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Tilting at Windmills

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January 2, 2011

RISKING 'THE FIRST DEFAULT IN HISTORY CAUSED PURELY BY INSANITY'.... In mid-November, after the dust had settled from the midterm elections, incoming House Speaker John Boehner (R-Ohio) acknowledged that he's well aware of the fact that his chamber is going to have to extend the federal debt limit. He noted that's already "made it pretty clear" to his own caucus that Republicans are "going to have to deal with it as adults."

Boehner added, "Whether we like it or not, the federal government has obligations and we have obligations on our part."

Dealing with the debt limit "as adults" doesn't appear to be going well. This morning, two right-wing lawmakers -- Rep. Michele Bachmann (R-Minn.) and Rep.-elect Mike Kelly (R-Minn.) -- reiterated their opposition to raising the debt limit on CBS's "Face the Nation."

Soon after, Sen. Lindsey Graham (R-S.C.) said on NBC's "Meet the Press" that failing to raise the debt ceiling "would be very bad for the position of the United States in the world at large." Graham, however, quickly followed that by saying he's prepared to hold the debt limit hostage "until a plan is in place" for the nation's long-term fiscal challenges that meets his satisfaction.

So much for dealing with this "as adults."

Austan Goolsbee, chairman of President Obama's Council of Economic Advisers, doesn't sound pleased with the direction of Republican rhetoric.

The chairman of President Obama's Council of Economic Advisers said today it would "insanity" for Congress to refuse to lift the nation's debt ceiling, and that inaction would be "catastrophic" for the nation's financial recovery.

"This is not a game," CEA chairman Austan Goolsbee told Jake Tapper on ABC's This Week. "The debt ceiling is not something to toy with."

Goolsbee added, "If we get to the point where you've damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity.... There would be no reason for us to default, other than that would be some kind of game."

No doubt aware that global markets might pay attention to the U.S. political discourse, and may not fully appreciate the stupidity and recklessness of Republican tactics, Goolsbee went on to say, "We shouldn't even be discussing that. People will get the wrong idea. The United States is not in danger of default.... We do not have problems such as that. This would be lumping us in with a series of countries through history that I don't think we would want to be lumped in with."

Goolsbee also said, "I don't see why anybody's talking about playing chicken with the debt ceiling." If only more congressional Republicans had the wisdom and maturity to think the same way.

Steve Benen 12:05 PM Permalink | Trackbacks | Comments (49)

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In a country in which 40% of the population 'believes' that the Earth is only 10,000 years old, an Earth in which dinosaurs and humans existed at the same time, what do you expect ? American is the most stupid poplulation on Earth ... and the most dangerous at the same time. What a nice combination........

Posted by: blue on January 2, 2011 at 12:16 PM | PERMALINK

Fox News. Never underestimate the power of persuasion and propaganda. There are loons egging on the loony. We are at a dangerous time because people invoke Godwin's Law when you see Brown Shirts; bipartisanship with fascists; comity with the calamitous.

It really is treason and we should never have tolerated Norquist for a second.

Posted by: Sparko on January 2, 2011 at 12:22 PM | PERMALINK

Basically, we're doomed, and we just need to accept it. There's no reason we should have ever expected anything else.

Posted by: chip on January 2, 2011 at 12:30 PM | PERMALINK

I hope to hell Goolsbee's remarks are part of a coordinated WH strategy to get in front of this and win it.

The Republicans are clearly already starting the game of "Chicken," and the next step will be to begin blaming Obama pre-emptively for any standoff. And the Broderites will amplify the message for them -- Obama has to reach out, to work across the aisle, to heed the mandate of the election, blah blah bipartisan blah.

Unless the WH makes clear -- again and again, forcefully and explicitly -- that the Republicans caused the mess in the first place, and their complete fiscal irresponsibility and political gamesmanship are the only reason it's persisting -- the Democrats will be blamed for any train-wreck, sure as the sub rises in the east.

