AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (18 comments)

  1. Seattle Sam

    You sound a bit like the alcoholic who thinks sobering up would be so painful that he might as well drink himself to death.

  2. Goldman Sachs would hate if we quit printing fake money and charging “interest” on it to the Federal Reserve because that’s their Cash Cow. How about CAN the Federal Reserve and have the Treasury print the money? Better yet, tell the Federal Reserve that to manage our money, we’re going to stop payments (extortion) to the Federal Reserve BANKSTERS? That’d probably save enough to make us able to live within our budget.

  3. Todd Mason

    Nice economy you got there, Bud. It would be a shame if something happened to it.

      1. Todd Mason

        Well, that makes all the difference. Let’s p*ss away our risk premium next week and be done with it.

  4. There is only one possible silver lining I can see in this ridiculous situation. A default by the U.S. and concurrent sell-off in world markets, plus the dramatic increase in interest rates, not to mention the failure of the government to pay military families, social security recipients, etc., would be so shocking to most Americans that it would marginalize the GOP for a generation. Most people would become finally convinced of the total inability of the GOP to govern. The electoral backlash might be enough to return some sanity to Congress.

  5. Well if GS says XYZ must be so … then gee it must be so! Not. GS = modern-day Banksters who simply trade all these markets with super-computers, long and short algorithms. Good writer JP but if the best you can do is reference GS to reinforce your point, then you have lost your point.

  6. Rob Tanner

    Well if Goldman Sachs says so, it must be true.

  7. Sgt. Friday

    This article didn’t need to be written.

    I guess Mr. P. is having trouble getting his phone calls returned, so he’s rolling more Democrat these days.

    The Republicans are not going to allow the country to default. But they have made a point to voters that the deficit continues to grow, thus the need to raise the debt limit. That serves a political purpose.

    In the meantime, they have focused attention on ObamaCare.

    My guess is that they will gain some small advantage from this brinksmanship. Given the headline on the front page of the WSJ today, I can imagine that the Democrats decide that the path of least resistance is to institute a delay.

    Per the debt limit again, the assumption is that the Republicans would be blamed. Politically, that may be true in the near term. But in the history books, it won’t look like that.

    In the history books, it will look like the country defaulted, when Barack Obama was president. Who remembers, who the Speaker of the House was during the Civil War, or WWI or 100 days?

    I am sure that President Obama realizes that.

  8. I agree with Sgt. Friday, it was not the Democrats who got the blame for the housing collapse, Bear Stearns and Lehman bankruptcies in 2008 even though they were the majority party in Congress. The president takes the credit or the blame for the economy and if Obama won’t head off a default by serious negotiations with the GOP he will be responsible in November 2014 not John Boehner.

    1. Todd Mason

      So the 70 plus percent of americans who don’t approve of a govt shutdown meant to derail Obamacare are going to forget Ted Cruz in a year? Remember the “unskewed” polls of 2012? Well, you are delusional again, and digging yourself a deep, deep hole.

  9. The debt limit law cannot be faithfully executed, except by refusing to faithfully execute the law in general. For example, in 2011 an AEI scholar, Benjamin Zycher, writing in National Review Online’s blog The Corner, recommended complacency about breaching the debt ceiling:

    “Of course not all bills would be paid; but how many people will die in the streets if the Departments of Agriculture, Commerce, Education, Energy, HUD, Interior, Labor, Transportation, and the EPA are shut down for, say, a month?”

    If the Congress passed a bill to shut down these agencies, and the President signed it (or the Congress overrode his veto), then that would be fine. But in the absence of such legislation, an executive branch decision to shut down these agencies would be illegal and unconsitutional.
    If a law cannot be obeyed except by disregarding the Constitution, then that law is incompatible with the Constitution, or unconstitutional. Therefore, the debt limit statute is unconstitutional, Congress has a duty to repeal it, and barring such action the President has a duty to disregard it.

  10. Benjamin Cole

    The Banana States of America…defaulting on payments, ferocious security and uniforms everywhere, palatial estates and million-dollar weddings…where is Spiro Agnew when you need him?

  11. So we raise the debt ceiling again, the drunken sailors continue their binge, and we’re in the same spot again next year. Sorry. I don’t buy it. Cold turkey is the only way to stop our spendthrift federal government when practically all members of Congress are in the pocket of one or another big business that wants more handouts, or are bent on using government largesse to buy continued votes–or both.

  12. Dorine McKinnon

    Well our parents were known as the Greatest Generation, and we will be remembered as the Greediest one. The ones who continue to bankrupt the country we will leave to our children and grandchildren. The one that will leave them a mountain of debt, an overwhelming regulatory load, and for the first time in the history of this country our children and grandchildren will have to endure a lifestyle that is worse than our own. All because we allow our politicians to sell us on irresponsible fiscal policy that leads us to hand them the bills for our credit card expenditures…

    The GOP is standing for spending cuts and the same deal for individuals that the President and Democrats gave big business. In addition, they are correct in that the President’s 72% subsidy for the richest among us, the ones who wrote and passed the ACA law should be happy to be the first to enroll in it. If they aren’t, then it should be repealed.

  13. Don’t forget an even larger decrease in government spending after WWII. Government spending was greater than 50% of GDP in 1945 but down to 11% of GDP a few years later. Yes, there was a recession, but it wasn’t a disaster.

    Check out my blog “A New Civil War: No More Debt” at

    http://gulfcoastcommentary.blogspot.com/2013/10/a-new-civil-war-no-more-debt-no-more.html

    Thanks,
    Doug

    1. Todd Mason

      Of course there was the small matter of five years of pent-up consumer demand in 1945.

      Anyone else see the irony of a guy who spent his career in the oil industry decrying the work of lobbyists? http://www.cato.org/publications/commentary/eliminating-oil-subsidies-two-cheers-president-obama

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