Suffice it to say I think the GOP’s insistence on balancing the budget through spending cuts alone (in the midst of a huge recession) is not the proper course nor mathematically sound. If ultimately this negotiation leads to a substantive deal to handle the spending problem of our federal government, well fine. Ross Douthat does think there is a method to their madness. I’ll be honest – I can’t tell if it’s a clever negotiating ploy or if the Tea Party is willing to drive the economy off a cliff.
Here’s four articles that handle the debt ceiling debate in a pretty rational manner.
June 30th – Bargaining and Blackmail (Economist Print Edition – Lexington) – “On the face of it, the most powerful country on the planet, having only just recovered from a self-inflicted financial calamity of epic proportions, is marching towards another self-inflicted financial calamity of epic proportions. Unless Democrats and Republicans close their differences on taxes and spending, and Congress votes to increase the federal debt ceiling, the United States may default on its debt, an eventuality with incalculable consequences for the world economy as well as America’s.”
July 7th – Shame on Them (Economist Print Edition) – “The sticking-point is not on the spending side. It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.”
July 9th – Finding the Republicans’ Golden Ratio (Economist Free Exchange Blog) – “The 85%-15% split, which Republicans argue is optimal for deficit reduction, struck me as severe. In Britain an austerity programme split 3:1 in favour of spending has been met with street protests. The IMF programmes in Ireland and Greece do not come close to an 85%-15% split.” NOTE: Republicans now insist on a 100% – 0% split.
July 11th -Why We’re In The Soup (Robert Samuelson – Real Clear Politics) – “Just in case you hadn’t noticed, no one has elected Grover Norquist to anything. Still, he looms as a major obstacle to Congress reaching a deficit-reduction agreement needed to raise the federal debt ceiling. Norquist heads Americans for Tax Reform, a conservative group that has persuaded 41 senators and 236 representatives (all but three of them Republicans) to sign its “Taxpayer Protection Pledge” opposing any tax increase. If Congress eliminates special-interest tax breaks, the pledge requires that they be “matched dollar for dollar by further reducing tax rates.”