Posted by: bleh on January 2, 2011 at 12:37 PM | PERMALINK

... sun ...

Posted by: bleh on January 2, 2011 at 12:39 PM | PERMALINK

Wasn't "The Sub Rises in the East" Tom Clancy's sequel to "The Hunt for Red October"?

Posted by: delNorte on January 2, 2011 at 12:42 PM | PERMALINK

Of all the representatives why does the MSM consistently put Bachmann on the sparkle box of intentional ignor... Oh. Wait. I think I just answered the question.

Posted by: Kill Bill on January 2, 2011 at 12:47 PM | PERMALINK

Out of sheer ignorance and stupidity, the American people have managed to give themselves the government they deserve, just as the Germans did in 1933. Now they'll have to live with the consequences. 80 years later, Germany is a very nice place. If a second civil war is going to be what it takes to get rid of these scum, at least this time let's ethnically cleanse the place like we failed to do 150 years ago. Sadly, Minnesota, once one of the most reliable states in the country and one of the linchpins of the last civil war, has it's own traitors to deal with.

Posted by: TCinLA on January 2, 2011 at 12:48 PM | PERMALINK

Why can't Republicans protest things by setting themselves on fire the way those Buddhist monks in Vietnam did?

Posted by: Speed on January 2, 2011 at 12:50 PM | PERMALINK

There are 70-100 million people in this country who would rather huddle in Republican ruins than live in a more-or-less functional society where political power is, for however short a period of time, in the hands of somebody else.

And they crawl over broken glass to vote.

Posted by: Davis X. Machina on January 2, 2011 at 12:58 PM | PERMALINK

I actually think that for once Fox News is going to be helpful here—yes, really. I find it impossible to believe Murdoch and Ailes aren't aware of what would happen to their own finances were the US to default, and will keep this insane game from going too far, out of sheer self-interest.

...at least, I sure hope so...

Posted by: scott (the other one) on January 2, 2011 at 12:58 PM | PERMALINK

As Atrios says, there's no danger of an actual default. The country-clubbers still control the Republican Party.

The danger is the political fallout. Republicans have taken some serious hits recently as the "responsible daddy" party. Setting them up as the crazy drunk daddy would pay huge dividends for the Dems.

But as noted elsewhere, the Democrats "never miss an opportunity to miss an opportunity."

Posted by: bleh on January 2, 2011 at 1:04 PM | PERMALINK

The White House has a huge upper hand here, I just hope they realize it. The ReThuglicons don’t want to shut down the federal government or send us into default, because they are fully aware what happened the last time it was tried.

Obama needs to stay above the fray so that if they do something completely foolish and crazy, he can say it’s all on the new Republican Majority in Congress.

Posted by: Joe Friday on January 2, 2011 at 1:09 PM | PERMALINK

Yes, the narrative is already getting set: " this is too important" and "not to be toyed with" etc etc,

which is exactly what will put the Pres in a position to preemptively cave and massively cut SS, Medicare, education, science funding, and everything else except DoD

which was what he wants to do ANYWAY... we've heard this song before... tax cut "deal" anyone?

Posted by: r_m on January 2, 2011 at 1:11 PM | PERMALINK

The debt limit will be raised. The only question is how much and what the Republicans are going to get for it.

They are going to push for one or more of the following:

1 - A 'spending freeze'. The DOD and other 'national security' spending will be expempt. And tax cuts don't count on increased spending.

2 - An across the board spending 'cut'. Again DOD and 'national security' spending will be exempt.

Note the effect of both these measures would cripple if not outright kill implemenation of both Health Insurance reform and the new comsumer protection agency.

Posted by: thorin-1 on January 2, 2011 at 1:18 PM | PERMALINK

Why Not Call Their Bluff?

People on the right wing will say "Well, why can't the government just stop paying for Medicaid? Why doesn't it just cut some of those unneeded bureaucrats' salaries? Or just fire them? Why not get rid of that disgusting art support program? Putting a ceiling on the debt will finally force some hard changes!"

