is a _huge_ concession. As you yourself note, his original budget in January came nowhere near that figure. That’s an incredible policy win for the Republicans considering they only control 1/3 of the federal government. Reagan would have taken it in an instant.
And yet they turned it down. Twice.
That’s what I mean by spitting.
Now, I have a question for you. When you say:
Those of us who want to NOT raise the debt ceiling believe that this is the only way to stop the spending.
What is your basis for this belief? I genuinely want to know. Because it seems to me that there are a number of other ways to reduce spending.
Icepick said,
July 26, 2011 at 9:05 pm
what I see so much of here, and outside, is a barely hidden but not quite conscious yearning for a new depression — not the suffering, but the creative destruction and the chance of a new birth. I think that is what motivates the tea-party-ish intransigents in the House. After all, historically, America’s depressions, like its wars, generally have led to spectacular prosperity. Maybe there’s a sense that we didn’t fall far enough in 2007.
What makes youi think we aren’t ina Depression?
As for not going far enough – we certainly did not after the bail outs. After the TARP, these largest banks should have been broken up. Instead the government decided to double up the size of many of the largest. Just one of many mistakes made in recent years.
Icepick said,
July 26, 2011 at 9:13 pm
A $3 trillion spending cut, paired with tax reform, would have gone a very long way towards creating new entrepreneurial opportunities in this country. But offered that opportunity – twice! – they spat on it. All in order to defend tax cuts that benefit a very narrow – and politically entrenched – class of people.
A three trillion dollar cut, with an additional one trillion in revenue, over a ten year period is nowhere near enough. That is not a good deal, that is shirking repsonsibility. That four trillion would represent about two and ahalf years of federal deficits at the current pace. What we need are something more along the lines of ten trillion dollars in cuts over the next ten years.
Further, I need to correct a false point of view that I see keep coming up. It is implicit it what I quoted above, too. We are NOT HAVING A CRISIS right now because of US government debt. The crisis has not started yet. All of this is (or rather, should be) an attempt to get in front of the problem. We are rapidly approaching the point of no return, however. (Actually, I think we passed that point years ago, given the level of competence of the elites in this country.)
However, I expect all of these negotiations to mean nothing in the end. There is no way the government will do what is needed, because it would step on too many contributors toes. SO we will get some lame compromise where most of the cuts will allegedly be made by some future Congress.
Maxwell James said,
July 26, 2011 at 9:19 pm
Icepick @8:52:
Such as the Senate leadership (Democratic) not agreeing to the same provisions (it has already happened this time around) or the President (Democratic) vetoing the bill (which he has threatened to do unless it meets some unspecified criteria that he will not tell anyone.)
Obama has threatened to veto the bill if it’s short term. That’s a specific criteria that you point out yourself. So I don’t know why you think he’s got secret criteria he won’t tell anyone. Why on earth wouldn’t he? It is the only power he has in this negotiation – without it he would not even be involved.
Reagan didn’t seem to mind only raising the debt ceiling enough for six months or so of operation, but Obama doesn’t care about that part.
Reagan was never two weeks from the deadline with the Democrats threatening to default on all payments unless he gave them everything they asked for.
The power ORIGINATES in the House, it doesn’t end there. If the House were to go against the vote of the Senate and President, then we will end up without a budget.
Right. That’s why they have to negotiate and agree on a budget. Which they already did, incidentally.
But it amazes me that people think ONLY THE REPUBLICANS are being insincere and incompetent here.
For what it’s worth, I do not believe that. I believe they are being MORE insincere and MORE reckless (though certainly not more incompetent). The Democrats should have raised the debt ceiling earlier. They’ve already paid for that mistake dearly and will pay more before this is through.
Again, the House can choose, right now, to raise the debt limit and eliminate the threat of default. They can choose a different approach to decreasing spending and taxes – such as, you know, winning the next election and gaining control of all three branches of government. They have agency. That they are instead threatening to first smash whatever (pathetic) hope there is of a recovery strikes me as incredibly reckless and foolhardy.
Maxwell James said,
July 26, 2011 at 9:23 pm
A three trillion dollar cut, with an additional one trillion in revenue, over a ten year period is nowhere near enough. That is not a good deal, that is shirking repsonsibility. That four trillion would represent about two and ahalf years of federal deficits at the current pace. What we need are something more along the lines of ten trillion dollars in cuts over the next ten years.
I think we need cuts, but I don’t agree about that scale. Am tired now but am willing to consider your logic another day. In any case, I would think given past history that $3 trillion would be a remarkable start.
But instead, looks like we’ll just flush everyone’s savings down the toilet. Again.
Icepick said,
July 26, 2011 at 9:27 pm
I do sincerely believe the debt and deficit are desperately serious problems, but that in itself might be naïve. I’ve heard people who inhabit the Byzantine inner workings of economics and finance say that’s not as serious as we sincere types think . . . because “the government will find a way to pay its bills.” I do not wish to be a sincere sucker for either party’s propaganda.
