The Republicans are playing a cynical political game with hugely high economic stakes

[There Is No Spoon]

Shame on them

The Republicans are playing a cynical political game with hugely high economic stakes

Jul 7th 2011 | from the print edition @ The Economist

IN THREE weeks, if there is no political deal, the American government will go into default. Not, one must pray, on its sovereign debt. But the country will have to stop paying someone: perhaps pensioners, or government suppliers, or soldiers. That would be damaging enough at a time of economic fragility. And the longer such a default went on, the greater the risk of provoking a genuine bond crisis would become.

There is no good economic reason why this should be happening. America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political. Under America’s elaborate separation of powers, Congress must authorize any extension of the debt ceiling, which now stands at $14.3 trillion. Back in May the government bumped up against that limit, but various accounting dodges have been used to keep funds flowing. It is now reckoned that these wheezes will be exhausted by August 2nd.

The House of Representatives, under Republican control as a result of last November’s mid-term elections, has balked at passing the necessary bill. That is perfectly reasonable: until recently the Republicans had been exercising their clear electoral mandate to hold the government of Barack Obama to account, insisting that they will not permit a higher debt ceiling until agreement is reached on wrenching cuts to public spending. Until they started to play hardball in this way, Mr Obama had been deplorably insouciant about the medium-term picture, repeatedly failing in his budgets and his state-of-the-union speeches to offer any path to a sustainable deficit. Under heavy Republican pressure, he has been forced to rethink.

Now, however, the Republicans are pushing things too far. Talks with the administration ground to a halt last month, despite an offer from the Democrats to cut at least $2 trillion and possibly much more out of the budget over the next ten years. Assuming that the recovery continues, that would be enough to get the deficit back to a prudent level. As The Economist went to press, Mr Obama seemed set to restart the talks.

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.

Read the rest of the article here: http://www.economist.com/node/18928600?f...hameonthem

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The Republicans really are being infantile about this whole negotiation. As the article later points out, Obama has already offered an 83% - 17% split of spending cuts to revenue increases - only 2% from the 85% - 15% the Republican demagogues are yapping about. Only a bunch of reckless traitors intent on destroying our country wouldn't jump on the deal offered by Obama. Perhaps we ought to have them tried and executed for subverting our government?

[jaxx]

Remember their goal.....to make PBO a one-term president. To hell with the country and anything else that gets in their way.

There isn't a full deck among the repubs, this is basement mentality. The dregs are voting on our future.

[Andy823]

They should stop paying members of congress, take away their medical, and tell them that until they get this done, they get nothing! It won't hurt most of them since they are millionaires anyway, but some of the bone headed tea party morons who "want" to crash the economy, might start thinking better if they know their pay and medical are going to get stopped also!

[nofurylike]

mind-blowing.
thank you for posting that, TINS.