Archive for the ‘debt-ceiling’ Tag

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Ezra Klein “When it comes to the debt ceiling, the White House has a credibility problem. Their plan is to simply refuse Republican demands to negotiate over the debt ceiling. But for that plan to work, Republicans need to believe the White House won’t negotiate over the debt ceiling. Otherwise, they’ll refuse to raise the debt limit, assuming that as we get closer to actually breaching the ceiling, the White House will be forced to the table.

At the moment, Republicans don’t believe the White House. Nor does the media. Or, really, anyone. This White House is seen as almost congenitally unable to resist negotiations. At today’s news conference, Bloomberg’s Julianna Goldman put the question directly to President Obama:

‘I just want to come back to the debt ceiling, because in the summer of 2011, you said that you wouldn’t negotiate on the debt ceiling, and you did. Last year, you said that you wouldn’t extend any of the Bush tax cuts for the wealthy, and you did. So as you say now that you’re not going to negotiate on the debt ceiling this year, why should House Republicans take that seriously and think that if we get to the one-minute-to-midnight scenario that you’re not going to back down?'”

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/14/on-the-debt-ceiling-the-white-house-has-a-credibility-problem/

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Quote of the Day   2 comments

Nobel prize-winning economist Paul Krugman on Sunday explained to Wall Street Journal columnist Peggy Noonan that she was wrong to slam President Barack Obama for not compromising with Republicans on the debt ceiling because you don’t negotiate with “hostage takers” who are trying to “blow up the world economy.”

“The White House position, which is right, is that there should be no bargaining over this,” Krugman told a panel on ABC’s This Week. “If the Republican majority in the House wants to cut spending, let them propose legislation that cuts spending and pass it, not hold America hostage.”

“We should not allow this to become or be thought of as a legitimate budget strategy,” Krugman warned. “This is hostage taking, this is walking into a room and saying, ‘I’ve got a bomb, give me what I want or I’ll blow up this room.’ This has never happened before and should not be allowed to happen.”

“This is much scarier that the fiscal cliff because we don’t know what it does,” he continued. “What we do know is that U.S. government debt is the global safe asset. It is what every financial transaction relies on as the ultimate, this is what value consists of — and better than gold, better than anything. U.S. Treasury bills are the thing. If they are called into question, nobody knows what happens.”

Noonan, however, insisted that the president “should be sitting down and talking with those who would attempt to move forward on spending.”

“I consider it unusual that this president can never make a deal with those folks,” she opined.

“This is not something you negotiate over,” Krugman shot back. “You do not negotiate with hostage takers. That’s the White House position. They’re right about that. You just don’t negotiate on this. You can negotiate on the sequester, you can negotiate on taxes, but not on someone who is threatening to blow up the world economy if he doesn’t get his way.”

“My goodness,” Noonan replied. “That appeared to be the White House position on the fiscal cliff just a month or two ago. Why can nothing ever be worked out? We do have a president, we do have legislative leaders, we do — it should be noted — have a spending crisis in America. It is not an eccentric thing to worry about the amount of spending that America does.”

“You don’t do it this way,” Krugman disagreed. “This is a doomsday, this is really saying, ‘I will blow up world unless you give me what I want.’ And you don’t negotiate on that.”

http://www.rawstory.com/rs/2013/01/13/krugman-schools-noonan-dont-negotiate-with-republicans-who-want-to-blow-up-the-world/

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Ezra Klein “In a letter co-signed by Senate Majority Leader Harry Reid, majority whip Dick Durbin, vice chairman of the Democratic Caucus Chuck Schumer, and budget committee chairwoman Patty Murray, the four Democrats, presumably on behalf of their caucus, ask President Obama to ignore the debt ceiling when the time comes:

‘It is hard to imagine that the Speaker and Leader McConnell would really follow through on their threat to let the nation default on its debts. They are responsible leaders who know better. Sadly, some of their Republican colleagues do not. There, we believe that you must make clear that you will never allow our nation’s economy and reputation to be held hostage. In the event that Republicans make good on their threat by failing to act, or by moving unilaterally to pass a debt-limit extension only as part of unbalanced or unreasonable legislation, we believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global crisis — without congressional approval, if necessary.’

