Republican delusions

Among the depressing features of this whole shutdown mess is the number of Republicans who are somehow managing to convince themselves (through what, exactly?  voodoo economics?  sheer force of will?  obtuse wishful thinking?) that passing the debt limit wouldn’t actually be bad for the economy.  Especially sobering is that our NC senior senator, Richard Burr, a chamber of commerce Republican if there ever was one, is joining in with the Tea Party denialists:

WASHINGTON — Senator Richard Burr, Republican of North Carolina, a reliable friend of business on Capitol Hill and no one’s idea of a bomb thrower, isn’t buying the apocalyptic warnings that a default on United States government debt would lead to a global economic cataclysm.

“We always have enough money to pay our debt service,” said Mr. Burr, who pointed to a stream of tax revenue flowing into the Treasury as he shrugged off fears of a cascading financial crisis.

Uggh.  Of course, people who actually understand economics (or at least listen to those who do) know better.   But here’s the best, from the wonderfully-named Yoho:

Representative Ted Yoho, a freshman Florida Republican who had no experience in elective office before this year, said the largest economy on earth should learn from his large-animal veterinary practice.

“Everybody talks about how destabilizing doing this will be on the markets,” he said. “And you’ll see that initially, but heck, I’ve seen that in my business. When you go through that, and you address the problem and you address your creditors and say, ‘Listen, we’re going to pay you. We’re just not going to pay you today, but we’re going to pay you with interest, and we will pay everybody that’s due money’ — if you did that, the world would say America is finally addressing their problem.”

Right.  Because nothing like taking care of horses and livestock to help one understand the intricacy of global financial markets and macro-economics.  Lord, help us.

About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

13 Responses to Republican delusions

  1. Agent 54 says:

    There is no right, there is no wrong, there is no good, there is no bad, there is only Funny and Not Funny. Anthony Weiner is Funny. http://agent54nsa.blogspot.com/2013/07/and-weiner-is.html

  2. pino says:

    Of course, people who actually understand economics (or at least listen to those who do) know better.

    Except I think Burr is right.

    Every month we bring in revenue. And every month we have to service our debt. If the revenue we bring in exceeds the amount due on the debt, we can afford to service that debt.

    If we don’t end up paying the ill on the debt, that would be due to a decision being made by someone.

    • Steve Greene says:

      Like much in life, it’s more complicated than that. I’ll stick with, you know, economists.

      • pino says:

        I’ll stick with, you know, economists.

        As luck would have it, my wife and I had an appointment with our financial adviser this afternoon. He suggested selling a few positions, taking some money from our cash funds and investing it in the market.

        I asked if now was the time, perhaps we should wait until we see if we default.

        His response was that there is no belief by anyone that the US would default on the debt. And short of that, the markets are not reacting to shutdowns, partial or not.

        No one thinks that we’ll default on our debt. The only ones saying it are posturing and scaring children into bed.

      • Steve Greene says:

        1) I love my financial adviser. He’s made me a lot of money. But he’s no economist.
        2) It’s not because crossing the debt limit wouldn’t be bad, it’s because they don’t believe deep down Republicans are crazy enough to make this happen. They’re wrong.

      • pino says:

        It’s not because crossing the debt limit wouldn’t be bad, it’s because they don’t believe deep down Republicans are crazy enough to make this happen. They’re wrong.

        I don’t think that played into the calculus. He specifically cited the money coming in and the amount required to to service the debt.

        There will be no default.

      • Steve Greene says:

        Again, I’ll stick with economists and such over financial advisers. My financial adviser in 2009 thought Obama was going to eliminate all the Bush tax cuts. I should have made him a bet on that.

    • Alex says:

      The point is that after a certain date, our debts become more than our incoming revenue. That’s why it’s called a “debt ceiling.”

      There’s definitely some room to debate about when exactly that will happen, because no one knows for sure–it’s day-to-day. But there shouldn’t be any debate that once you hit that limit, there will be problems.

      This idiotic notion that we can pay some debts (i.e., our treasury bond interest) and not others is just that–idiotic. Let’s set aside the fact that most people have said it’s not technically possible and let’s EVEN set aside the fact that it’s probably not constitutional for the executive branch to pick and choose which debts to pay. Heck, I’ll go even farther and set aside the huge likelihood that the financial markets would tank and the economy would go into a tailspin. Ignoring all that, how is this going to play out?

      On paper, it looks exactly like the current (partial) shutdown — the government pays for some things and not others. But now it’s picking and choosing between the things that are essential or that can’t be cut back — bond debt, social security, defense, Medica(re/id). The Republicans went batshit crazy and pulled back on their plans when things as simple as national parks and back pay for workers was on the table. What’s going to happen when the ante goes up even more?

      Republicans voted for this budget! They don’t get a mulligan. And they certainly don’t get to do it while using the debt ceiling disaster as leverage.

      I say Obama should veto any raising of the debt ceiling until we get higher capital gains taxes, cap-and-trade, and single payer. How is that different?

      Rant over.

      • Mika says:

        Yes, nice rant. I loved the expression “batshit crazy”. I don’t know if there is a better way to describe the republican mindset right now.

      • pino says:

        The point is that after a certain date, our debts become more than our incoming revenue. That’s why it’s called a “debt ceiling.”

        This is true – and I agree with you. At a certain time, we will no longer have the authority to incur more debt. And we’ll have decisions to make.

        But there shouldn’t be any debate that once you hit that limit, there will be problems.

        The thing is, there are people who don’t see this as a “bug”, they see it as a “feature”.

        This idiotic notion that we can pay some debts (i.e., our treasury bond interest) and not others is just that–idiotic.

        Some people call it budget balancing.

        Let’s set aside the fact that most people have said it’s not technically possible and let’s EVEN set aside the fact that it’s probably not constitutional for the executive branch to pick and choose which debts to pay.

        Of course it’s possible. We are, in essence, doing it now. As for the Constitution, the President is exercising discretion today. Some sites are allowed to open and others are allowed to be closed.

        Heck, I’ll go even farther and set aside the huge likelihood that the financial markets would tank and the economy would go into a tailspin.

        As you have already mentioned, a non-default debt ceiling hit would look exactly like what we are seeing today. And the markets are fine.

        How is that different?

        Well, inn that scenario, the man is actually negotiating. How’s THAT for different.

  3. Mike from Canada says:

    Amazing how quickly Republican propaga… ah, ‘talking points’ is picked up by the base. And one has to wonder, do they really think about this? Have they really considered that they are willing to risk sending the US and world economy into a tailspin on the chance they “think they might be right”.

    “I think it’s not loaded, aim it at me and pull the trigger”.
    I would point out that more then a few Republicans stated that they would _NEVER_ allow a default. Now the official talking point is “It won’t be that bad”.

    At first this was all about the ACA. Now after fumbling around while looking like complete buffoons Republicans have decided that it’s all about negotiating to reduce the debt and deficit. Republicans had the opportunity to negotiate. Instead they refused, deliberately delayed so they could have the leverage they have now, except their initial demand was to kill (or defund) the ACA.

    Most rational people would realize that the Republicans are either not rational or simply liars.
    If the debt and deficit was the crisis they claim it is they would allow revenue to be raised.
    They would not have given billions of dollars in farm subsidies and subsidized crop insurance (ACA for corn) to farmers, in fact increased it over previous years for large wealthy corporate farms and millionaire farmers. And that was one of the few bills Republicans managed to pass because of their own party’s infighting.

    Republicans are not against the debt or deficit, they are against social programs. They don’t mind spending money on their beloved programs. Just not programs anyone else wants.

    That’s their idea of governing.

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