Sunday, July 17, 2011

Default Will Destroy the Economy? Dude, That's What They WANT.

Latest Newspaper Column:

One of the more famous quotes of the Vietnam War era came out of a press conference when reporters questioned a U.S. Army major about the decision to use air strikes and artillery against a little town called Ben Tre, which was full of civilians as well as Viet Cong.

The hapless major eventually blurted out, “We had to destroy Ben Tre in order to save it.”

The quote was widely regarded as the perfect example of the lunacy of that war. But now, it seems that a group of Republican radicals is taking “we have to destroy it in order to save it” as their mantra. Except this time, it’s not an obscure hamlet in Southeast Asia that’s about to get flattened; it’s the American economy.

Think I’m exaggerating? Last week, South Carolina GOP Sen. Jim DeMint, discussing the recent debate on raising the debt ceiling, told Fox Business network that he was willing to accept “serious disruptions” in the U.S. economy to get what he and other conservatives want: tax breaks for the wealthy, cuts for the rest of us.

When CNBC host Carl Quintanilla asked Michele Bachmann, “Does it strike you that as the unemployment rate goes up, your chances of winning office also go up?” Bachmann replied with uncustomary honesty: “Well, that could be. Again, I hope so.”

A few days later, according to an article in The Washington Post, “hundreds of senior company executives and groups including the U.S. Chamber of Commerce and the Business Roundtable” sent a joint letter to the president and every member of Congress, urging them not to let the country default on its debt.

“A great nation — like a great company — has to be relied upon to pay its debts when they become due,” the letter read. “Treasury securities influence the cost of financing not just for companies but more importantly for mortgages, auto loans, credit cards and student debt. A default would risk both disarray in those markets and a host of unintended consequences.”

The letter did not, it should be noted, ask for any increase in the debt ceiling to be linked to tax or spending cuts.

Sen. Mitch McConnell also advised his party not to allow such a default. Not because such a thing would be a catastrophe for the economy, but because it would be politically bad for the Republicans.

“I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy,” McConnell told right-wing talk show host Laura Ingraham. “If we go into default, he will say Republicans are making the economy worse. … That is a very bad position going into an election.”

It’s not a bad economy that bothers McConnell, you see. He and his rich buddies will be doing fine whatever happens. But the possibility that it might affect their election chances — that really makes him sweat.

So, in a crass display of pure politics, McConnell proposed a plan that wouldn’t require tax or spending cuts. What it amounted to, basically, was, “We’ll let Obama raise the debt ceiling with a stroke of his pen while we shake our fingers at him disapprovingly, then run off to make attack ads about it.” It was a nakedly cynical ploy, but at least it would keep us from defaulting.

Nope, said House Majority Leader Eric Cantor, current figurehead of the radicals in the House. “Currently, there is not a single debt limit proposal that can pass the House of Representatives,” Cantor said in a statement Wednesday. This, after President Obama made such sweeping offers of cuts, including cuts in entitlements that had previously been regarded as taboo, that his own party was screaming blue murder.

The offer would, in the words of conservative columnist David Brooks, create “trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.” Brooks called accepting the proposals “the mother of all no-brainers.” Not only have the House Republicans said no, but they’ve also lied and claimed that the president hasn’t even proposed a plan at all.

So it’s clear that default, and the “serious disruptions” that will come with it, are what nihilists like Bachmann, Cantor and DeMint want. Unlike McConnell, they’re gambling that a wrecked economy will reap electoral benefits for them in 2012. They truly are ready to destroy the village in order to “save it.”

Problem is, that village is where we live, and you and I aren’t the ones they’re talking about saving. We’re going to be the collateral damage.


Dana King said...

Well put, and absolutely true.

Barbara said...

Welcome to Minnesota! Er ... wait.

Here the republicans shut down the government until the governor agreed to their plan to borrow money from schools and from the tobacco settlement rather than raise taxes on the 7,000 or so millionaires who have been socking it away thanks to tax cuts (while the middle class vanishes like snow in a Minnesota July).

This, by the way, is a crisis caused by previous sleights of hand used to prevent people paying attention to the $5 billion our previous republican governor ran up.

But hey! You have two crazy Minnesotans to choose from for our next president to take this strategy to the next level.

Now I will go escape into some murder and mayhem because this stuff drives me too crazy for words.

Rae Helmsworth said...

Too true, unfortunately, too true...

Dory said...

The main differences I see between Progressives and Regressives are:

Progressives put politics aside to do what's right for the country.

Regressives put the country aside for their politics.

Great article J.D.

jeroentenberge said...

Excellent piece Dusty.

The only thing I'd like to add is it won't be 'just' the American people who'll become collateral damage.

The pain is already felt by people like me, who live outside the US but do business with US based people and companies. The greenback has lost more than 20% of its value in the past 6 months. That hurts.

Indiana Joe said...

The Republicans are lucky that I've never been exposed to gamma radiation, or I would be giving them a beat-down that would make Galactus squeamish.