Those people involved with the inner workings of economics and finance also didn’t realize that we were in a huge property and credit bubble until the whole damned thing blew up in their faces. They are not credible at this point. And the government could find ways to pay its bills – but that doesn’t mean it is a solution to the problem. Inflation, punative taxation, draconian cuts – all of these are very bad options, and some are worse than a default.
Icepick said,
July 26, 2011 at 9:29 pm
In any case, I would think given past history that $3 trillion would be a remarkable start.
Maxwell, it would be a remarkable start if it were something THEY WOULD BE RESPONSIBLE FOR. However, a lot of every plan I’ve cared to look at has a lot of the savings on the back end. Do we really think the Congress that takes office in 2019 is going to give a damn about what the Congress of 2011 thought? They won’t, even though many of them will be the same jerks in office now.
Maxwell James said,
July 26, 2011 at 9:36 pm
Heh, guess I outed myself. The price of saved forms on different computers. @Sarah – for the record Tom Strong = Maxwell James and vice versa.
Icepick said,
July 26, 2011 at 9:42 pm
That they are instead threatening to first smash whatever (pathetic) hope there is of a recovery strikes me as incredibly reckless and foolhardy.
I don’t see where what the Republicans are doing is any more reckless than what the Dems are doing. And given that Obama is (falsely) threatening to stop paying Social Security checks come August 2, I don’t think the Republicans are even being the most contemptable people in this negotitiaon./
That said, the reason I didn’t vote for most Republicans last fall was that I didn’t want to vote for the likes of Boehner or McConnell to be running things.
* On Social Security, I doubt the President couldn’t even stop the payments if he wanted to – the system is undoubtedly very lare and veery complex, so it wouldn’t be as simple as just hitting the off switch. Additionally, even though SS is running in the red this year, it still is taking in enough money (through FICA taxes) to meat most of its obligations. If Obama DID stop such payments, he would no doubt be in violation of the law.
** I did vote for two Republicans last year. I voted for the Republican candidate for state AG because a friend ofmind thought she was kind of hot, so what the hell, I did it to help out his wet dreams. And I voted for Daniel Webster for Congress because Alan Grayson was such a contemptable ass that I had to vote against him.
Icepick said,
July 26, 2011 at 9:44 pm
Maxwell, let’s see Congress vote for immediate SUBSTANTIAL cuts – then I’ll be impressedeven if they don’t get all the way there. You know where I stand on that issue, though. ;)
Icepick said,
July 26, 2011 at 9:50 pm
Annie, at some point one can certainly say “NO” to any more taxes – when they reach 100% of everything.
Cal, I went to what I believe was the earliest Tea Party rally in Orlando in March of 2009. I found a group of people that were pissed at everyone in Washington from both parties. A great many of them spoke of how bad GWBush had been as President. They were in favor of a smaller government, lower taxes (at least eventually) and a balanced budget.
What I did NOT hear that day were any specifics about how they wanted to accomplish these things. Given what I knew of the federal budget I was pretty certain that these folks hadn’t really thought out their ideas – not the people in the crowd nor the leaders of the rally. I still don’t think they have realized the full extent of the problem, and that is why I’m not a Tea Partier.
As for their leadership – I don’t find most of them to be any more contemptable than the standard issue Washington pols, so I don’t understand why all the hand-wringing over the Michele Bachman’s of the world.
Icepick said,
July 26, 2011 at 9:52 pm
And could we have some more pictures of warm fuzzies? Please?
Icepick said,
July 26, 2011 at 10:15 pm
I just saw a new story on this. Reid’s plan proposes $2.7 trillion in savings. Boehner’s plan proposes $1.2 trillion in savings now, and an additional $1.8 trillion later. So, we have already lost oveer a trillion dollars in debt reduction, despite everyone saying that debt reduction is crucial. As I said before, don’t expect anything much of substance to come out of this.
amba12 said,
July 26, 2011 at 10:34 pm
Callimachus 8:28 is as far as I’ve read right now, but IMO it wins the thread so far.
Icepick said,
July 26, 2011 at 11:36 pm
Wow, Boehner’s plan is looking worse by the minute:
Icepick said,
July 27, 2011 at 12:00 am
For the record, I find the debt ceiling as a concept silly. At best it allows the politicians to posture before doing what they were going to do anyway (raise the debt limit) and at worst it gets us to the situation we are in now. As Maxwell (or someone above) said, make the cuts during the budgetary process. After all, it IS your job as a Congress Critter to take care of such matters….
Stephanie said,
July 27, 2011 at 2:38 am
@ Sarah Rolphe:
You make a couple assertions that I find troubling, and perhaps slightly naive.
