I wish I felt comfortable saying, “No, Donny, these men are nihilists, there’s nothing to be afraid of,” but their blithe willingness to mess with the debt ceiling and our credit rating concerns me.
There are about 30 Republicans — a minority, but enough to stymie legislation — who have stood firm against legislation that doesn’t affirmatively defund Obamacare. Their sights are now shifting to the debt ceiling, and some are beginning to say they are willing to ignore the implications of hitting the borrowing limit.
“I am,” Rep. John Fleming (R-La.) told POLITICO, when asked if he’s willing to forgo raising the debt ceiling without a delay to Obamacare. “Technically, it’s not possible to default because there’s always enough revenue to cover the interest. If we defaulted it was because the president chose to default, not because we ran out of money.”
Fleming said “nothing happens” if the debt ceiling is reached. Asked about market fallout, Fleming insisted both parties will suffer equally at the hands of irate American votes. “We all pay a price for that,” Fleming said.
It should be noted here that credit rating agencies are in the business of estimating your likelihood of defaulting on your debts. They don’t just sit around and wait for you to welsh on your bills before they downgrade your credit rating. They make pro-active determinations so that lenders have some idea how creditworthy you are before they give you any money. The more risk there is that lenders won’t be repaid, the more interest they are going to want on the loan. That is why Standard & Poor’s downgraded America’s credit-rating in August 2011 even though we never defaulted on our debts.
If you care about our nation’s credit rating, you know it is irresponsible to even talk about not raising the debt ceiling because that kind of talk, by itself, can be enough to cause a downgrade. It happened once, and it will probably happen again.
Rep. Fleming makes an odd assertion when he says that it is impossible to default because we can always prioritize the interest payments. Does he think we can stiff government contractors, Social Security recipients, medical doctors, government employees, and everyone else the government owes money to without it having any impact on people’s willingness to loan the government money?
It’s also odd that he says in one breath that “nothing happens” if we run out of money, and in the next breath that Americans will be irate. If nothing would happen, then Americans would have no reason to be angry.
This kind of detachment from the world of objective facts is why I am always tempted to accuse these folks of nihilism, but it is clear that they do believe in something. It’s also clear that we have plenty of reason to be afraid of what they believe, because they are totally reckless.
I suspect that the ACA is actually something a side issue for many of these extremists. Maybe they just want to shut down the government and all this righteous talk about the ACA is just rationalization. I mean, that’s the logical endpoint for their ideology, such as it is. Remember how we all thought there was no way they would tolerate the sequestor, what with the huge hits to defense spending? It seems like not many analysts are considering the possibility that the Republican base in the House might be simply talking itself into shutting down the government indefinitely. Because that will teach the moochers and the takers and the libtards a lesson.
When you hate and despise the modern state (i.e. Big Gub’mint), then not only do you not care about protecting the gub’mint’s creditworthiness, you act to undermine it.
Wrecking the nation’s credit fits nicely into the long term goals of deranged “conservatives”, thus the Starve-the-Beast rationale of the John Flemings (R-La). It does not exactly help the Wall Street Wizrds, who use Treasuries as the basis of most of their schemes and scams…might be time to find another baseline “product”, Wizrds!
It also should be noted that in the last round of financial meltdown we found out that credit rating agencies are utterly corrupt, rating securities the way that the folks paying their fees want them rated.
So who is paying the fees on the credit ratings of US government debt?
And what links do they have to the Republican Party?
It’s not nihilism. Someone is going to make a bundle of dough off of betting on how this crisis plays out. And they don’t care about the devastating effects of their action.
Those 30 Republicans aren’t principled; they are tools.
The best strategy this time is for the President to argue that Congress sets the revenue levels and Congress sets the expenditure levels. It’s up to Congress to balance the budget if they want it balanced. And that by efficient administration, he has delayed the day that the debt limit is reached. That the Democrats in Congress are who they should be negotiating with, not the White House.
And then he should think about cutting back the national security and intelligence institution budgets of their fat. Unilaterally as administrative actions. Start cancelling large defense contracts.
In, oh, Texas, Mississippi, Louisiana…
They’re going to claim President Obama is playing politics with the cuts no matter what, so why not actually play hardball politics and target the pain?
Washington State, California—one doesn’t have to be terribly selective about states. Most large programs have wired the Congress for support from all of them. The idea that the defense industry is concentrated in the South has not been true for about 20 years. Although hearing Rick Perry scream about losing federal funds is always amusing.
This is also posted at Political Animal.