Editore"s Note
Tilting at Windmills

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April 12, 2011

WHAT A DIFFERENCE A WEEK MAKES.... Sen. Richard Shelby (R-Ala.) was asked last week about the looming deadline on a government shutdown. The conservative senator said, "Nobody wants the government shutdown. That's absurd."

Shelby was on the Fox Business Network yesterday, and returned to the subject.

HOST: Would you be willing to risk a government shutdown in order to prevent the debt ceiling from being raised any?

SHELBY: I would certainly consider it.

Of course he would. The idea was absurd last week, but it's open to consideration this week.

Shelby, of course, had no qualms about voting to raise the debt ceiling seven times in the eight years spanning the Bush/Cheney era, but after helping add trillions to the debt, the Alabama Republican is reevaluating the situation.

But it's worth remembering that Republicans aren't just "risking a government shutdown" when it comes to the debt ceiling. In fact, it's just a small part of the problem.

Had the GOP shut down the government last week, it would have been awful for the economy. If the GOP blocks a debt-limit extension, a shutdown would be the least of our troubles.

As the NYT noted the other day, " Once the limit is reached, the Treasury Department would not be able to borrow as it does routinely to finance federal operations and roll over existing debt; ultimately it would be unable to pay off maturing debt, putting the United States government -- the global standard-setter for creditworthiness -- into default. The repercussions in that event would be as much economic as political, rippling from the bond market into the lives of ordinary citizens through higher interest rates and financial uncertainty of the sort that the economy is only now overcoming."

The likelihood of "provoking another credit crisis like that in 2008" is very real.

Lawmakers shouldn't be asked about whether they're willing to risk a government shutdown; they should be asked whether they're willing to risk a global economic disaster.

Steve Benen 11:25 AM Permalink | Trackbacks | Comments (25)

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I'd wager they're going to demand huge cuts, defunding of Planned Parenthood, and most importantly, complete repeal of ACA. Why shouldn't they? The President always, always concedes.

And another thing: when was the last time Obama used "fight" and "middle class" in the same sentence?

Posted by: BrklynLibrul on April 12, 2011 at 11:34 AM | PERMALINK

A few phone calls from our Galtian Overlords to our Galtian Goobers in Congress should alleviate all this. Sticking it to poor people is a no-brainer. Deep-sixing the global economy is something else entirely. But, with J Alfred Obama as president, who knows what preemptive capitulations lie ahead. Maybe he can agree to sell the naming rights to the White House to the RNC.

Posted by: walt on April 12, 2011 at 11:42 AM | PERMALINK

when was the last time Obama used "fight" and "middle class" in the same sentence?

The only people Obama fights are the "professional left."

Posted by: Doctor Whom on April 12, 2011 at 11:43 AM | PERMALINK

When asked about the threat of invasion by space aliens, the Senator said, "That's Absurd!"

"But, Senator Shelby- 74% of Americans believe in UFOs."

"As I said, it's Absurd to let this threat to our nation go unchallenged! We must immediately fund a massive study, preferably in the NASA center, at Mussel Shoals, Alabama. . ."

Posted by: DAY on April 12, 2011 at 11:43 AM | PERMALINK

The Space Center is in Huntsville. The historic recording studio is in Mussel Shoals;>

Posted by: martin on April 12, 2011 at 11:45 AM | PERMALINK

Republicans don't even have to threaten shut-down, the Dems will concede it before them. They will concede almost every talking point, cutback and service reduction so as to keep the "Peace". Dems are acting totally like an abused woman and the Republicans the abusers. An ugly metaphor true, but very, very apt.

Dems and Obama need to stand up and say no more. These cuts will damage the economy and people. The Bush tax cuts, all of them gawdammit, need to expire and stricter fiscal regulations need to be put in place to prevent the economy from imploding again.

Obama needs to welcome their hate.

Posted by: Darsan54 on April 12, 2011 at 11:45 AM | PERMALINK

This is so STUPID. They are going to vote to raise the debt ceiling. They are going to posture, pretend, talk about their 'values' but they are going to vote to raise it. It is the Dems job to say 'Screw you'...and educate the public. Fear mongering from either side is really not attractive.

