Is the Debt Ceiling Unconstitutional?

Once again, the primary cause of the increase in the debt since 2008 is the reduction in tax revenues and increases (which I should have mentioned before) in expenditures on the automatic stabilization programs such as unemployment, food stamps, Medicaid (more poor people, more Medicaid spending, and even the more people taking lower benefits to get Social Security at age 62 due to the recession-going-on-depression. We could stop paying the automatic stabilizers, and the resulting increases in poverty, unemployment, etc would make society poorer, thereby reducing tax revenues even more. Without the added spending, we'd be much closer to the gold, canned goods and firearms economy that so many folks seem to long for.
Only robust growth can really make dents in the debt total, as it did after WW2 and during the late '90s. Even Bill Gross is advocating maintaining government spending levels. It's hardly a radical notion.
Perhaps the debt ceiling will not be raised, and the government will spend accordingly. Then you'll see an end to stagnation, and the jump start of a real recession/depression -- leading to yet more debt.

 

I'm not a big fan of any solution that keeps Democrats and Republicans from sitting down like grown adults and hammering it out. This Constitutional "solution" sounds like a "solution" that isn't a solution at all. I don't think Wall Street and the creditors will buy it for one second.

I know, I know, perfect world and all, but at some point, the factions on the Hill need to compromise and get their shit together.

I imagine this will happen as soon as the big money donors that support mostly GOP candidates see their own profits in jeopardy and make the GOP make nice.

 

Ragu, we are not Greece because from what I understand from my Wall Street friend (yeah, the one who is stockpiling gold and silver in Swiss banks and now is considering buying "farmland" for the coming economic shitstorm), almost no one who might be even considered middle class in Greece pays hardly any taxes. That is certainly the way we're heading though as millionaires and billionaires demand to pay less and less tax and get more involved in the political process (read dump money into it) to make sure they keep paying less tax. As for the debt ceiling, the Republicans better stop dallying around and raise this thing or, according to my friend, we are all in for some really bad times.

 

It's also the populist school of fiscal management. Tell the voters they can have their cake and eat it too. They can have limited government and less spending, but they can also have their Medicare and Federal Earmarks and the most kick-ass military in the world. It tells voters what they like to hear, which keeps them happy and keeps them pushing the button for you when they go to the voting booth every 2-6 years.

Both sides are going to have to cut into their political sacred cows. Democrats will have to cut or curtail entitlement programs that they've held dear for generations. Republicans will have to cut defense spending and, yes, let the Bush tax cuts and other tax breaks expire. Outside analysts of both liberal and conservative political persuasion agree on this.

Unfortunately, politicians are the ones who make those decisions. And politicians care about one thing and one thing only - winning their next election and keeping (or gaining) the perks of political power. To hell with the big picture. To hell with the long-term health of the country. To hell with making serious, lasting repairs to the many problems that plague this country. It's all about scoring the political brownie points and raising the money they need to win the next time their name appears on a ballot. Mitch McConnell basically said as much last November when he said the GOP's goal for 2011 and 2012 is to "make Obama a one-term President." Ditto for Democrats when Bush was President.

 

I'm betting if Reagan and O'Neill were negotiating, we'd probably have a deal. Now, though, it's tough to have lunch with someone from across the aisle without risking a significant primary challenge.

 

No kidding. Utah's Bob Bennett, while opposing the Affordable Care Act and ultimately voting against it, worked with Oregon Democrat Ron Wyden on an alternative idea. His reward was finishing 3rd at the state's GOP convention last year and not even qualifying for the primary, never mind the general election.

Utah's senior senator, Orrin Hatch, worked with the late Ted Kennedy on CHIP. He may suffer Bennett's fate when he's up for re-election next year.

 

Absolutely. They may have disagreed a lot but they always realized they were Americans first before being Democrats and Republicans.

 

Geithner pulls out the Republican Bible. They cringe as if they are vampires.

http://www.huffingtonpost.com/2011/06/30/tim-geithner-14th-amendment_n_887925.html

 

Great take on the financial crisis that's leading to all the current mess:

http://www.washingtonpost.com/opinions/the-real-causes-of-the-economic-crisis-theyre-history/2011/06/27/AG2nK4pH_story.html

"The contrast in fortunes between those on top of the economic heap and those buried in the rubble couldn’t be starker. The 10 biggest banks now control more than three-quarters of the country’s banking assets. Profits have bounced back, while compensation at publicly traded Wall Street firms hit a record $135 billion in 2010.

Meanwhile, more than 24 million Americans are out of work or can’t find full-time work, and nearly $9 trillion in household wealth has vanished. There seems to be no correlation between who drove the crisis and who is paying the price."

 

It's precisely because those few banks have become so colossal that their CEOs deserve to be sopping up every available penny. </crossthread>