Friday, January 18, 2013

Will It Be Over The Cliff or/and Into the Ceiling

UPDATE XIII:  As noted below, don't be CON'ed by Republi-cons claims to the CONtrary, there has been "the emergence of an influential but unofficial group that could be called the Vote No/Hope Yes Caucus. 

These are the small but significant number of Republican representatives who, on the recent legislation to head off the broad tax increases and spending cuts mandated by the so-called fiscal cliff, voted no while privately hoping — and at times even lobbying — in favor of the bill’s passage, given the potential harmful economic consequences otherwise."

UPDATE XII:  "The news of the morning is that House Republicans, at their retreat, are seriously weighing whether to agree to a short term debt limit increase. The idea appears to be that this would defer default and let Republicans stage another battle to get the spending cuts they want in a couple of months, when the deadline for the sequester looms.

At that point, the threat of default would again loom and again enter into the discussions somehow. But make no mistake: this is a major cave. It is further indication that the GOP simply isn’t willing to allow default. It reveals yet again that this whole debt ceiling hostage taking strategy is proving a major failure: After all, if you’re not willing to default, then you’re admitting the debt ceiling doesn’t give you any leverage. So why threaten to use it to get what you want in a couple of months? How will things be any different then?

As Jonathan Chait puts it: 'You have to ask yourself what the point is. If Republicans can’t threaten to shoot the hostage, what do they gain by holding new debt ceiling votes every few months? It’s either leverage or it isn’t.' The willingness to adopt a short term increase confirms that it isn’t.

Either Republicans are demanding deep spending cuts to popular programs in exchange for not destroying the economy, or they aren’t. They have fudged on this point, because they know they can’t be seen doing the former; but if they confirm the latter, the jig is up."

Read the Washington Post, No more games. Just release the hostage.

UPDATE XI:  "[T]here might be enough sane Republicans that the party will blink and stop making destructive threats.

Unless this last possibility materializes, however, it’s the president’s duty to do whatever it takes, no matter how offbeat or silly it may sound, to defuse this hostage situation. Mint that coin!"

Read The New York Times, Coins Against Crazies.

UPDATE X:  Watch as Colbert explains how "[m]inting trillion dollar platinum coins to pay off America's debt is legal in that it is not technically illegal."  Watch The Colbert Report, The Platinum Debt Ceiling Solution, in which he suggest a "bald eagle breathing fire while making love to the American flag" for the back of the coin, and for the front of the coin, the "Charmin bears, because when you pull an idea like this out of your ass, you're going to need something soft."

UPDATE IX:  "When the Treasury runs out of tricks it can deploy to avoid the debt ceiling next month, the president is in a bind: Congress has ordered him to spend more money than it has ordered him to tax. It has ordered him not to issue Treasury debt in excess of the $16.4 trillion cap. And 200 years of history, the 14th amendment, and good sense argue against the U.S. government simply not making good on its debts.

All of which is why people have turned to the platinum coin option as a way out of those constraints, should Congress not pass an increase to the debt ceiling. It relies on legislation designed to govern the issuance of commemorative coins, which allows the Treasury secretary to mint platinum coins in any denomination. $1 trillion, or $100 billion, or whatever giant number you may choose is, it might be noted, any denomination. . .

The best reason to oppose the platinum coin idea is this: It is not the way we do business here in the United States. It is the kind of insane, seemingly extra-constitutional gambit one expects of banana republics, not the wealthiest and most powerful nation to ever stride the earth. It is demeaning to all of us. . .

The platinum coin gambit could be terrible for the U.S. government’s long-term standing as a premier destination for global capital. This is a moment for Republicans to take responsibility for governing and to accept the fact that their leverage is limited with control of only one house of Congress. But if the alternative truly is default, a crazy coin option may indeed be less bad than the alternatives."

Read the Washington Post, The platinum coin idea is idiotic. That is the point.

UPDATE VIII:  If Republi-cons try to default the country by failing to raise the debt ceiling, could Obama "mint a one trillion dollar platinum coin and use it to pay the government's bills" and thereby save the world economy?  Read Gawker, Your Guide to the Trillion-Dollar Platinum Coin That Obama Can Mint to Save the World and Bloomberg, Why Platinum Coin Opponents Are All Wrong.

But even if he could legally mint the coin, should he?  The winner of the 2008 the Nobel Memorial Prize in Economic Sciences, Paul Krugman, an economist and professor of economics and international affairs at Princeton University, and an op-ed columnist for The New York Times, says:

"Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious. . .

It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable — if you’ve been living in a cave for the past four years.Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous — far more ridiculous than the notion of the coin.

So if the 14th amendment solution — simply declaring that the debt ceiling is unconstitutional — isn’t workable, go with the coin.

This still leaves the question of whose face goes on the coin — but that’s easy: John Boehner. Because without him and his colleagues, this wouldn’t be necessary."

Read The New York Times, Be Ready To Mint That Coin.

UPDATE VII:  And don't be CON'ed by Republi-cons claims to the CONtrary, "House Republicans supported the passage of the fiscal cliff deal. That’s why they let Boehner bring it to the floor. He offered them a chance to amend it, but warned that if the House altered the deal, it was unlikely the Senate would take up the new measure and House Republicans would be blamed for pushing the country over the fiscal cliff. His members blinked. They endorsed his plan to bring the final deal to the floor knowing that once it got to the floor, the Democrats would provide enough votes to ensure it would pass."  Read the Washington Post, Yes, House Republicans supported the fiscal cliff deal.  