Posted by: SYSPROG on April 12, 2011 at 11:46 AM | PERMALINK

There's a moment in "Inside Job," the Academy Award-winning documentary on the 2008 meltdown, where the French finance minister is asked when the U.S. government told her that it was going to let Lehman Brothers fail. She said she learned it from a newspaper article after it had already happened.

The movie then shifts to outlining the international repercussions of that unilateral decision, which our Galtian overlords had been unaware of and apparently unconcerned about.

Sounds just like these morons.

Posted by: blondie on April 12, 2011 at 11:47 AM | PERMALINK

Go ahead Republicans, tell Wall Street that we're not paying back all of that money you borrowed for Medicare D and wars and tax cuts.

Sure, yeah, we really think you'll do it this time. Right.

Posted by: Call Their Bluff on April 12, 2011 at 11:48 AM | PERMALINK

And another thing...when Alan Simpson is the sanest man in your party, you DESERVE to be mocked GOP!!!
http://thinkprogress.org/2011/04/11/alan-simpson-gop-homophobes/

Posted by: SYSPROG on April 12, 2011 at 11:49 AM | PERMALINK

Here's hoping for once that the big banksters who have Congress by the balls impress on them the importance of not letting a default happen.

Also, @BrklynLibrul: Obama always "concedes" because he's in a situation where he wants to fix something, but the GOP holds the tools and doesn't want to fix anything. So they make the demands and he decides how much to concede. It's as though you were standing outside a burning house, you really, really want to put the fire out, but there's a bunch of guys standing around the hose who really don't give a shit if they place burns to the ground and tell you if they're going to help you out, you have to give them your car. So you concede the car to save the house. Unfortunately, Obama doesn't have anything right now the GOP wants, and they have everything he wants (viz. spending authority). So they get to make demands in return for their cooperation. The fundamental problem is that Democrats think the government has important work to do and the Republicans don't. The side that gives a shit about people and things will always give in to the demands of those who don't. Ask King Solomon.

Posted by: jonas on April 12, 2011 at 11:49 AM | PERMALINK

As if we needed more evidence of the imbecilic nature of the American citizen 60 percent said they would support not voting for raising the debt ceiling AFTER IT WAS EXPLAINED TO THEM WHAT THE ACTUAL CONSEQUENCES WOULD BE. My god.

Posted by: stormskies on April 12, 2011 at 11:56 AM | PERMALINK

Well, they pretty much CAUSED a global economic disaster with their deregulation and asset inflation-encouraging policies during the Bush administration. Why shouldn't they be willing to do it again?

Posted by: bleh on April 12, 2011 at 12:00 PM | PERMALINK

I suspect part of the problem is that even if the average American is aware of this issue, they either (a) misunderstand the parameters and think its equivalent to their own household (ie. "we should live within our means and quit borrowing"), or (b) think this will only affect Wall Street bankers and the like (who, frankly, its hard to have any sympathy for in the first place).

I confess I have some empathy for option (b) and can understand people's misunderstanding the stakes. Fiscal and monetary policy on this level is likely nothing but alien concepts to most people, and certainly sound like nothing more than vague terms which they can't actually connect to their daily lives. After all, what does it mean to someone earning minimum wage at Burger King in Kansas that the US government has suddenly defaulted on its obligations to China?

The President and Democrats need to make a concrete case on this, spelling the real-world consequences to the public in ways even a two year-old can grasp. It may not sway the GOP, but gods know the public should be made aware of what its in for.

Posted by: Josef K on April 12, 2011 at 12:02 PM | PERMALINK

One of my operating theories is our elected officials are totally controlled by the monied elite. So why are they once again threatening certain economic ruin?
My other operating theorie is, there are no accidents in politics. If it happens it was planned.
So what is the plan here? Is it to shock us? Is it to make the theft of over 2 trillion dollars of social security payments permanent? Is it to lower the payouts to aged, handicapped and poor citizens so that the money can be shifted to payouts to wealthy holders of debt?
Just asking?