First:
“It’s against the law to default on the debt, so it’s unlikely to happen.”. 5:55 pm
Really??? Cause laws are never broken? I’ll buy that if you shut down all non essential services other than paying debt, it *may* be possible to continue servicing the debt, simply because I really don’t know- but I would suggest that you don’t either. And I don’t think you’ll get a straight answer to that question from either side of the aisle.
Second:
“Because the government is ALL cost. Unlike a business, which actually generates revenue for the economy, the government is on the other side of the balance sheet. All government jobs are costs. It is not possible for them to provide economic value.” 6:53pm
You forget about indirect revenue. An example: My husband works for a company that sells products to the govrnment. They pay his company, which gives his company revenue. He gets his paycheck by working on that government contract- indirectly, you could say he’s paid by the gov’t.
We use that gov’t money locally- to pay bills sure, but also to purchase goods. In the last year, we have:
Purchased a (slaughtered) lamb from a local farmer. Which provided revenue for that farmer.
Hired local contractors to fix a leak in the basement, better insulate our house, and finish out a basement office. Those purchases provided revenue for a couple different local contractors.
I would suggest that the government’s initial investment DID provide revenue. I’m not sure of the exact numbers ( and it’s too late for me to look it up) but each dollar the government spends usually adds more than what’s spent to the economy.
wj said,
July 27, 2011 at 10:08 am
Ice, not only is the debt ceiling a silly concept, it is one which has been shown to be utterly useless in practice. That is, it just gets raised, and has yet to have any impact on the budgets that Congress passes. Even now, it is having no impact on the budget that Congress passes.
All the current situation is doing is raising the probability that the President will get to choose which items (all of which Congress mandated spending money for) will not be paid. Which seems a bit of a counter-intuitive approach for a party which professes such a negative opinion of him. Maybe they figure to get buget cuts without having to actually vote for them themselves — in the hopes that the electorate, which will not be happy about them, will blame the President.
I’d hate to bet the ranch on that, which is what they are doing. Especially if I was one of the folks in Congress, and specifically in the Republican majority in the House, who is intelligent enough to have a clue just how badly that kind of massive cut now will hurt the economy. Which, I suppose, is yet another reason why I’m not a politician.
Sarah Rolph said,
July 27, 2011 at 10:13 am
“Those of us who want to NOT raise the debt ceiling believe that this is the only way to stop the spending.
What is your basis for this belief? I genuinely want to know. Because it seems to me that there are a number of other ways to reduce spending.”
There are certainly a number of other ways to reduce spending in theory, but in practice, as far as I can tell, the Obama administration is seriously committed to spending as much as it can get away with. It looks like the only thing left is to force their hand. Not a strategy I would recommend in general, but it seems to be the only thing left.
There is no evidence that they are interested in fiscal sanity. The same can be said for many of the Republicans. This is why the Tea Party is made up of a broad cross-section of people, including Democrats and libertarians.
By the way, the anti-spending movement has been around since before the Tea Party and before the Obama administration. Google PorkBusters if you are interested in learning more.
Ron said,
July 27, 2011 at 10:59 am
I know, I know, this one is from Jonah Goldberg at NRO, but it made me laugh:
Imagine you’re in a burning office building. Obama’s plan for getting out alive: “Okay, you guys break up into different groups and come up with a series of proposals about how we get out of the building. I will then negotiate with each of you separately and then together, and then separately. Then I’ll get on Skype and tell the world what I think of your respective plans and criticize you for their lack of seriousness. I will insist that we have balanced approach of applying both water to the fire and opening the windows, which some say will only provide more oxygen for the flames. But my base says window-opening is essential. Oh and I will blame all of the gasoline I threw around on the lower floors of this building on the guy who moved out two years ago. And I will veto any plan that requires we have a new plan should we get stuck on another floor. And, did I mention this mess was created by the former tenant and….ahhh what’s that smell?
karen said,
July 27, 2011 at 2:16 pm
I very proudly wrote ~Tax Cheat~ on my 1st Geitner signed 50$ today.
My husband bought a gun w/it:0).
I haven’t read all of the comments- my loss- but, i will later. What’s w/the Feast or Famine w/posts these days, eh?
As a farmer, they can take any subsidy they want from me- as long as they pay parity for my stuff. We had a blessing born the other day, a red and white heifer we maned Shania- cause she’s so hot!!!
We are in Recession– our priorities are just so upside-down, it seems.
Anyone remember when Obama said something like– “don’t judge me by the promises i make, but rather, by the ones i have kept”? What a freaking schmuck!
Sarah Rolph said,
July 27, 2011 at 3:35 pm
”
‘And I’m afraid they have not cut back on their catering bills or their private jets.’
Neither have the Wall Street and other corporate executives…”
The two things are not equivalent. Spending money you have earned (as corporate executives do) is entirely different from spending other people’s money (as the government does). For that reason, the two should be held to very different standards.