And folks on the left will suggest "Fine. Let's start by cutting back at the Pentagon. Bring the troops home. Start to close unnecessary foreign bases. Ditto for domestic bases. Cancel Cold War weapons programs that are no longer relevant. Quit subsidizing the big multinational corporations. The GOP can put up, or shut up!"

Isn't this an option? Isn't this what a lot of people sort of would like to see? Is this even a possibility? And where am I wrong? (Seriously - I'm not particularly sophisticated about international finance.)

Posted by: zandru on January 2, 2011 at 1:25 PM | PERMALINK

This has nothing to do with the actual debt for Republicans. It's a tool for blackmail and their holdup note will read as follows: "Make the Bush tax cuts permanent till the end of time and we'll back off default." When Obama refuses, they'll blame any resulting problems on him. The proper response is a full court press, including a prime time Presidential address where he calls the Republicans out for risking enormous damage to the country for the sake of their rich donors. If he does it right, the public will back him.

Posted by: dalloway on January 2, 2011 at 1:46 PM | PERMALINK

It is vitally important for the Obama administration and the Democrats to refuse any attempt by Republicans to trade a vote to raise the debt limit for any Democratic concession at all.

The Republicans will control the House, and it is their responsibility to raise the debt limit. They must not get anything for doing their job.

Not only that, but Democrats should do as they did in the 90s, and require that a majority of House Republicans vote for the debt limit increase (by withholding their votes until Republicans sign on). If the first vote fails, so be it; let the resulting shock to the markets knock some sense into their heads.

Posted by: Joe Buck on January 2, 2011 at 2:32 PM | PERMALINK

Exactly what is on their minds, if they have any? Do they want us to be bought for a song by another country (you know how bankrupt corporations can easily be takeover targets? Why not the whole country? What foreign entities are these zanies working for? Or does Wall Street want to divvy us up with the Chinese?)

George Will finally feels his own pocketbook threatened by the crazies, whereas the rest of us have been feeling the threat a long, long time.

Posted by: jjm on January 2, 2011 at 2:46 PM | PERMALINK

I think many people here have already mentioned it, but all of this is the will of the people. It's not like the Republicans and conservative movement have hidden their true agenda in the shadows and fooled an unsuspecting public, they've got a receptive audience. Fox News is the open sore...the current state of the American people is the true rot underneath.

Posted by: SaintZak on January 2, 2011 at 3:02 PM | PERMALINK

Aside from "it could cause US and global financial meltdown", why shouldn't the Repubs hold the debt ceiling hostage for major Dem concessions? Have you all not noticed that non-negotiable extreme Repub demands have worked 20-50 times in the last two years? Each time it gets much of what is wanted. By mostly keeping silent you've helped enable BHO and Senate Dems to cave every time to non-negotiable demands. That's way strong leaders don't openly cave to opponents who take that tactic.

Some of you sound like you think BHO and Senate Dems should grow a backbone. Insofar as the past predicts the future, good luck with that. The Repubs -- as well as many foreign leaders-- have taken the measure of BHO in this regard. Your best bet is to encourage asap Progressive challengers to BHO and 5-10 Senate Dems. It's too late for anything else.

Posted by: gdb on January 2, 2011 at 3:11 PM | PERMALINK

Isn't this rhetoric treasonous and un-American? Why are the Fox stupid cunts not reporting on this obvious infraction? Come on Laura, Gretchen, Megyn, Sarah; say something that isn't stupid!

Posted by: Trollop on January 2, 2011 at 3:25 PM | PERMALINK

Contrary to Republican beliefs, there is no such thing as a Free Lunch. The top tax rate under Eisenhower was 90%. Under Nixon, 70%. Even under Ronald(Blessed be His Name)Reagan, it was 50%.