Posted by: foghorn on April 12, 2011 at 12:13 PM | PERMALINK

I have to say failing to raise the debt limit would be sending a strong message to the world. It is no longer morning in America and you are on your own suckers. As for us it would probably be the end of America as we know it. Our decline into backwater status would no longer be gradual and reversable. Instead it would be abrupt and irreversable.

Posted by: Ron Byers on April 12, 2011 at 12:26 PM | PERMALINK

Swaggering bravado says what?

Posted by: Skip on April 12, 2011 at 12:39 PM | PERMALINK

If it becomes necessary to start shutting down government operations due to congressional failure to raise the debt ceiling, I think all those U S government facilities in Alabama should be at the top of the list since a country that can't afford to take care of its citizens has no business wasting money on a space program. Senator Shelby needs to remember that for every dollar that Alabama sends to Washington, it gets back about $1.40. Same holds true for Alaska and all the southern states.

Posted by: sparky on April 12, 2011 at 12:43 PM | PERMALINK

@foghorn, you asked, "So what is the plan here?"

Simple: The plan is to hold the debt ceiling hostage in exchange for other draconian cuts. Just like how they held unemployment payments hostage to extend the Bush Tax Cuts.

It's a very, very effective strategy, particularly in this case. Since freezing the ceiling would have such horrible effects, Obama and the D's in Congress will do just about anything to stop it.

When they try something as audacious as this, it is for a reason. We will discover their true target soon enough (Medicare anyone?).

Obama and the D's will keep negotiating, keep trying to meet the Repugs in the middle. Unfortunately they keep moving the goal posts, so the "middle" is somewhere near the end zone.

Posted by: Mitch on April 12, 2011 at 12:50 PM | PERMALINK

@Mitch:

Well, yes, that's the stated negotiating position. But it really depends on credibility. Republicans have no credible claim that they will fail to raise the debt ceiling. As many have pointed out, bankers would never allow it. Unfortunately, Obama and the Dems seem to have been trained at the Neville Chamberlain School for Negotiators. So they may well cave in to an obvious bluff.

Posted by: jeri on April 12, 2011 at 1:42 PM | PERMALINK

Republicans willing to risk a global economic disaster?

History proves it! They worked tirelessly to achieve the last one, many of them even personally exposing themselves to the threat of jail time by violating laws in the process to get the job done.

Posted by: melior on April 12, 2011 at 1:43 PM | PERMALINK

foghorn:
Your operating theories make sense to me.

Posted by: jeri on April 12, 2011 at 1:44 PM | PERMALINK

Kyl's merely a social cretin who got himself elected! He represents the soft-white underbelly of our electorate! -Kevo

Posted by: kevo on April 12, 2011 at 2:20 PM | PERMALINK

@jeri

Indeed.

I agree that the bankers would never let it happen. This is a bluff of the boldest kind.

Unfortunately I also agree that Obama and the D's are horrible negotiators. If they were sales reps for my company I would fire them. Can they call the bluff?

Let's hope so.

Posted by: Mitch on April 12, 2011 at 2:23 PM | PERMALINK

Why do we have the bloody ceiling anyway? It doesn't prevent debt, just makes it costlier, so that whichever party is out of power can demand concessions in order to vote to raise it.

And none of them (at least, the non-batshit-crazy ones) would actually prefer to not raise it. None of them. You usually see a few protest votes (like Obama's in what, 2006? 2008?) but only if there are enough votes to carefully prevent a melt-down.

So why not just eliminate the damned thing?

Yeah, I know; it's too useful for the political classes as a bully pulpit, etc. But at some point, the foolishness of having the ceiling in the first place should become so obvious that it can be jettisoned. Perhaps a law that eliminates it if there are two balanced budgets in a row (notwithstanding true emergencies). As long as a balanced budget is presented, there can be no debt limit imposed.

I'd vote for that. A couple of years of austerity and no debt-ceiling histrionics? Hell, yeah!

Ed

Posted by: ed drone on April 12, 2011 at 4:47 PM | PERMALINK
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