“Neither government nor big business is the good guys.”
I didn’t mean to imply either one of those is a good guy or a bad guy. I was pointing out that government spending is completely different from private spending, and I was replying to your question about what government should cut. Government should cut everything it can, it should cut to the bone, because by its very nature, government leaches money out of the private sector.
Only in a few cases, such as national defense, is this justified. In my view. There are those who believe that the government should take over all or most things, because the private sector is incapable, or inherently unfair, etc. I disagree with that assessment. Heartily.
The private sector is not made up primarily of “big business.” Small business is a larger portion of the private sector than big business. And of course the mix is constantly changing.
Some people in the private sector want to emulate the politicians. They would rather consume than create. They collude with politicians to get special deals; this is called “rent-seeking.” It is a form of corruption and is absolutely a huge problem. It’s one of the major reasons the government is so bloated.
These are the bad guys–the corrupt people in both sectors who want a free ride or a special deal. Yes, they are found in both political parties, for sure. That’s why the Tea Party is not partisan; we are anti-corruption and pro-small-government, we don’t much care about traditional party affiliation.
The good guys in the private sector are the people who earn their own way. The good guys in the public sector are the people who take their jobs seriously, provide value, and are not in it for the graft.
But these are two different kinds of good–morally they are both good, but economically, it will always be the case that an expanded public sector weakens the economy and an expanded private sector strengthens it.
Some people think it’s worth weakening the economy in order to get the perceived benefits of a socialistic system. President Obama appears to be one of them. That is a very serious problem. Socialistic systems (whatever you call them–central control, central planning, nanny state, social democracy, any system where the government is in charge of most things) have never worked and will never work.
For those who may be interested in my perspective on these issues, I recommend the book The Forgotten Man by Amity Shlaes. That’s where I learned the term “rent-seeking.” Shlaes does a fine job explaining all this (which topic, as I also learned from the book, is addressed by a field of study called public choice theory; Shlaes is a luminary in this field). The context is a history of the great depression. It’s an eye-opening book, and beautifully written.
amba12 said,
July 27, 2011 at 5:42 pm
I corresponded with Amity Shlaes a bit, we went to the same high school (at different times) and shared a beloved German teacher, whom we’re both still in touch with. I’d be very interested to read her book.
Spending money you have earned (as corporate executives do) is entirely different
I wouldn’t say they have earned it in cases where they’ve managed their companies badly and come out wealthier than before, whether through self-dealing or rent-seeking. You haven’t at all addressed my comment that profit-seeking can result in unemployment. When large, established firms (take the major phone and cable companies just for example — someone please name others) are not really producing value but are making profit by slashing costs in the form of jobs, service, and quality, and then execs are congratulating themselves with big bonuses by the measure of profit alone, how is that contributing value to society? Big business is not always the friend of small business either (e.g. the effect of Wal-Mart on town centers and local retailers). I am all in favor of innovators like the non-contract phone companies that are springing up to compete with the bloated giants, but generally speaking they don’t have access to the coverage/airwaves that could make them effective competitors; those are largely monopolized by Verizon, AT&T, etc., whose service is overpriced, automated, and atrocious. Now it is possible that some form of rent-seeking or favor-buying is involved in the licensing process, and that government has a big hand in what’s wrong with big business. Nothing should be too big to fail, and perhaps nothing could get that big without special favors — I don’t know. Maybe Amity can tell me.
Callimachus said,
July 27, 2011 at 5:50 pm
Stoned Soldier: Do you care if it falls?
Stoned Soldier: What?
Stoned Soldier: The Roman Empire?
Stoned Soldier: [laughs] Fuck it!
[Mel Brooks’ “History of the World Part 1;” a scene so brief I can’t even find it on Youtube, but it’s been stuck in my head all week every time I read a “debt crisis” story]
Tom Strong said,
July 27, 2011 at 5:55 pm
Sarah:
There are certainly a number of other ways to reduce spending in theory, but in practice, as far as I can tell, the Obama administration is seriously committed to spending as much as it can get away with. It looks like the only thing left is to force their hand.
Nonsense. There’s an obvious and non-theoretical alternative: win the Presidency and the Senate in 2012. Then you guys can cut all the spending you want.
Oh wait, that’s hard. Boo hoo. But you know what? The Democrats did it just a few years ago. And for all the bitching about the healthcare bill here and elsewhere – they accomplished passing it in a fully Constitutional manner, consistent with the history of the Republic, without forcing anyone’s hand.
Tom Strong said,
July 27, 2011 at 5:58 pm
I mean, let’s consider an actual counterfactual. The Democrats took over the House and Senate in 2006. What would the national reaction have been in 2007 if they had refused to raise the debt ceiling unless Bush agreed to sign a $3 trillion healthcare reform bill?