Posted by: DAY on January 2, 2011 at 3:29 PM | PERMALINK

The danger here seems very real to me. There is obviously a loud chorus of Congressional REpublicans threatening to hold the debt ceiling issue hostage in return for other policy demands. If the Administration and the Democrats--not to mention the few remaining responsible Republicans in Congress--allow this to become a negotiation, then this really is giving in to blackmail, with the well-being of the entire country and financial system at stake.

I try not to get hysterical about every Republican strategic move, but this one really would be without precedent and, in addition, would mean the end of Obama's progressive agenda. Once a blackmailer succeeds, he/she doesn't generally stop. The Tea Party faction of the Republican Party will hold the debt ceiling issue hostage every year, and it will then hold the budget hostage. There won't be any end to this. I'm a believer in compromise as the path to governance, but in this case, a firm line needs to be drawn and the bluff needs to be called.

Posted by: DRF on January 2, 2011 at 3:33 PM | PERMALINK

Sparko's got it pretty much right.

The most powerful source of treason is FOX "News". Don't ever forget that it is owned by a foreigner, an Australian fascist.

Murdoch's (purchased) citizenship should be revoked and the law preventing foreigners from owning American TV stations should be applied.

Posted by: Rick B on January 2, 2011 at 4:08 PM | PERMALINK

Someone should really point out to the public that America cannot afford to fight two unnecessary wars, field 13 carrier groups and continue to build the overpriced F-35 if the debt ceiling is not increased.

Also, the current level of debt depends on both foreign countries and the Social Security trust funds buying US Treasury bonds. The reason there are attacks on the well-funded Social Security is because it has been lending money to the federal government since 1983, but this year the baby-boomers are starting to draw retirement so the feds are going to have to start either (1) paying the trust funds back - or (2) default on treasury bonds generally - or (3) lower retirement benefits so they don't have to tax the wealthy beneficiaries of all that unneeded military spending.

Guess which choice the wealthy oligarchs who own the American wealth invested in treasuries want?

Anyone who tells you the effort to redirect the FICA tax is not a tax grab on the working Americans by the wealthy oligarchs is lying to you. Social Security retirement is fully funded for the next three decades AT LEAST and no one can honestly telly you what happens after that. The predictions that Social Security will then only be able to pay 77% of full benefits is the worst case scenario. Have you ever heard the best case or the most likely? No. The thieves want us all scared!

Posted by: Rick B on January 2, 2011 at 4:22 PM | PERMALINK

something's gotta give. The nation can not continue where the people are so unengaged that they are easily fooled into electing insane idiot republicans to important position in the government.

The people are begging for massive pain with their stupidity and their laziness making craven republicans viable year after year. I say b>get it on already - crash the nation, ruin the rich, and wake up the stupid masses that they must actively know what the EFF is going on, know when fox news and all the conservative dissemblers are lying to them, and start the hell over from economic ruin, start to put United back into Untied States, recreate a community of people with common concerns, jettison the violently insane right, restore decency to the nation.

Posted by: gak on January 2, 2011 at 4:27 PM | PERMALINK

The state that rises from the ashes will be every bit as flawed as its predecessor, just flawed in different ways. Even money, it's worse than its predecessor.

While individual people may be lovely, in the aggregate, people are shits, and any polity not grounded in that fact is bound to disappoint, and eventually fail.

Take the stupid, and give the points. Stupid doesn't always win, but it always covers the spread.

Posted by: Davis X. Machina on January 2, 2011 at 4:35 PM | PERMALINK

This morning, two right-wing lawmakers -- Rep. Michele Bachmann (R-Minn.) and Rep.-elect Mike Kelly (R-Minn.) -- reiterated their opposition to raising the debt limit on CBS's "Face the Nation." -- Steve Benen

Repubs are used to conducting businesses and corporations in a "rip 'em off and fly-by-night" manner. Why not the whole country, then?

Posted by: exlibra on January 2, 2011 at 5:06 PM | PERMALINK

Gdb, I know as a , most likely, other party type , it's your Job to stir the pot and make more people hate Obama, but really, you are just stupid.

