The administration and its media allies are ramping up the pressure on Republicans determined not to vote for another hike in the debt ceiling without a meaningful agreement from the White House about entitlement reform and cutting spending. The president is refusing even to talk to the GOP about any deal in order to gain their assent for expanding the government’s ability to keep running up the debt and trying to paint them as insensitive misers who want sick children to suffer. In response, some conservatives have argued that the apocalyptic talk about the impact of a failure to reach an agreement about the debt ceiling is absurd hyperbole since what would follow would not be a default in any real sense. But now some of his allies in the media are going one step further by branding those who have said such an eventuality can be managed without the government failing to meet its obligations as “debt deniers.”
The term denier is a loaded one in contemporary political discourse. In common usage these days, deniers aren’t merely people who say something that others believe is not true. They are troglodyte reactionary haters who don’t accept the scientific community orthodoxy about global warming or, even worse, claim the Holocaust never happened or that 9/11 was an U.S. government or Israeli plot. Yet “Default Deniers” is the headline Politico placed on an article devoted to examining the views of people Like Pennsylvania Senator Pat Toomey or Utah Representative Jason Chaffetz. Conservatives were allowed to defend their thesis about the consequences of not raising the debt limit in the article even though the thrust of the piece was aimed at portraying Toomey, Chaffetz and those who agree with them as extremists determined to ruin the country for the sake of their ideology. But the use of this sort of language about their views is about an effort to avoid discussion about the merits of the arguments on this issue and to cast aspersions about the motives of those who oppose the president’s desire for a blank check to keep spending.
The views of those who see a halt to the routine raising of the debt ceiling are debatable. Their strongest argument is that even if it were not raised, the government would still have plenty of money to pay many off its bills but would have to prioritize which of its obligations would be satisfied first. That would mean debt payments and Social Security checks could still go out. Proposed legislation that would set those priorities would ensure that there would be no default even after the ceiling was reached.
However, critics are right to note that such a path would still upset the markets and the uncertainty might trigger a number of unforeseen circumstances that could adversely impact the economy. As even Toomey concedes, forcing the government to operate without an increased debt limit isn’t desirable. That’s why many conservatives worry that playing the debt ceiling card is a political error that can only hurt the GOP and help President Obama without doing the country much good.
Yet the attempt to brand those Republicans as extremists or to use the “denier” label on them is merely one more effort to avoid having a debate about government spending. Contrary to the president’s assertion that raising the ceiling is just a matter of Congress paying its bills, this is about an effort to end Washington’s practice of unchecked spending. Though it is politically perilous, it is the only method in sight to call the president to account for refusing to negotiate real spending cuts.
Rather than come down off his high horse and deal with the country’s chronic spending problems, the president has sought to demonize the other side in this discussion. But if you call your opponents deniers or even terrorists, as many liberals have labeled conservatives who want to stop the spending orgy do, you don’t have to talk with them or even discuss the issue. While the outcome of a default is uncertain and possibly dangerous, refusing to talk about the issue is a formula for fiscal catastrophe in the long run.
Obama's strategy is to demonize and blame Republicans, with his eye on sweeping the House and Senate in 2014. If you think Obama is bad today, justvwait what he will do if he has toal control for his ast two years! nThe Republican strategy should be to let Obama hang himself. Abstain on the debt, makes sure that obama gets bamed for lack of job growth, for inflation, for the skyrocjeting costs if healthcare. Avoid thecapearance of being obstructive. nAbove all start to create signicant constructive proposals. – a luxury that only the out of power party can pursue. And start providing something for the Voterser to likevabout Republicans. nFor example nPropose a $1.000 online degree so that anyone can work his or her way through ollege without the need for a loan nPropose that every inner city kid gets a laptop that she can take home, to how their arents, andvas an alternative to mind numbing TV. It will only work on the school WiFi so it has no value forvthieves. Why was this only considered for under-developed countries? Because the NEA is terrified, nLets stop worrting about billion people countries such as China and India and turn to the 900 million npeople in North and South America,. Let us kearn from te EU about motivating countries to clean up their act to allow legal immigration – andcuse that as a basis for real immigration reform nPropse a government equivalent of FASB to bring somevsanity to government accounting andvrequire governors, mayors andvthe president to sign for complance. nPush hard to improve government efficicincy with a start in reducing the unmanageable 15 member cabinet down to six. n. nLets give the Democrats something to get them worried in 2014" when Obama crashes and burns! nAbove all lets not put up a futile defense
