Column: Brewing Debt Ceiling Fight is Comically Tragic
PIERRE – Speaker of the House of Representatives John Boehner has signaled that he intends to force the President to agree to more spending cuts when next the debt ceiling needs to be raised, which should occur in May.
Never mind that the full brunt of the completely unnecessary sequester has yet to work its destructive magic on the economy; Republicans demand more needless pain. This time they say that they will settle for nothing less than cuts to Social Security, Medicaid and Medicare. This is in keeping with the budget policy proposals made recently made by Rep. Paul Ryan. As a side note, if you really want to know how honest these guys are, that Ryan proposal eliminates all the benefits of Obamacare, but still keeps the tax portions in force; so there you go.
If the implications of the political game of chicken that Republicans are trying to force the country into weren’t so tragic, the farcical nature of the whole charade would be laughable.
First, some basic macroeconomic facts; deficit spending by the government only matters when it takes up so much of the loanable funds that it raises interests rates and pushes private businesses out of borrowing the now costlier money. Deficit spending is a good thing when unemployment is high and interest rates are low, because those funds will either create jobs, or at the very least prevent some job loss.
Recently, the Federal Reserve Bank made clear it has no intention of raising interest rates from the essentially zero level they are currently at until unemployment falls to 6.5% or less, which they do not project to happen until at least 2015. What this means is that there is absolutely no sense in making cuts at this point, and there probably won’t be for at least another couple of years, because only then will interest rates start squeaking up above zero. Right now all the cutting that has been happening steadily since 2010 is actually hurting the economy, which is evident in the more than 700,000 government jobs that have been lost during that time.
The worst part is the complete hypocrisy involved in this plan to cripple the economy and hang the blame on Obama. The debt ceiling was raised 18 times under Ronald Reagan with no controversy. The great Republican icon more than tripled the national debt during his tenure with his out of control military spending and voodoo economic policy. Not to be out done George W. Bush, already forgotten by Republicans, had the debt ceiling raised 7 times, again without any showdowns threatening to close down the government or have our national credit rating downgraded. Again, thanks to a fact impervious belief in the trickle-down hoax of tax cutting our way to prosperity, two wars put on the credit card, and the bloated give away to pharmaceutical companies known as Medicare part D, Dubya nearly doubled the national debt. Where was the outrage of all the Republican deficit hawks during those times?
Every time you hear someone going on about the supposed deficit crisis, remember that they are most likely just repeating the talking points they picked up by immersing themselves in the right-wing noise machine. This was never about debt or deficits, it was only ever about preventing Democrats from getting the credit when their policies resuscitated an economy broken by financial deregulation. Laugh at their nonsense and don’t let them get away with it.
The opinions expressed in this commentary are solely those of John Gossom and do not reflect Results Radio, Townsquare Media, its sponsors or subsidiaries.