Posted by: Michael on January 2, 2011 at 5:39 PM | PERMALINK

If the House Republicans attach some ridiculous RightWing agenda to either the debt ceiling increase or the operating budget, the House Dems should just all vote “Present” and tell Boehner good luck trying get a majority from his own caucus.

Posted by: Joe Friday on January 2, 2011 at 6:15 PM | PERMALINK

Kelly is from Pennsylvania, not Minnesota. He beat Kathy Dahlkemper.

Posted by: Vadranor on January 2, 2011 at 6:36 PM | PERMALINK

Where is the hardball on our side?

What are we - little old ladies?

Posted by: c2rtetq2 on January 2, 2011 at 6:43 PM | PERMALINK

Sane-vs-insane is an intra-Republican fight, let's keep it that way.

Wall St will lean on their Republican reps to do the right thing when push comes to shove. Fortunately, Boehner separated the debt and budget votes to make this easier (perhaps that was at the behest of Wall St friends?). Dem leadership should commit up front to matching Republican votes and no more.

Posted by: ElegantFowl on January 2, 2011 at 6:45 PM | PERMALINK

The House Dems should sit on their hands and let the Republicans fight amongst themselves. I heard Representative Weiner laying down some smack to Kelly and Bachmann this morning on Face the Nation about how they own it now and will have to govern.

The Teabagger bombthrowers want to go after Social Security, Medicare, and other sacred cows, but if Boehner and the country club Republicans vote for that they will be SLAUGHTERED in the next election (even if it dies in the Senate).

So Boehner may have to come crawling to the House Dems to get to a majority for less radical legislation, and then THEY will have the leverage.

Posted by: Joe Friday on January 2, 2011 at 7:31 PM | PERMALINK

The R's wont be able to afford their eternal wars if they dont raise the debt ceiling. They will act like they are really concerned about debt, for the parochial base, but really arent.

Posted by: Kill Bill on January 2, 2011 at 7:38 PM | PERMALINK

Extend the debt by 100 billion.
That'll force another vote a month later.

Force congress to come back and back and back until the budget gets balanced. If you balance it, no more monthly increases will be needed.

This is NOT to say that I agree with the idea of slowing government spending when workers can be hired at fire sale price (aka high unemployment) but if the GOP insists on doing so, it can be done aggressively without default.

If Democrats are forced to balance the budget, Obama might at least take credit for fiscal discipline and the GOP will almost certainly be forced to cut defense OR suffer a savage beating in 2012 by seniors who had Medicare and Social Security pillaged and abundant funds still handed over to the military industrial complex.

Doing as the public foolishly asks may not be so horrible. It's not as though the GOP isn't planning to tank the economy until at least 2012 anyway so they can run their president as our only hope of recovery. (True... in a self-fulfilling prophecy kind of way. They'll allow stimulus spending the moment a Republican is in the oval office so we spend it on bombers, nukes, and soldiers for the Iran war instead of solar and wind power, high speed rail, and nanotechnology.)

Once again deficits won't matter because there's a war on that must be won at any cost! (What "winning" the Iran war actually IS will not be specified.)

Posted by: toowearyforoutrage on January 2, 2011 at 7:51 PM | PERMALINK

"The debt ceiling is not something to toy with."

It exists in order to be repeatedly raised. It probably shouldn't even be called a "ceiling", just "debt".

Posted by: marketeer on January 2, 2011 at 7:59 PM | PERMALINK

Release the hounds.

Posted by: a passerby on January 2, 2011 at 8:40 PM | PERMALINK

I can't imagine some deal won't eventually be agreed upon -- hopefully with the major concessions being made by Republicans -- but just as a thought experiment, isn't it the case that the country's tax revenue -- depressed as it is because of the economy -- nonetheless if far more than adequate to pay the country's creditors? I was under the impression that that servicing the country's debt -- while a huge expense -- was still only something like 10% of the budget. I guess my question is, in the unlikely event of stalemate that extends past the deadline, wouldn't it be more likely that, say, Social Security checks or hospital bills or even military salaries would go unpaid, rather than America's creditors?