Sarah Rolph said,
July 27, 2011 at 6:47 pm
Thanks for the thoughts, Amba. I hope you enjoy the book. How fun that Shlaes is a correspondent of yours!
I didn’t address your point about unemployment because I wasn’t seeking to have an overall discussion of the economy. I’m not sure I understand your argument here, you seem to be implying that there is some structural way to avoid unemployment. Unemployment is always a possibility just as going out of business is always a possibility. Perhaps I am not taking your point.
Taking your example of the phone and cable companies, they provide value in two ways.
First, you and I get to have phone access and cable access if we choose to purchase it. If someone was not in business doing these things, we would not have that option. (And if the government took over the cable and phone companies completely, service would most likely suffer terribly, because government is not accountable; it doesn’t have the same incentive structure, since it doesn’t have to earn its own money, it drains ours.)
Second, as long as people do choose to purchase these products, the firms make money–if they don’t run them improperly–and that money allows them to hire more people, buy more things, partner with other firms, etc. All this adds to the size of the economy, an activity that lifts all boats. The more firms increase their profits, the more this happens. A thriving private sector is in everyone’s interest.
The fact that some people run their businesses in a way that is offensive is a separate issue. It would be nice if the people who decided to get rich on the backs of their customers would go out of business faster than the honest brokers, but it doesn’t always happen that way.
In the specific case of communications firms, however, the problem is definitely government regulation. It is not possible for me to purchase cable service from anyone but Comcast, because the government decided it should be that way. So Comcast, having a monopoly on this market, has no incentive to provide good service, and they have plenty of money to spend on an expensive branding campaign putting an axe in my brain (as the Cluetrain Manifesto puts it), and since they seem to be creeps they have created a lot of create customer-unfriendly business practices that make me loathe them. That will eventually bring them down, if that market is freed. The sooner the government deregulates that industry, the better.
Yes, Amity can tell you!
Sarah Rolph said,
July 27, 2011 at 6:52 pm
“Nonsense. There’s an obvious and non-theoretical alternative: win the Presidency and the Senate in 2012. Then you guys can cut all the spending you want.
Oh wait, that’s hard. Boo hoo. But you know what? The Democrats did it just a few years ago. And for all the bitching about the healthcare bill here and elsewhere – they accomplished passing it in a fully Constitutional manner, consistent with the history of the Republic, without forcing anyone’s hand.”
HUH? I thought we were talking about the present. You asked me an honest question and I gave you an honest answer. I meant right now. We have to get through the next year and a half. S&P is threatening to downgrade our credit now, not in 2013.
Yes, the plan is to win the Presidency and the Senate. I am definitely working on that.
Not sure what you are on about in your second paragraph. You will not catch me boo-hooing.
Tom Strong said,
July 27, 2011 at 7:10 pm
Sarah:
You’re right, that was an intemperate response on my part. I was angered by your casual remark about having to “force his hand.” For that at least, I apologize.
In my opinion, this is a manufactured crisis. That is not to say that I do not think there is a long-term fiscal problem that will require significant spending cuts – I do if that’s not already clear – but there is no need for them now, nor is there the political will to carry them out even if there were.
And so the gambit taken by the House Republicans, in attempting to force a massive spending cut, strikes me as profoundly damaging to our democracy and possibly to our economy. And given the supposedly Constitutional outlook of the Tea Parties, I find it incredibly hypocritical. I have never been a hard-line Democrat, but this is rapidly turning me into one.
There’s no point in us continuing this conversation. You will do your work and I will do mine.
Sarah Rolph said,
July 27, 2011 at 7:10 pm
Stephanie, I haven’t forgotten anything. You are making a separate point.
It is quite true that the money the government spends on real goods and services does benefit the economy in the same way that money spent by anyone else would. (It is not true that there is a magical effect that makes $1 of government spending worth more than $1; there is some widely-circulated hooey to that effect, but it is incorrect.)
The point I was making is at a different level. Although the money government gets its hands on spends the same way, it is not handled in the same way, or earned in the same way. Those processes are costs.
The people who send the checks to the government contractor are a cost–the people, the building, the electricity bill, the garbage collection, all of the things that are required to have a government agency that does that useful spending, these are costs to us, the taxpayers. (The government does not have its own money.)
The people, buildings, and services that are required to have a private enterprise do that same useful spending are paid for by that private enterprise. It comes out of their profits. They only stay alive as a business if they can earn more than they use to do business.
Since the public sector costs taxpayer money to run, draining the economy, and the private sector does not cost any taxpayer money (except for whatever messed up regulations and favors they manage to wangle through corruption, as discussed above), it is clearly advantageous to all for government to only handle the things it must handle, and leave everything else to the private sector.
There are many things the government must and should handle, such as national security. Your husband is probably working in an area like this, so I certainly don’t begrudge anyone a valid government-related paycheck. My husband also worked for a government contractor.
