Saturday, June 04, 2011

Getting The GOP To Agree


Walter Shapiro of The New Republic is disturbed, legitimately, that President Obama has failed to explain in public the danger of failure to raise the debt ceiling. Along with a media which lacks debt ceiling visuals and therefore avoids explaining the consequences of such fiscal irresponsibility on a grand scale, the President bears responsibility for overwhelming opposition of the public to raising the ceiling. Obama's apparent disinterest contrasts with that of Reagan, who once warned “the full consequences of a default, or even the serious prospect of default by the United States, are impossible to predict and awesome to contemplate.”

Alas, the GOP these days, while wrapped fully in the mantle of Reagan, is bidding a hasty retreat from the center-right policies of the 40th President, a vacuum filled instead by the 44th President.

Lamenting the lopsided nature of the House vote refusing to raise the debt ceiling to $16.7 trillion to avoid a default on August 2, Shapiro suggests that only by "eviscerating Medicare" would a sufficient number of Republicans opt for lifting the ceiling. ( Exactly every Republican- and this, in the party which promotes individualism!- voted "no.")

It is true that Republicans, left to their own devices, would not shrink from the challenge of bringing to a halt an economy which their benefactors on Wall Street were not quite able to accomplish. Perhaps they are thinking: "with just a little more effort, we can do what they tried to do, but were barely unable to accomplish."

But the GOP does not act alone but responds to the business community- in which the Chamber of Commerce actively supports the increase in borrowing authority, albeit hoping that spending cuts accompany it. That lends support to Digby's opinion that Republican leaders are bluffing.

But why leave anything to chance? Seventeen GOP Senators, led by Jim DeMint and Pat Toomey, have sent to Treasury Secretary Geithner a letter (text here) arguing

At issue is the stubborn fact that ultimate responsibility to use available Treasury funds to honor the debt obligations of the United States falls on you as Secretary of the Treasury. We believe it is irresponsible and harmful for you to sow the seeds of doubt in the market regarding the full faith and credit of the United States and ask that you set the record straight – that you will use all available Treasury funds necessary to prevent default while Congress addresses the looming debt crisis.

So Senate Republicans- and, in all likelihood, their House comrades- are concerned about a debt default, hence a failure to raise their ceiling. They are worried that creditors won't get paid. That would include U.S. banks and foreign investors.... with Communist China holding 20.4% of the debt held by foreigners. Fortunately, legislation to that effect, introduced by Toomey, has been defeated in the Senate, notwithstanding the unanimous support of Republicans. (And this, in the party which promotes individualism!)

Nevertheless, it would be nice to see the President of the United States, the very eloquent disciple of Ronald(6) Wilson(6) Reagan(6), use the bully pulpit to inform Americans that the other party wants banks and the Chinese to be paid while the middle class suffers. Then, Democrats in Congress ought to introduce legislation to provide that the sacrifice be made first and foremost by those investors, especially from abroad, but including domestic interests while the needs of the American people are accomodated.

The GOP has spoken loud and clear about its priorities. It's time for the Democrats to do the same. But it needn't be done for spite or political advantage, rather because it is the most likely way to get the GOP on board to save, rather than destroy, the economy.


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