Posted by: Jasper on January 2, 2011 at 8:49 PM | PERMALINK

By the way, somebody on one of the talk shows this morning -- I think it was George Will on "This Week" of all people -- mentioned that it is only the United States that requires regular legislative approval to raise the debt ceiling. I found this interesting. It had never occurred to me that these regular kabuki dances aren't even necessary. But they're not. It would be nice if a law could be passed simply giving the government the authority to borrow the money it needs to to fund spending that, after all, has all already been approved by Congress.

Posted by: Jasper on January 2, 2011 at 8:53 PM | PERMALINK

“toowearyforoutrage” posted:

Force congress to come back and back and back until the budget gets balanced. If you balance it, no more monthly increases will be needed.

Eh, you cannot balance the federal budget by cutting spending.

The vast overwhelming majority of the federal deficits and debt is from the loss of revenue as a result of the numerous rounds of tax cuts for the Rich & Corporate.

Posted by: Joe Friday on January 2, 2011 at 9:08 PM | PERMALINK

I do believe that Speaker-to-be Boehner is going to have to earn every cent of his salary for the next two years.
About f*cking time...

Posted by: Doug on January 2, 2011 at 9:41 PM | PERMALINK

Two weeks ago on national TV John Boehner told 60 Minutes' Leslie Stahl that he has stricken the word "compromise" from his vocabulary. What a childish thing to do. Children think they will always get their way and then refuse to cooperate when they don't. America deserves better leaders.

Posted by: pj in jesusland on January 3, 2011 at 5:58 AM | PERMALINK

And what about all the big brains on Wall St. who funded the Republican resurgence? Are they going to be too happy when these children trash their portfolios?

Posted by: bob h on January 3, 2011 at 6:31 AM | PERMALINK

Having borrowed the retirement contributions of middle class taxpayers for a generation by using procedes of the Social Security Trust Fund to pay for tax cuts for the rich, Republicans have tried to do away with social security itself by claiming the Treasury notes in the trust fund's account are nothing more than "worthless IOU's." Republican lunacy on the debt ceiling may be their way of making this assertion come true.

Posted by: Ted Frier on January 3, 2011 at 7:13 AM | PERMALINK

"If a second civil war is going to be what it takes to get rid of these scum, at least this time let's ethnically cleanse the place like we failed to do 150 years ago"

I can tell you as a matter of fact, for my state (Florida) most all of the current agitation and extremist conservative disruption traces it's origins back to individuals that have migrated down here over the past 20-30- years...The rest of the south is on their own, but I do know my Florida demographics and history very well.

Posted by: H.Finn on January 3, 2011 at 7:37 AM | PERMALINK

The chairman of President Obama's Council of Economic Advisers said today it would "insanity" for Congress to refuse to lift the nation's debt ceiling, and that inaction would be "catastrophic" for the nation's financial recovery.

"This is not a game," CEA chairman Austan Goolsbee told Jake Tapper on ABC's This Week. "The debt ceiling is not something to toy with."
Or, as in the "fair and balanced" alternate reality of FOX and Friends, Goolsbee is calling for increased spending, and claims the economy will tank if we don't get it.

Posted by: shadow on January 3, 2011 at 12:35 PM | PERMALINK

Jasper wrote, I guess my question is, in the unlikely event of stalemate that extends past the deadline, wouldn't it be more likely that, say, Social Security checks or hospital bills or even military salaries would go unpaid, rather than America's creditors?

That's my impression: we wouldn't default on the debt payments. Instead, first Treasury would start playing games (moving funds around) for a few weeks. Of course, eventually that stuff wouldn't be sufficient. Eventually, something would have to give. I assume they'd have to drastically cut SS payouts. Problem with that is that, while usually projections of the citizenry here rising up are BS, that really would lead to massive, massive protests.

Posted by: liberal on January 3, 2011 at 4:28 PM | PERMALINK



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