n nThe best case scenario from default: nNothing much happens, a few days later the debt ceiling is raised and we go back to where we were. n n========================================================================= n nTHE WORST CASE SCENARIO FROM DEFAULT: n nUnemployment rises to over 25%, n nthe labor force participation rate falls from 63.5% to 40%, n nT-bill's pay 10% or more instead of less than 1/10 of 1% now, n nat least ten million families lose their homes, nReal Estate values fall 5% in less than two weeks and nReal Estate values fall 50% over five years, n nALL OF OUR BANKS AND INVESTMENT BANKS GO BANKRUPT, nMore than half of all insurance companies go bankrupt, n nThe S & P 500 falls 90%, with a 20% drop in less than 5 business days, n nand gold goes to $3000 an ounce. n nNearly all these disastrous consequences happen very fast, for the most part in less than a month. n nThe dollar cost of recovering from these disastrous consequences would have to be at least 3 times the GDP, more likely 4 times the GDP — $60 trillion — $200,000 per capita. But Republicans wouldn't vote for that, n nThree generations later in 2070, USA GDP gets back to the GDP of 2007. nMaybe, maybe not. n nArgentina had the highest per capita GDP, income, and wealth in the world during WW1. But never again since. n nI am a CPA making my living by trading my own account at discount brokers. I have really thought this through, which our Republican Congressmen and Women have not. Please call or write your Congressman and ask them to raise the debt ceiling with a clean bill. Please convey to them the worst case scenario describe above, which they appear not to have taken into consideration at all. n
I'm a Denier and proud of it, and explicitly embrace the concepts that I actually do HATE both the policies and people I oppose, would be delighted to treat them as harshly as can be imagined, and have no interest in their concerns, and might find the majority of society including its government feeling exactly the same about me. Let Civil War begin, it's better than national suicide. n nClimate changes all the time, to the convenience of some and the suffering of others. Big deal, it's just something important that changes that people as individuals are powerless to control. Most stuff is exactly like that anyway, what's the big deal with this one? n nI would attempt a more respectful approach as regards those who disagree if they would as well. nFor example, the deal about climate or the holocaust isn’t about what happened or is happening, it’s about why and who are involved, what the choices are, who gets to be involved in, benefit from, or pays for those. Same with the debt. The Public owe more than the Nation owns or can be expected to own or earn. This can continue as long as all the things that paralyze growth and employment are to be tolerated, such as the trade deficit, the value-losing dollar, the unprofitability of savings, the extent to which spending (all, not just Public) goes to everything but the basic needs of the present and the future, the likelihood that someday the military and political stability of America may drop to the point others won’t carry our debts, and the inability of our political system to make choices. n nEven the much-noted (on both sides) Obamacare is a crazy patchwork unlikely to accomplish anything but it’s clear core premise, getting most health consumers into being in or at least feeling that they are in the same boat. That’s because either lots more money, lots more force, or some miracles will have to be added before there is any of more care, broadened availability of care, or more affordable care. n nThis whole state of affairs is almost universally unsatisfactory. We cannot compromise as neither side will. We can’t obtain a decisive victory by existing constitutional means. The populace itself is too wedded to values property entitlements rights or whatever one chooses to call their expectations, and the sum of the expectations is too impossible to achieve, so eventually we shall have a huge explosion of chaos and anger. n nTheoretically almost everyone could toss in a big chuck of what they think is right or theirs, so as to make the sum feasible. In practice I think it will take a civil war. It’s barely possible that defaulting and shutting down public expenditures altogether might enable that conflict to occur without armed violence, so I’m all for it. n nAs that seems to make me a Denier, make the most of it!
Let's take the best case scenario that running past the debt ceiling and implementing the spending cuts would have NO direct effect on the financial markets. What happens then? n nSince we are projected to run about a $900 billion deficit this year, under static analysis we would have to implement $900 billion in spending cuts. Remember that the danger of the fiscal cliff was too much deficit reduction, too soon. We risked a negative impact to the recovery and a double dip recession from a $500 billion hit to FY 2013 fiscal policy. So a $900 billion hit would almost certainly send us into a double dip recession. This would lower revenues below projected, requiring more spending cuts and a deeper recession. n nSo the best case scenario from running past the debt ceiling is a double dip recession.