This hasn't been a easy time for President Obama, nor one that makes reelection look like a snap. But the past several weeks have given Congressional Republicans equal ownership of the economy and that can't be bad. One New York Times analysis looks like this:
If anything positive for Mr. Obama has emerged from this week’s debt and deficit turbulence, it may be that Republicans are acquiring a measure of responsibility for the nation’s economic woes, a consequence that Senator Mitch McConnell, the Republican minority leader, has publicly fretted about. Their stake increases in tandem with any tangible economic damage that would result from a potential government default or credit-rating downgrade.
“They have jumped into the co-pilot seat,” said Geoff Garin, a pollster for Democratic candidates. “There’s no version of a good economy a year from now, but we’ll have a big debate about who owns the bad economy.” ...NYT
Boehner and McConnell have created a "lose-lose" situation and are left with an increasingly divided party. The tea partyers, until now a curiosity, have become a serious threat -- to their own side.
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Kathleen Parker (no "librul"!) writes in the Washington Post that "hubris is no one’s friend, and irony is a nag. The Tea Partyers who wanted to oust Barack Obama have greatly enhanced his chances for reelection by undermining their own leader and damaging the country in the process."
Take names. Remember them. The behavior of certain Republicans who call themselves Tea Party conservatives makes them the most destructive posse of misguided “patriots” we’ve seen in recent memory.
If the nation defaults on its financial obligations, the blame belongs to the Tea Party Republicans who fragged their own leader, John Boehner. They had victory in their hands and couldn’t bring themselves to support his debt-ceiling plan, which, if not perfect, was more than anyone could have imagined just a few months ago. No new taxes, significant spending cuts, a temporary debt-ceiling solution with the possibility of more spending cuts down the line as well as action on their beloved balanced-budget amendment to the Constitution.
These people wouldn’t recognize a hot fudge sundae if the cherry started talking to them.
She goes on to call a spade a spade, remembering just what this artificially created "tea party" has been created from. She names names.
They include, among others, media personalities who need no further recognition; a handful of media-created “leaders,” including Tea Party Nation founder Judson Phillips and Tea Party Patriots co-founders Jenny Beth Martin and Mark Meckler (both Phillips and Martin declared bankruptcy, yet they’re advising Tea Party Republicans on debt?); a handful of outside groups that love to hurl ad hominems such as “elite” and “inside the Beltway” when talking about people like Boehner when they are, in fact, the elite (FreedomWorks, Heritage Action, Club for Growth, National Taxpayers Union, Americans for Prosperity); and elected leaders such as Minnesota Rep. Michele Bachmann, Ohio Rep. Jim Jordan, head of the Republican Study Committee, and South Carolina Sen. Jim DeMint, who grandstand and make political assertions and promises that are sheer fantasy.
This may be all the confirmation we need that Obama's effort to look like "the adult in the room" may well have succeeded.
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The McClatchy group represents for many quality reporting in a bunch of not-so-big towns across the country. It's always instructive for those of us who believe the future doesn't spring from a belly-button on the east coast to see what weight McClatchy's Washington bureau gives to each element in the day's news. Biggest headlines? Today they represent a fall-off of interest in the political process and more with potential economic fallout.
Lawmakers trying to reach a deal on spending cuts in order to raise the nation's debt ceiling risk causing serious economic harm if they cut government programs too much in the near term, economists warn.
The U.S. economy grew at an anemic 1.3 percent rate from April to June, the Commerce Department reported Friday. It also revised downward the growth rate over the first three months of 2011 to just 0.4 percent.
Despite the weak growth, politicians aren't arguing about stimulating the economy; rather they're debating how quickly and how much to cut spending, thus shaving economic growth in the process.
The economic outcome of this concocted "debt ceiling crisis" is far more important in the long run than the political posturing.
While Republicans in the House of Representatives capture headlines by demanding steep spending cuts, the version proposed by Senate Democrats actually would thwart economic growth potentially more, according to two economic research groups.
Macroeconomic Advisers, a leading forecaster, said Thursday that a rewritten plan offered by House Speaker John Boehner, R-Ohio, would shave more than a tenth of a percentage point off of growth next year, while the plan being pushed by Senate Majority Leader Harry Reid, D-Nev., would cause an even larger hit on growth in fiscal 2013 — shaving almost half a percentage point.
That view was shared by Thomas Lam, Singapore-based chief economist at OSK-DMG, a joint venture of Malaysian securities firm OSK Holdings Bhd. and Germany's Deutsche Bank AG.
"Our calculations ... suggest that the Senate and House proposals, respectively, could lower economic growth on average by less than 0.5 percentage points, all else equal, over the next five years (from 2012 to 2016)," Lam said in a research note that suggested the Senate Democrat plan would hit the economy harder.
Mark Zandi, fortunately for Democrats, is given the final say about the deep cuts proposed by Republicans.
"I think the idea is a very serious policy error," he said. "This would be the fodder for another recession. The economy may be able to digest $25-30 billion more (in federal spending cuts) ... but $100 billion, I don't think it could digest that."
Zandi, who's frequently cited by Republicans and Democrats alike, favors spending cuts "when the economy is off and running," but he cautions that "to add more fiscal restraint in the latter part of 2011 and 2012 would be a mistake."
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Business and finance reporter, James Surowiecki, blows the artificial debt crisis itself out of the water.
The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn’t risk economic chaos—namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he’ll end up violating the debt ceiling. ...
...Instead of figuring out ways to raise the debt ceiling, we should simply go ahead and abolish it. The U.S. economy has plenty of real problems to deal with. We shouldn’t have to wrestle with ones we’ve created for ourselves.
Yeah, sure. But that doesn't deal with the nasty truth at the center of the issue. With the conservative's pretense of being, as Surowiecki puts it, "Ulysses protecting himself from the Sirens by having himself bound to the mast," it turns out that the conservative is really calling for controls on others' spending, not his own. The most profligate spending -- the spending most likely to profit the spender and hurt the country -- occurs during Republican administrations. Now they're calling for others to bind themselves to the mast.
In reality, debt-ceiling votes merely perpetuate the illusion that balancing the budget is easy. That’s why politicians like the debt ceiling: it allows them to rail against borrowing more money (which voters hate) without having to vote to cut any specific programs or raise taxes (which voters also hate).
It's that voters' hate part which probably dooms the Republicans. It all comes down to which is more appealing to most of us: finding ourselves tied to that mast or having our cake and eating it too.
I think what the street-level economy is showing right now is that individual Americans have "learned a lesson" and are being more careful about their own money even as they continue to favor receiving full value from government programs like Social Security, Medicare, and Medicaid ... along with any additional government spending that comes back their home towns, farms, and schools. For all the worthy talk about belt-tightening, the home truth continues to be that we want get the value of our taxes back.
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A quick note here about a constant misperception of "middle America's" hatred of "foreign aid" when foreign aid represents a tiny portion of government spending in any accurate chart. But out here, "foreign aid" includes most of the money spent on Iraq and Afghanistan minus the pay for "our soldiers." When "foreign aid" is defined as many Americans define it, many Americans are right, not wrong.