Sarah Rolph said,
July 27, 2011 at 7:20 pm
Tom,
Thanks for the kind words.
I think you are quite right that the crisis is in a sense largely manufactured. At least, most of the stuff that the politicians are fighting about seems to be manufactured.
Not sure why you want to discontinue the dialog. If you change your mind, I would be interested to learn why you think a massive spending cut would be damaging to our economy.
My view is that a massive spending cut will help the economy, because it will stop draining money away from the private sector, which is the only place that money can be made, which is the only thing that will help the economy.
amba12 said,
July 27, 2011 at 7:20 pm
Do you think that part of the government’s legitimate job is any kind of regulation at all? Could the free market handle, e.g., toxic waste dumping?
Sarah Rolph said,
July 27, 2011 at 7:23 pm
Yes, I believe the government should have a role in safety regulations.
But I do believe the free market can and does handle lots of dangerous things very effectively.
For example, the relatively unregulated market for laser eye surgery is not spawning any eye-killers that I know of, just lower and lower prices for better and better results. While the FDA is threatening to ban walnuts.
amba12 said,
July 27, 2011 at 7:40 pm
As I understand it (and I’m not sure), they’re not threatening to ban walnuts; they’re forbidding walnut producers to make any health claims on their packaging (which is almost as ridiculous). Why they can’t just have the asterisk with “health claims not evaluated by the FDA,” as with supplements, I don’t know (though why should they even have to have that?).
In a case where there is demand for a product or service like laser surgery, and where word of mouth can quickly separate the sheep from the goats in terms of quality as well as price, the market works brilliantly. In the case of something like toxic dumping, it is indirect and cumbersome for consumers to research the connection between, e.g., a Love Canal, those responsible for it, and the health problems it causes, and then promote a boycott.
All for admiring the market . . . wary of worshiping it.
Sarah Rolph said,
July 27, 2011 at 8:53 pm
Yes, I was exaggerating to make the point on the walnut thing; I figured you would get the reference. The quote I read was the FDA saying that making those true health claims makes walnuts a drug, and thus subject to FDA regulation, which iif it stood could lead to the same result as banning them.
Why indeed should they even have to have that–because it’s another case of government run amok, that’s why!
Yes, toxic waste is a tough problem, and a good example of the cases that make sense for the government to handle, for the reasons you point out. (And not only is it indirect for consumers to do this work, but they often get it wrong.)
Did anything I say sound to you like market “worship”?
amba12 said,
July 27, 2011 at 9:36 pm
Well . . . maybe “reverence.” A little bit the tone (connotation, not denotation) of “the market can do no wrong, the government can do no right.” Which has its reversed mirror image on the left. Maybe people are the problem, and bigness in anything compounds that problem (Lord Acton’s “power corrupts”).
That said, government’s freedom from accountability and consequences (except for getting voted out on their asses) is very dangerous. And when big businesses become free from accountability and consequences, look how often it’s government’s doing!!
Icepick said,
July 27, 2011 at 11:48 pm
I’ll buy that if you shut down all non essential services other than paying debt, it *may* be possible to continue servicing the debt, simply because I really don’t know- but I would suggest that you don’t either.
How much do you think debt servicing costs? If we had reached a point where tax revenue couldn’t cover that item alone, there wouldn’t be a point in discussing this topic – the entire economy would have turned to slag by then.
Icepick said,
July 27, 2011 at 11:49 pm
I very proudly wrote ~Tax Cheat~ on my 1st Geitner signed 50$ today.
My husband bought a gun w/it:0).
Sweet!
Icepick said,
July 27, 2011 at 11:55 pm
Ice, not only is the debt ceiling a silly concept, it is one which has been shown to be utterly useless in practice. That is, it just gets raised, and has yet to have any impact on the budgets that Congress passes. Even now, it is having no impact on the budget that Congress passes.
Just so.
Asfor the political analysis – I partly agree with that. However, I still don’t get the point where the President gets to tell everyone they have to do what he wants or he will veto their bills, BUT HE WON’T ACTUALLY TELL ANYONE WHAT HE WANTS. He has again and again REFUSED to provide specifics. Yesterday the press grilled the Press Sevretary about this for ten minutes. The PS wormed and wormed and wormed, but it became blatantly obvious that the White House will NOT provide details, while insisting everyone adhere to their details. I don’t get how that ISN’T the President’s fault.
Additionally, I might be more inclined to believe the Democrats actually cared about reaching a consensus or compromise if guys like Chuck Shumer and Harry Reid weren’t so obviously gleeful about the prospect of everything going to Hell so they can blame it on Republicans.
Frankly, the Hell with both of parties, but I don’t see why both shouldn’t be consigned to exactly the same circle of Hell.
