Wednesday, June 8, 2011

No Dealing On The Debt Ceiling, Part 15

Here is the basic problem with the GOP position on the debt ceiling, as demonstrated by GOP Rep. Paul Broun of Georgia.

"We have created this huge debt. […] We’ve got to stop the outrageous spending that’s going on. We hear the CBO says well if we don’t raise the debt limit, it’s going to put so many people out of work, I don’t remember then number, I think it’s 250,000 or something, are gonna be put out of work. Well those are gonna be government employees that are put out of work. There are a lot of government employees that need to go find a real job!"

To recap, a government employee currently collecting a salary from taxpayers is saying he'd rather see 250,000 Americans get laid off indefinitely or lose their jobs than raise the debt ceiling, because government employees are not real Americans, they are instead uniformly evil parasites who must be shunned, reviled, or eliminated when possible.

The fact that Paul Broun hasn't been run out of office for saying "Get a real job!" to teachers, firefighters, police officers, mail carriers, park rangers, etc. is lamentable.

So when Republicans stigmatize all government workers, who will they scapegoat next?

But that's only half the problem.  The other half is even other Republicans are warning that failure to raise the debt ceiling could have catastrophic, permanent repercussions on our economy, Republicans like former McCain-Palin economics man Doug Holtz-Eakin.

"It's a bad idea," Holtz-Eakin said at a panel discussion of former CBO heads in Washington. "Little defaults, big defaults; default's a bad idea period and there should be no one who believes otherwise."

He's not the only one:

Rudy Penner, CBO director under President Reagan, also slammed the suggestion that default was anything but dangerous.

"The dumbest thing to do would be to default even for one day right at this point," he said. "I don't see much good coming out of these notions that somehow if we got a big budget deal it would be OK not to pay interest for a few weeks or few days."

Penner added: "It's playing with matches around gasoline as far as I'm concerned and would be an incredibly stupid thing to do."

Robert Reischauer, CBO director under Presidents Bush Sr. and Clinton, said while he could envision a scenario in which a sudden plunge in the stock market shocked both parties into compromising on a deal, it was too unstable and dangerous an approach to trifle with.

"Do I advocate that? No," he said. "Do I think that's risky? Yes. But we're looking for adult behavior here and seeing none. "

I've long said that the economic giants in the country aren't going to let the Republicans blow up the bond market.  But August is only two months away, and there's no sign that the GOP is going to do anything other than continue their hostage taking.  It's time for the economic powers that be to step in, and I truly believe they will do so, and very soon.

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