UPDATE VI:  Next up, the debt ceiling.  "Are Republicans really prepared to let the country go into default and take the blame for crashing the economy? Sure, maybe some Tea Party Republicans are, but if GOP leaders aren’t, and the next compromise can be passed through the House with mostly Democratic votes, then all of a sudden the GOP position doesn’t look so strong, after all."

As the article notes,  even the Wall Street Journal has warned the Republi-cons, "You can’t take a hostage you aren’t prepared to shoot." And even has said "that a debt ceiling fight is a 'loser' for them."

Read the Washington Post, The debt ceiling isn’t Obama’s problem. It’s the GOP’s problem.

And since "[t]he use of hostage-taking imagery to describe the coming debt ceiling crisis is now so ubiquitous that [a writer asked] a veteran police hostage negotiator what he thinks of the looming standoff."  Read the Washington Post, A veteran hostage negotiator’s advice on handling the GOP.

As you can see, some Republi-cons enablers are concerned by the comparison. 

UPDATE V:  The so-called fiscal cliff deal failed in three ways, it did nothing about the terrible unemployment problem and big deficits, while ignoring "the advantage of the insanely cheap money the United States has access to right now."  Read the Washington Post, The December jobs report proves the fiscal cliff deal a farce

UPDATE IV:  "[T]he deal doesn’t solve any of the major issues haunting the economy: In the short run, it offers no large-scale stimulus to try to get the economy back to full employment. It offers no longer-run strategy to reduce the budget deficit to sustainable levels. And it leaves a situation in which policy uncertainty will hang over the economy, starting with the next fight, over raising the debt ceiling in about two months."  Read the Washington Post, Get used to more fiscal cliffs.

And also from the Washington Post, The fiscal cliff negotiations, in one chart, the final tally of offers and counteroffers:

UPDATE III:  From the Washington Post, All the fiscal cliff offers and counteroffers:

UPDATE II:  "Why won’t the Republicans get specific [about cuts to government programs]? Because they don’t know how. The truth is that, when it comes to spending, they’ve been faking it all along — not just in this election, but for decades. Which brings me to the nature of the current G.O.P. crisis.

Since the 1970s, the Republican Party has fallen increasingly under the influence of radical ideologues, whose goal is nothing less than the elimination of the welfare state — that is, the whole legacy of the New Deal and the Great Society. From the beginning, however, these ideologues have had a big problem: The programs they want to kill are very popular. Americans may nod their heads when you attack big government in the abstract, but they strongly support Social Security, Medicare, and even Medicaid. So what’s a radical to do?"

Read The New York Times, The G.O.P.’s Existential Crisis

UPDATE:  From the Washington Post, How the ‘fiscal cliff’ will affect your taxes, in one chart:

"Amid all the “fiscal cliff” negotiations, it’s easy to lose sight of the actual impact that various tax proposals will have on Americans.

The graph [below] summarizes the differences between various proposals on offer":

In case you were wondering, from the Washington Post, Where things really stand in the fiscal cliff negotiations:

"For the White House, the key to any deal is tax revenues — delivered at least partly through higher rates — and a long-term solution to the debt ceiling. Additionally, any big deal will have to include some stimulus, including an extension of unemployment insurance and either an extension of — or more likely, a replacement for — the payroll tax cut.

For Republicans, the key is some give on tax rates, as well as a few high-profile entitlement cuts, namely an increase in the Medicare eligibility age and chained-CPI.

It’s by no means certain the two sides will come to a 'grand bargain' before the end of the month. But if they do, the bargain will likely include either those policies outright, or instructions for Congress to work on those policies over the coming months."

But complicating the negotiations, also read the Washington Post, The GOP’s dangerous debt-ceiling gamble:

The debt ceiling, however, is proving a key sticking point, both in terms of politics and policy.

The political problem is that many Hill Republicans have convinced themselves that they’ll have the upper hand if they let the country topple fully or mostly over the cliff and then restart negotiations with a debt default looming in the background. They figure that although Obama really is willing to let the country go over the cliff, he’s not willing to let the country default and spark a global financial crisis. They are willing to do that, or they believe they can more credibly say they are, and that gives them leverage.

This increasingly influential theory is weakening Boehner’s hand, as it’s giving House Republicans who don’t want to cut a deal a way to argue that they just need to stand firm now and they’ll get a better deal later. Increasingly, there’s concern among Democrats that Boehner will cut a deal that he can’t deliver the votes for. Or that, at the last minute, he’ll back off of a deal because he won’t have the votes. That happened in 2011, when, the White House feels, Boehner cut off the negotiations over the debt ceiling after finding he didn’t have the votes to pass the deal.

Whatever House Republicans might think, the White House is all steel when it comes to the debt ceiling. Their position is simple, and it’s typically delivered in the tone of voice that Bruce Willis reserves for talking to terrorists: They’re happy to raise the debt ceiling on their own, as would be the case under their proposal to take authority for the debt ceiling away from Congress. But if Congress rejects that offer, then the debt ceiling is Congress’s problem, and the White House will not help.