Icepick said,
July 28, 2011 at 12:04 am
Finally, I keep seeing people claim that cuts to the budget now will hurt the economy. Well, no shit. But by that logic we can’t EVER make cuts because they will harm the economy. That is just as assinine a position as the idea that taxes (i.e., revenue) can never be raised, no matter what.
As it stands we are borrowing about 40 cents out of every dollar spent. Exactly when should we stop doing that if not now, before everything goes to Hell? And note that the credit agencies (who don’t have much credibility, but they’re all we’ve got) are threatening to down-grade our credit rating even if a deal passes, if that deal doesn’t include enough deficit reduction. So we’re facing the same financial pressures regardless of this fool’s game.
I stand by my position stated in the past: I don’t know exactly when the government’s finances will completely collapse, but it will happen sooner or latter. And by latter I mean sometime in the next ten years. The demographics are all wrong, the entitlement funding problem is becoming immediate, the economy has become a fetid pool, and most importantly, our leadership class is controlled by feckless fools owned by the looter class. We’re getting plenty of wealth redistribution from both parties, and both are redistributing the wealth from the middle class to the elites. We’re fucked, and that’s all there is to it.
Sarah Rolph said,
July 28, 2011 at 7:52 am
I understand your frustration, icepick, but in my view there is still hope. The Tea Party movement is not just a political development, it’s an awakening of the populace to the dangers you cite. We will oust that looter class and those feckless fools, and put things right.
Sarah Rolph said,
July 28, 2011 at 7:55 am
Thanks for the follow-up, amba, and for participating in this discussion.
Three cheers for civil discourse!
Icepick said,
July 29, 2011 at 8:14 am
Sarah, I would have more faith in the Tea Party if they had a plan. Are they ready to attack and slash at Medicare and Social Security? (Especially Medicare.) Because if they aren’t, then they aren’t really serious. And waste and fraud aren’t going to go anywhere near far enough to fixing the problems with Medicare.
Further, I am seeing in Florida that a lot of the Tea Party’s candidates are actually Republican Party insiders. We elected Tea Party favorite Marco Rubio to the US Senate – he’s so far on the inside of the state Republican Party that he was Speaker of the House in the state legislature. Daniel Webster, my new Congressman, was a long serving Republcan politician at the state level, and I believe the local level before that. In both cases, they are CAREER POLITICIANS. Why am I supposed to think that they aare anything other than the same kind of folks than the ones they replaced? (Although Webster has to be an improvement,demeanot-wise, over the excreable Alan Grayson.)
In short, if they’re going to elect the same scumbags we’ve been electing, what good is the Tea Party?
Sarah Rolph said,
July 29, 2011 at 12:08 pm
You are certainly right, icepick, that we will never get anywhere if we keep electing career politicians. I coined the term “professional politicians” a while back to make this point, and fell out of my chair laughing when President Obama used this phrase the other day in a very different sense (saying we should trust the professional politicians and not our own foolish minds).
The thing to keep in mind is that the Tea Party is not a political party. It isn’t even an organized group, it’s a grassroots movement. We agree on a few fundamentals, but we are very diverse. This kind of loosely coordinated grassroots movement couldn’t possibly have a plan, but we have principles, and I think we are making a difference in the culture.
Some of the teaparty groups are very organized, like the one in Utah. and it sounds like they do have a plan, beginning with taking over the state Republican party, which they are apparently making good progress on.
I hear you on the topic of turncoat teapartiers (or teaparty lite, whatever you want to call it). Two words; Scott Brown. But even Brown the apparent squish is better than the alternative we were facing. And at least they are paying more attention to us that they used to. We have to keep the pressure up, nobody said this would be easy, or change overnight. This is a long-term effort.
A lot of the teapartiers are getting involved in local politics now, including running for local office. That’s not very visible, but it is important.
In short, what the Tea Party is good for is waking people up, encouraging them to get involved, and increasing awareness of the real problems that are facing our country.
If we want to elect honest, hardworking people instead of scumbags, we have to find honest, hardworking people who are willing to work in government. That’s not a small problem, so it will take time. I urge you to get involved in finding and electing good candidates. Or run for office yourself. We can’t sit back and look to anyone else to do that, including the Tea Party.
To answer your specific question, I do think most teapartiers understand the need to slash entitlements. I haven’t heard anyone in the Tea Party suggest that eliminating “waste and fraud” is enough.
I think the Paul Ryan plan is a decent start, although the cuts are quite mild, just a tiny starting point. But he tackled the problem head-on, and I think most sensible people agree with the essence of his proposal, that we need to phase these things out, making a cut-off at some age, continue giving benefits to the people who have been counting on this program and are already old (since they have been paying into their whole lives), but warn everyone else now that it is going to change, then change it.
