I guess the Republicans took a different message out of the recent election of a Democrat, Kathy Hochul, in the NY-26 special election. Instead of backing off, McConnell has decided to risk the collapse at our financial markets and our economy (i.e., refuse to raise the debt ceiling) unless Democrats agree to Medicare Cuts:
Senate Minority Leader Mitch McConnell (R-KY) just made it clear in a briefing with reporters on the Hill: They’re going to hold the government’s debt limit as hostage in order to back their way out of this political tight spot.
How? McConnell just announced he will not support raising the debt ceiling unless big Medicare cuts are part of the deal. Translation: Unless Democrats get us off the hook by agreeing to deep Medicare cuts (meaning Democrats can no longer attack Republicans for wanting to eliminate Medicare), then we’re going to force the federal government into default on its debt.
What if McConnell extracted substantial other cuts from the White House to achieve the GOP’s spending cuts goal? No matter, McConnell says. If Medicare cuts aren’t part of the deal, then no dice on the debt ceiling — U.S. economy and world financial system be damned.
Dear Dems: McConnell has just gone all in with nothing in his hand (that’s a poker analogy for you non-poker players). It’s a big and obvious bluff.
Besides, now is not the time to be negotiating with terrorists. And if a threat made by a person or organization to crash and burn our country’s economy, create a likely massive devaluation of the dollar, risk hyperinflation, and generate a certain a stock market crash (plus god knows what else) unless we accede to his demands isn’t the act of terrorists, I don’t know what is.
Most economists, including those in the White House and from former administrations, agree that the impact of a government default would be severe. Federal Reserve Chairman Ben Bernanke has labeled a U.S. default a “recovery-ending event” (WSJ) that would likely spark another financial crisis. […]
A shrink in demand for U.S. Treasuries would push down the value of the dollar relative to foreign currencies. While many U.S. exporters would benefit from currency depreciation because it would increase foreign demand for their goods, the same firms would also bear higher borrowing costs from rising interest rates.
A potential long-term concern of some U.S. officials is that persistent volatility of the dollar will add force to recent calls by the international community for an end to its status as the world’s reserve currency. […]
Most experts agree that the potential negative consequences of a debt-limit debacle (FT) are much greater and far-reaching than that of a shutdown–particularly given the risk of a government default that would jeopardize the full faith and credit of the United States.
This is such an obvious ploy for political cover that even a lousy poker player like me can see it for what it is: pure unadulterated bullshit. Dear President Obama, don’t let these tin horn bullies get away with this. Stand your ground. Let America know what a nasty little political game McConnell and his Republican friends are trying to play. Let them know who is gambling with our future and who wants to protect our nation.
In addition, other Dems need to step up. Anthony Weiner would make a perfect front man to get the message out that the Republicans would rather see our country go up in flames than preserve Medicare.
Update [2011-5-27 14:27:26 by Steven D]: JenS has a nice message you might want to email your Democratic Senators and Representatives:
Senator McConnell has announced that unless deep cuts to Medicare are included in the debt ceiling limit legislation, he will not agree to any other solution.
Please, please, please do not give in to this terroristic threat to one of our nation’s most important safety nets.
The Republicans are on record as wanting to destroy Medicare and Medicaid; to push healthcare costs onto seniors and their families, further eroding our livelihoods, our retirement funds and the health and welfare of seniors and the disabled.
When will their heartlessness be recognized by all caring Americans? DO NOT GIVE IN, SENATOR! This is blatant hostage taking. Let the Republicans own their own mess. No enabling!
I recommend sending any strong worded message you can to our Democratic Leadership to let them know capitulation to McConnell’s outrageous demands is not an option.