They’re saying, for the record, that the majority party of the U.S. Senate will not consider it an executive power grab if the president takes unusual action to avoid default.”

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/11/senate-democrats-to-obama-ignore-the-debt-ceiling/

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Stephen Colbert “We should have known a coin was Obama’s solution to everything. It was right there in his slogan, change.”

http://www.colbertnation.com/the-colbert-report-videos/422658/january-07-2013/the-platinum-debt-ceiling-solution

My letter to Speaker John Boehner   Leave a comment

Dear Mr Speaker,

As a citizen of the Unites States of America, I am saddened by the way our government is spending so much time and money fighting itself.  I am writing to you, in vain hope that you may be able to improve this situation.  When you say no deal will be reached by January first to avoid the upcoming tax rise, it makes me understand why Congress has such low approval numbers.  We the citizens are tired of you guys fighting each other.  You can tell what the people of the United States want, by the way we elect our representatives.  If you hold a rigid ideology that works against our will, how could you know that you are doing the right thing?
In the debt ceiling debacle Congress spent 18.9 billion dollars on nothing.  No one got tax breaks with that money.  No one got any benefits.  No infrastructure was built.  It was thrown away on a stupid political argument.  Nothing more, and nothing less.  Since you are on the verge of doing the same thing again, I feel I must write to you and implore you to stop.  When everyone’s taxes go up on January first, money will come out of the economy.  The extra 10 or 15 dollars in my paycheck that I no longer have, will not be spent in our economy.  When you add me to the millions of other Americans, it is obvious that it will begin to shrink our economy immediately.  If you think this contraction is good for America, please continue on your present course.  If you think America should be expanding and growing, please seriously reconsider your position.  We can turn this economy around if we work together.  As the poet once said, divided we stand, together we rise.

Thank you for taking a moment to consider my position.

Sincerely,

Tim Lewis

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Ezra Klein “Republicans won in 2010, and they leveraged that win to secure the roughly $1 trillion in cuts in the Budget Control Act. Democrats won in 2012, and they intend to leverage that win to secure the roughly $1 trillion in revenue from the expiration of the high-end Bush tax cuts.

After that’s done, the White House is proposing another $600 billion in spending cuts and another $600 billion in tax increases. Add in the $1 trillion or so in expected savings from ending the wars, and you’ve got about $4.2 trillion in deficit reduction over 10 years. Add in the savings on expected interest payments and you’re at almost $5 trillion. Subtract the White House’s stimulus request, and you’re somewhere a bit north of $4.5 trillion. That’s their opening bid.

But that’s not all: There’s also a proposal to end debt-ceiling crises forevermore.

The idea comes from a most unlikely source: Senate Minority Leader Mitch McConnell (R), who proposed in July 2011 to permit the president to unilaterally raise the debt ceiling unless Congress affirmatively voted to stop him. And even if Congress did vote to stop him, the president could veto, and then Congress would need to overturn his veto.

The effect of this policy would, in general, be to finish off the debt ceiling. Republicans are laughing this off as a ridiculous, pie-in-the-sky proposal. McConnell abandoned this plan shortly after he proposed it, and he certainly doesn’t support it now. But it’s actually a great idea — one that could do more to protect our economy than anything else in the debt deal. Even better, it would cost us nothing. Measured by its cost-effectiveness, it’s perhaps the best idea in American politics today.

The debt ceiling is an anachronism. It’s an accountability mechanism from the days when Congress didn’t much involve itself in federal budgeting. Today, Congress exerts full control over the federal budget. The debt ceiling isn’t imposing accountability on the executive but calling into question whether Congress will pay the bills it has already chosen to incur.

But it’s not an adorable anachronism, like grandfather clocks. It’s a dangerous one, like bloodletting, lobotomies and burning people you suspect to be a witch. If we crash through the debt ceiling, a global financial crisis could — and likely will — result. Even once we return to sanity and begin paying our bills again, America’s borrowing costs are likely to be permanently higher, and the market’s confidence in our political system is likely to be permanently harmed. The Bipartisan Policy Center estimates that the near-miss we had in 2011 cost us $18.9 billion. That’s $18.9 billion we spent for no reason. It didn’t buy us one service or lower taxes by even a dime.”

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/30/the-best-idea-in-american-politics-kill-the-debt-ceiling/