But look how much Ryan was demonized for this very mild starter plan. And how the media lied about it all day long. It is going to take a while to change the political culture. It’s going to be hard work, and the people in the trenches are not going to win any popularity contests. But it must be done, and it will be done. I hope you will join us!
karen said,
July 29, 2011 at 2:11 pm
So, i’m understanding that if the TParty candidates vote for the (Boenher?) bill, then they’ll be going against their promises to the people who voted them in and may wind up not even becoming professional– i don’t mind professional(i just can’t stand slimey and untrustworthy)- politicians.
Anyway- the Right should all get on board(get their asses in line), vote ~yay~ for the Republican bill- let the Dems vote against and/or Obama veto, and have done their very best. Then the world will have to admit who actually let the people of America down.
Dems.
karen said,
July 29, 2011 at 2:15 pm
“It is going to take a while to change the political culture. ”
You have more faith than i, Sarah. God bless you.
chickelit said,
July 29, 2011 at 3:11 pm
I think the Paul Ryan plan is a decent start, although the cuts are quite mild, just a tiny starting point.
I think so too. The debt problem doesn’t have to be solved overnight. What needs to change immediately is the perception that it is growing out of control. Even a slowing in growth would have enormous psychological importance and must preceed reversal of the trend in any case.
Icepick said,
July 29, 2011 at 4:43 pm
The Ryan Plan was very weak stuff. The key components were wishful thinking on how fast the economy would grow (he had absurd employment projections by 2015, UE even lower than the height of the recent bubble economy), pushing a lot of the cost of Medicare onto seniors without doing anything to try and slow medical inflation, and other flim-flam. And it still wasn’t even close to large enough in terms of savings.
Saddest of all, it remains the best plan put out by any of the pols currently in office. (I believe the Simpson-Bowles Plan was probably a little better. But the thing with those kind of commision plans is that no serving politician would ever go for that stuff. That’s why they always put out-of-work pols on those commisions.)
As for getting honest folks to run for Congress – good luck finding such that could get elected.
One last thing – as I mention on another post above, the Tea Partiers have choosen the wrong fight at the wrong time. They should have held the line during the budget battle, and just raised the debt ceiling now. As it stands they now have the entire financial elite of the world arrayed against them, and every pol those guys have bought. They WILL wreck the entire world economy to make certain they get paid. They have done it in the recent past when their bluff got called (“Remember the Lehman Brothers!” H.M.M.M. Not as pithy as “Remember the Maine!” Maybe just “Remember the Lehman!” Nah, sounds too much like The Bernanke.)
They’re going to lose in anything bad happens, their power will be broken, and their will be a good chance that Obama ends up with a super-majority for a second term.
Sarah Rolph said,
July 29, 2011 at 6:54 pm
Good analysis, icepick, thanks for sharing it.
Icepick said,
July 29, 2011 at 8:13 pm
FWIW, I initially liked the sound of the Ryan Plan, even though I knew the number on the “savings” wasn’t big enough. It wasn’t until I (and others) dug into it some that it became clear that the plan was more wishful thinking than serious budgetting.
karen said,
July 29, 2011 at 8:25 pm
“As for getting honest folks to run for Congress – good luck finding such that could get elected. ”
Allan West.
Go West. :0).
karen said,
July 29, 2011 at 8:54 pm
POWERLINE PRIZE #2: “Don’t You See?”
No linky thing from me, but found on Instapundit. Pretty relevant.
Icepick said,
July 29, 2011 at 8:59 pm
A linky thing for Karen.
karen said,
July 29, 2011 at 9:13 pm
Thank you!! How about another, ice??
Also seen on Instapundit: Candidate Obama vs President Obama- the great debate. It’s from Breitbart TV and so accurate on exactly how i feel about Obama.
“We don’t think these two are ever going to agree.”
This is hope and change we can all believe in, eh Tom Strong?? And you blame the Tea Party Conservatives for not wanting to raise taxes when we have this chameleon in the highest office of our Land??
Icepick said,
July 29, 2011 at 9:22 pm
H.M.M.M.M. Let me see what I can do.
Linky thing.
And you’re welcome.
Icepick said,
July 29, 2011 at 9:26 pm
Egh. I just can’t listen to that man’s droning voice for more than a few seconds any more. I don’t think there’s been I President whose voice I didn’t get sick of almost immediately since the first President Bush. He was tolerable because of the Dana Carvey-ness of it all.
“Not GON – na!”
karen said,
July 29, 2011 at 9:56 pm
Aw, ice. It’s not all that bad– it’s worth it just to see how a master liar forms his words so they roll off’n the tongue, just so.
Got this off Anchoress:
“UPDATED (thanks, Frank):
“The fact that we are here today to debate raising America ’s debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America ’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
– Senator Barack H. Obama, March 2006”
I’ve heard if often enough, but- as they say- you just can’t make this stuff up.
Night, ice and family:0).
Icepick said,
July 29, 2011 at 10:14 pm
Peace out, Karen and family.