Weekly Audit: Hostage-Taking Over the Debt Ceiling

 

By Lindsay Beyerstein, Media Consortium blogger

The latest contrived showdown between Congressional Republicans and the White House is over what concessions the GOP will demand in order to increase the federal debt ceiling.

George Zornick of The Nation explains how the shakedown works:

Congress now needs to approve any borrowing past the $14.3 trillion debt ceiling, which the United States will reach “no later” than May 16, according to Treasury Secretary Timothy Geithner. If Congress doesn’t raise the debt ceiling, the government would have to stop spending—including stopping interest payments on those Treasury bonds, meaning that the United States would effectively default on its debt.

The debt ceiling has to be raised and everyone knows it. Surely the Republicans knew it when they voted for tax cuts for the rich with borrowed money. If the debt ceiling is not raised, the United States will default on some of its obligations. Just like what happens after you miss a credit card payment, the country’s creditors will demand higher interest in order to lend to us in the future.

Playing chicken with the debt ceiling is a recipe for increasing the national debt. Paul Waldman argues in The American Prospect that the Republicans hate government so much that they are willing to declare war on the economy in a quixotic bid to smash the state:

The reason we’re now seeing an unprecedented amount of attention paid to a vote that ordinarily passes with little notice is that the Republican Party’s agenda is being set by a group of ideological radicals who seem quite willing to cripple the American economy if that’s what it takes to strike a blow against the government they hate so much.

Peak Crazy

At AlterNet, Joshua Holland explains why failure to raise the debt ceiling would be an economic catastrophe that could jeopardize the economic recovery. “Peak Crazy,” he calls it.

However, Holland notes that a showdown over the debt ceiling does not risk an immediate government shutdown, like the one we faced over the budget battle. Borrowing isn’t the only way that government agencies are funded. The government could still spend the $150 billion or so it takes in every month in tax revenue, for example.

Yet, Senate Minority Leader Mitch McConnell (R-Kentucky) has announced that 47 GOP senators oppose raising the debt ceiling unless “credible attempts” are made to cut federal spending. Meanwhile the Tea Party is launching an all-out lobbying effort to urge House Republicans not to raise the debt ceiling without major spending cuts.

The Tea Party’s wish list includes some total pipe dreams like a balanced budget amendment to the constitution, and a law to require a two-thirds majority for all future tax increases. Former senator and current U.S. presidential hopeful Rick Santorum cheerfully announced that he would let the United States default on its debt if health care reform is not repealed. Rep. Michele Bachmann (R-Minn) helpfully suggests paying the interest on Treasury Bills using money that would otherwise go to Social Security.

Shoot the hostage

Cenk Uygur of the Young Turks argues that Democrats are panicking needlessly and, once again, offering needless preemptive concessions to the Republican fringe in the form of a proposed “hard cap” on government spending, which would cap new government spending, and subtract any overruns from social welfare programs like Medicare and Social Security.

The truth, Uygur notes, is that Wall Street has already told the Republicans in no uncertain terms that the debt ceiling will be raised. The economic consequences of doing anything else would be unthinkable. The Tea Party can yell and scream, but the adults have already made the decision. Knowing this, Democrats should not be trying to placate the Republicans so as to induce them to do something they will ultimately end up doing.

Digby on Social Security

Democrats are wavering in their decades-long commitment to defend Social Security, Heather Digby Parton (a.k.a., “Digby”) writes in In These Times:

In a quixotic attempt to fix the problems in the current economy without confronting the plutocrats, the Democrats are using the illogical argument that since Social Security is projected to have a shortfall in 35 years, we must cut benefits now. And they seek to prove to “the market” that the government is fiscally responsible by showing it’s willing to inflict pain on its citizens—in the future.

Even if we do nothing, Social Security can pay out full benefits for the next 35 years. There is no crisis. A small increase on the payroll cap on Social Security could shore up the program for generations to come. Republicans oppose Social Security because they are ideologically opposed to social welfare programs, not because Social Security is broken.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

The Origin Of The Village

Greg Sargent, now with new digs, presents the etymology of the the term:

"The Village" and "The Villagers" are terms frequently used in the liberal blogosphere as a derisive epithet for the Beltway media and political elite. The term "Village" appears to be a reference to a  famous 1998 article written for The Washington Post by D.C. society hostess and WaPo writer Sally Quinn, in which she explained the Beltway establishment's outrage over Bill Clinton during the Monica Lewinsky scandal.

Quinn wrote, without irony, that Establishment Washington -- which she described as "the high-level members of Congress, policymakers, lawyers, military brass, diplomats and journalists who have a proprietary interest in Washington and identify with it" -- is "not unlike any other small community in the country."

"They call the capital city their `town,'" Quinn wrote. Thanks to the Lewinsky mess, she added, "their town has been turned upside down."

Worth it to read the whole post, and bookmark Greg's new site.

There's more...

I Heart Digby.

(cross posted at kickin it with cg)

Video from the Gala Dinner at Take Back America 2007 in Washington, DC - June 19, 2007

That is all.

There's more...

Media Panel With Digby and Arianna

Arianna Huffington is moderating a panel on old vs. new media featuring Digby, Chris Cilizza, Jonathan Alter, and Greg Maffei (CEO of Liberty Media.)

It's part of the Starz Green Room here in Denver, just up the street from The Pepsi Center. The panel is streaming live HERE.

Update [2008-8-25 14:17:9 by Todd Beeton]:Arianna is driving the conversation to explore a really important question: the original purpose of journalism was to ferret out the truth yet so often now journalists feel the need to "present both sides", truth be damned.

Jonathan Alter concurs: "A phony sense of balance. Sometimes there aren't two sides to a story." When discussing the negativity of the McCain and Obama campaigns, Alter made an interesting point: "They're both being negative but they're not being negative in the same way. Obama's had 2 ads that stretch the truth, McCain's had like 10. How do we convey that without seeming biased?"

Digby jumped in to address the the loss of credibility and revenue among the traditional press: "The reason that the press lost credibility is that they lost credibility...For years we've gone through these events that the press cheerled the way through. The impeachment of Bill Clinton, the 2000 election and the Iraq war. We were sold a list of goods and the press helped sell it."

That was the one moment of applause during the panel. Jonathan Alter is getting very defensive about the criticism of the "mainstream" media.

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Hillary Protest Coming to LA!!

This is a guest diary from the LA Committee to Protest Media Bias on the Westcoast.

THE WE'RE MAD AS HELL PROTEST AGAINST GE/MSNBC HEADS TO LA!!     JOIN US!!!!

There will be a protest this Friday morning at Rockefeller Center in New York against the anti Clinton bias and accepted sexism of much of the coverage and commentary that is aired by NBC and MSNBC.

This diary is meant to give a short history and background to how GE/NBC/MSNBC have worked against Democratic Party interests for over a decade and to announce that we will be presenting another protest/picket in Los Angeles and would like to recruit  people to be involved.

Let's review the basic data about the big political stars of NBC News--Tim Russert (Meet the Press), Brian Williams (Nightly News) and Chris Matthews (cable ranting). They're much more like a fraternal order than like something you'd call a "press corps.

The three were hired or anointed under the regime of conservative mogul Jack Welch; as chairman of General Electric, Welch was in charge of NBC News, and was heavily involved in its operation. Welch recruited the three, and made them multimillionaires; he even let Russert and Matthews live with him amid the swells of Nantucket. And oh yes: The three have been kicking the sh*t out of Dem White House hopefuls from that day right up to this.

There's more...

Diaries

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