Tag Archives: default

Quote of the Day

“I do fear the White House is up to something bad. … [W]e all know he loves to cave.”

A Dem leadership aide to HuffPo.

I hope he or she is wrong.  I’ve never been a huge Harry Reid fan, but I have been lately, he’s hanging tough against the crazies.

Truth of the Day

From “U. S. Fringe Festival,” Thomas L. Friedman, NYT:

“In other words, the only thing standing between mainstream Republicans and a hellish future of kowtowing to Ted Cruz, never seeing the inside of the White House and possibly losing the House is President Obama’s refusal to give in to the shutdown blackmail that Cruz % Co. have cooked up.  The more pragmatic Republicans, who know that this is a disaster for their party but won’t confront Cruz & Co., have settled on this bogus line:  ‘Well, sure, maybe Cruz and the Tea Party went too far, but it’s still President Obama’s fault.  He’s president.  He should negotiate with them.  He needs to lead.’

“President Obama is leading.  He is protecting the very rules that are the foundation of any healthy democracy.  He is leading by not giving into this blackmail, because if he did he would undermine the principle of majority rule that is the bedrock of our democracy.  That system guarantees the minority the right to be heard and to run for office and become the majority, but it also ensures that once voters have spoken, and their representatives have voted — and, if legally challenged, the Supreme Court has also ruled in their favor — the majority decision holds sway.  A minority of a minority which has lost every democratic means to secure its agenda, has no right to now threaten to tank our economy if its demands are not met.”  Italics in original.

We currently have one party that is promoting its ideology and another that is promoting its insanity.  Not good, people, not good.

Quote of the Day 2

“The whole point of Obama’s refusal to negotiate is that what Republicans are actually demanding is to fundamentally alter the power balance between the legislative and executive branches of government. If Obama caves and offers concessions to Republicans in exchange for a debt limit increase, it will clearly weaken the presidency. By contrast, if Republicans ‘cave’ and increase the debt limit cleanly, Congress will lose none of its fundamental power.

“Moreover, senior administration officials are confident that if Obama establishes the precedent that the president should yield concessions to the opposition on a threat of default, eventually the opposition will demand something so impossible that a default will happen anyhow. Taking a hard line now is the only way to prevent that.

“This is why the term ‘extortion’ is appropriate. If Obama were to veto debt limit increases until Congress appended a tax increase and a universal gun background check rider, he’d be guilty of the same. But to the frustration of some liberals he’s not. And in this case it’s not because he’s weak or a bad negotiator.

“As this shutdown proves, once parties start making demands they can be very, very difficult to back away from.

“To paraphrase one Republican, it’s easier to get into a shutdown than to get out of one. The same dynamic applies to a default. But the consequences of a default are much more dire.”

Brian Beutler, Salon

Quote of the Day 2

“The debt ceiling fight of 2011 represented a kind of zenith (if you can call it that) of Tea Party craziness, intransigence, and hostage taking.  Obama lost that battle, but he bounced back and won the presidency.  Now, even more so than the fiscal cliff battle, this year’s debt ceiling fight is shaping up as a kind of epic final confrontation – perhaps the Tea Party’s last chance to force Obama to do what the American people emphatically declared in the election that [they]don’t want, i.e., solve the country’s fiscal problems primarily by dramatically shrinking government, unraveling the safety net, and sparing the rich more sacrifice.”

Greg Sargent, “The Tea Party’s last stand?,” WaPo

Don’t Be Fooled By All the Loose Talk of Default

I want to quote from a Politico article about the GOP’s willingness to refuse either to raise the debt ceiling or to pass a continuing spending resolution, but before I do, I want to point out that their discussion of default and pretty much all you’re reading and will read about default is wrong.

In order to default, the government would have to stop paying its “public debts,” which means the servicing of our bonds.  The Treasury takes in about $200 billion in taxes every month, which is more than we need to pay those debts.  We can avoid default without raising the debt ceiling, and there is no real reason for financial markets to freak out or for our credit rating to be downgraded.

On the other hand, Social Security payments are not “public debts,” and failing to send those checks is not a default.

If you don’t have enough money to pay all your bills, but you pay your mortgage and your car loan, you may not have enough to heat that house or put gas in that car, but you are not in default on your home or car loan.

From “Double trouble:  House GOP eyes default, shutdown,” Jim VandeHei, Mike Allen, and Jake Sherman, Politico:

“House Republicans are seriously entertaining dramatic steps, including default or shutting down the government, to force President Barack Obama to finally cut spending by the end of March.

“The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter.

“GOP officials said more than half of their members are prepared to allow default unless Obama agrees to dramatic cuts he has repeatedly said he opposes. Many more members, including some party leaders, are prepared to shut down the government to make their point.”