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Congress

Time to Stand Firm

We are at the precipice of disaster with the debt-ceiling vote. President Obama has already pledged to cut $6 for every $1 in new revenue but Republicans still want more. What is worse, the new revenue is through closing tax breaks for special interests, it doesn’t even touch tax rates, yet Republicans are insisting that the revenue increases have to be matched with tax cuts, making them revenue neutral. Enough is enough. President Obama has made more than his share of compromises and sacrifices, it is time to call Republicans bluff.

The debt-ceiling debate is no longer about country’s budget; it is about politics. President Obama clearly wants to cut a deal but Republicans are intent on not letting him be seen as “winning” on the debt-ceiling deal. They have positioned themselves such that if they compromise on anything than Obama is seen as winning. They are petrified of violating their no-tax increase pledge and facing a primary challenge.

Democrats in Congress need to be patient. The closer to August 2nd, the day we reach the debt-ceiling, the more pressure businessmen, Wall Street, and special interests are going to put on Republicans. This is a game of chicken and the Democrats can’t be the ones to blink first. Republicans are financial terrorists and if Democrats cave in now it will simply give Republicans incentive to do it again.

Democrats are going to have to make their share of painful cuts but they need to extract their pound of flesh for them. They need to force the TEA Party freshman into an untenable position: either they vote for a debt-ceiling deal and risk a primary challenge or they vote against it and risk losing major campaign funds and moderate voters. This is a political opportunity for the Democrats and they can’t let it go to waste.

The battle going forward is over how the story is framed. Democrats need to define the issue as one of shared sacrifice. They need to talk about how the income for the extremely wealthy has skyrocketed while millions of people have lost their jobs. They need to spell out exactly what the Republicans want to cut. They need to make the cuts real and present a better alternative. The Republican plan is only popular in the abstract, they need to show people what will happen if Republicans are successful. They need to make them bleed.

Discussion

5 Responses to “Time to Stand Firm”

  1. I suggest the author of this article read Rothbard’s “The Case Against the Fed”.

    Let me make this as easy for everyone (who probably won’t lesson to me because I don’t worship Obama): it does not–I repeat: “does not”–matter if the debt ceiling is raised or not. Period. Anyone that tells you differently is lying. Why? Simple. It’s because this country has allowed itself to get caught in the worst Catch22 that this generation has ever seen. If the debt ceiling is raised, it just gives the Federal Reserve more power to print more fiat and collapse the dollar via hyperinflation. On the other hand, if you don’t raise it, the country defaults on its debt and winds up becoming the next Greece. I can hear the IMF starting their engines as I type this.

    Heck, if the dollar does collapse, we’re going to end defaulting on it anyway because our money won’t have the value to pay it off. In short, bankruptcy occurs no matter what direction we take. The only difference is that one way leads to it faster than the other.

    Of course, perhaps defaulting on our debt really isn’t the doomsday scenario that so many people think it is. If we end up going under, it may educate people on how to live within our means. we could also learn what to get rid of to stabilize this country’s economic system. Oh! Maybe ending the Federal Reserve would be a good idea. That institution is, after all, one of the primary reason we have the debt that we have today (getting rid of the State is the other remedy).

    Posted by Anarcho-libertarian | July 14, 2011, 3:49 pm
    • Too bad that debate ended 100 years ago, and virtually all economists think that argument is full of beans. But hey, if you want to think the world is flat, that is your right.

      http://www.epi.org/analysis_and_opinion/entry/economist_sign-on_letter_on_the_debt_limit/

      Actually, inflation may be the least of our worries, as deflation is a stronger possibility and a great threat to the economy.

      http://krugman.blogs.nytimes.com/2010/08/02/why-is-deflation-bad/

      Posted by Justin McAffee | July 14, 2011, 5:34 pm
      • Krugmam?! HA!!! What a joke. That piece of trash has been refuted by so many mainstream Austrian economists that it’s getting old. Try reading Mises, Rothbard, or Tom Woods. They actually have “solutions” to the problems.

        Let’s take a look at Krugman’s argument. Krugman is making the usual flawed assumption that deflation is bad because it hurts one’s ability to make a profit because prices fall. This is only the case if a business fails to adjust to the deflation. If, for example, an individual that owns company A buys a certain amount of units for 15 and sells them for 9, he makes a 6 dollar profit. If, however, deflation kicks in and the price of those units fall to 9, he can still make a profit if he buys them for 6 and sells them for 3. Again, the key is anticipating how the market will change.

        Secondly, I love Krugman’s second argument that deflation is bad because the consumer won’t buy. I’m assuming his flawed logic regarding that comes from his idea that if prices fall, people will stop purchasing and only buy items when they become cheaper and cheaper. If this is the case, then it’s laughable logic, because as it so happens, he fails to take human action into account. In this case, people “will” buy things when they need them. If, for example, someone is in dire need of a cup of coffee (for whatever reason), and they need to exchange a dollar for it, they’re not going to wait two months for the coffee to go to 75 or 50 cents. Instead, they’re going to buy it now because they it “now”. Again, the market caters to consumer demand.

        Now, you bring up the point of 100 yrs. I don’t know what you’re talking about with that, but I’ve never understood the minds of communists, so I guess I would be wasting my time with that endeavor.

        He’s the short end of it: If that debt ceiling is raised, and the Federal Reserve continues to print money, it’s over for us. Understand? Over. We’re going to end up defaulting on this debt because our money is going to be so devalued that we won’t even be able to use it to pay the debt down. Heck, we can’t even pay it off anyway, but that’s besides the point. The dollar has already lost 95% of its value, and is now only worth the equivalent of 5 cents. This is has also led to massive inflation, which we are now seeing the effects of in the price of basic commodities. Things like wheat, corn and soy have increased in price by 30 to 40%, and it’s only going to get worse. If you think that better than deflation, I have bridge in the back of my house that I would love to sell you.

        If people want to do something, here’s what I suggest: buy gold, buy silver, and buy food, because no matter what choice is made, this country is coming down in the end.

        If you don’t want to believe me because I don’t worship King Obama, fine. That’s your problem, not mind.

        Posted by Anarcho-libertarian | July 15, 2011, 1:56 pm
        • Honestly, it doesn’t matter what happens in the end. If you’re prepared, and if not, then you if you choose the consequences of your actions.

          Posted by Anarcho-libertarian | July 15, 2011, 2:08 pm
  2. Wanting Obama to fail means Republicans want the country to fail. They are nothing better than traitors acting like “little girls” who if they don’t get thir way they’re going to make their “parents” very sorry! They are not men! Not by a long shot! Obama should say “I’ve made MINE (cuts) now it’s your turn,” and leave it at that!

    Posted by Lila K Davis | July 6, 2011, 1:10 pm

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