Why worry? (the debt ceiling)

Hey, did y’all catch NicFitKid’s comment on Friday?:

Why all the hand wringing over the debt? Debt can be managed, stop pitching softballs to Tea Baggers. Also, reducing government debt doesn’t increase employment, and the lack of jobs is what fuels fear and loathing in the current recession.

What you should be worried about is the brinksmanship in DC over the debt ceiling. If they fuck up that game of chicken, then we’re talking default and the downgrading of government bonds, so we end of having a harder time selling our debt on the market. Now that’s something worthy of charts and words.

In an unreleated swipe:
The Shuttle launched for the last time today. Shouldn’t you be dancing on its grave? Pissing on the NASA logo? C’mon, Alesh, gimme that old time anti-space program religion.

Haha, he’s right. I used to be such a fan of the Shuttle, and when I realized what a money sink it was, the whole thing turned sort of gross and detestable. It’d be like if the Prius turned out to have worse gas mileage than a Suburban, and also leeched some sort of chemical that made your children stupid.

But about the debt. Did you catch the Daily Show last night? John Stewart, in reference to the Republicans’ unrelentingness about reducing taxes, did the one about “well than why don’t we just reduce taxes to zero??” Old saw, but good point, right? But so then when DO we start worrying about the debt? We surely need to at SOME point, eh? Some point before we get to where Greece is? I mean, you scoff at the people protesting in the streets because they can’t wrap their heads around the fact that their government is out of money, and yeah their pay is being cut and their retirement age raised, but the only reason they still even have paychecks and retirement is because Germany is — reluctantly — writing checks.

So, not only is the US not at that point, but we’ll never get to that point. Mainly because we don’t have a Germany to bail us out if we need it. (Yes, China. But at least for now, China’s still a much smaller economy than the USA.) There comes a threshold to our debt that, if we reach it, Bad Shit will happen. And the truth is, nobody quite knows where that point is.

Now, I still agree that that point hasn’t arrived yet. That we need to keep borrowing money at least for the foreseeable future. That the Bad Shit which is in fact happening is at least marginally helped, not hurt, by our increased borrowing and spending. But at some point, yeah?, the opposite starts to be true. You would agree, wouldn’t you, that there is some amount of debt that would be too much for the USA? (Also, remember that while the government is not like a family, there are some aspects of national debt that do work exactly like credit card debt: while you’ve got it, you’ve got to pay interest on it, which interest is NOT INSIGNIFICANT (wanna take a guess? Go ahead, the answer is right here. That would buy a LOT of unmaned drones, brother). And also, you’re presumably going to at some point when the economy is all sunshine and roses going to pay off at least some of this debt, right? Yeah, your guy Clinton was the last guy to make a dent in it, but (a) it wasn’t that big of a dent, and (b) are you really so sure the whole thing wasn’t powered by a bubble?

But again, I agree that we need to be borrowing, spending, etc. I agree with friggin’ Krugman! All I’m saying is, in all this talk about the Moron Tea Baggers and Asshole Republicans, let’s remember that these people are genuinely worried (well, at least some of them are) about something that it is not THAT UNREASONABLE to worry about.

Oh right, the debt ceiling.

Whatever. They’re going to raise it. There’s a negotiation going on, and the Republicans are in a better negotiating position. (It’s like a game of chicken with two buses, but Obama’s bus has people on it that he cares about, and the Republican’s bus is empty and remote controlled?) You can be pissed off at the Republicans if you want, but all you’re pissed about is that they disagree with you and that they’re better at using their negotiating advantage when they’ve got it than your guys (MAN the Democrats are shitty at negotiations… remember when they won the Congress back towards the end of Bush’s presidency? Shameful shit). But overall, I wouldn’t worry about it. Everything’s going to be FINE.

4 thoughts on “Why worry? (the debt ceiling)

  1. Read my lips: NOBODY but NOBODY says that this nation’s level of debt is not a concern. Got it? Because you write as if you don’t.

    What is being said is that unemployment is much larger, more pressing problem at this moment, and should be addressed first even if debt levels must be raised further. Then, once unemployment rates start declining, address debt reduction. Not before.

    Many people disagree — they’re all wrong — but nobody disagrees that the debt level is problem. So is a hole in the roof, but not if you’re bleeding to death.

  2. Ahh, but you see unemployment rates ARE DECLINING.

    What you’re actually waiting for is for them to be declining at a rate that you’re happy with, which is a much more elusive thing.

    But let’s have it: what unemployment number would YOU be comfortable with, at which we would be permitted to start addressing debt reduction?

  3. “I used to be such a fan of the Shuttle, and when I realized what a money sink it was, the whole thing turned sort of gross and detestable.”

    You’re right Alesh, it’s so wonderful that we have no heavy lift capacity and will depend on Soyuz and Progress capsules for the indefinite future. Hitchhiking to low orbit, now that’s a first class space program! And please don’t bitch about the cost, NASA’s budget probably couldn’t even cover the executive pay and bonuses of the financial sector (although the Treasury certainly has no problem finding money for them).

    “Ahh, but you see unemployment rates ARE DECLINING.”

    Did you not see the unemployment numbers for June? Only a net 18,000 non-farm payroll jobs added for that month, when we need twenty times that amount just to keep up with people coming into the workforce? How exactly is that a decline in the unemployment rate? Or is this a new branch of math you’ve been working on? You don’t get a pass on reality just because it’s fun being a contrarian, and the reality is that employment is absolute shit right now.

    “Oh right, the debt ceiling.”

    Yeah, the debt ceiling. The routine, perfectly normal debt ceiling increases that Dems and Repubs have raised in the past as necessary because the only thing more irresponsible than running up debts is being such a baby that you refuse to pay them, thus endangering the proper function of government services and lowering the value of our debt so it’s harder to sell our bonds.

    What’s happening now is a very cynical, very desperate political play to pin all blame for the national debt on the Prez so one of the current GOP primary clowns can maybe have a shot in 2012. Which is fine, whatever, no one expects anything better from politicians. The trouble is that this play involves holding the nation’s debt hostage with the threat of default. It’s the behavior of an extortionist, not a patriot, not even a politician.

    “Whatever. They’re going to raise it.”

    Speaker Boehner’s already shown he can’t count the votes of his own party in the House when he had to back off from the $4 trillion savings plan the Prez proposed. Now McConnell’s proposing some convoluted plan to dump the decision on the White House’s plate, like a child getting rid of unwanted vegetables, all so he and his party can avoid the responsibility of voting on it. Maybe it’ll happen, maybe it won’t. It’s easy to cavalierly assume they’ll get their shit together in two weeks, but given how little influence House and Senate leadership seem to have over their own rank and file (particularly the freshmen), it’s starting to look like they are losing control of the situation. Negotiating with these guys is as confusing and contradictory as trying to simultaneously negotiate with Fatah and Hamas. Who speaks for the GOP’s twisted tribe? Boehner? McConnell? Cantor? Bachman?

    I honestly don’t trust these guys’ competence in getting negotiations back on track, and there are plenty of people in their party that would be happy to see the government default, if only to jump up and down with glee at the forced rollback of the federal government. Better break out the cat food, grandma, they may finally kill the New Deal programs they have always hated (‘cuz it’s Socialism, don’t ya know).

    In fact, when it comes to the Repubs’ attitude toward the Federal government, they sound more and more like Heath Ledger’s Joker, as described by Michael Caine:

    “Because he thought it was good sport. Because some men aren’t looking for anything logical, like money. They can’t be bought, bullied, reasoned or negotiated with. Some men just want to watch the world burn.”

  4. What NicFitKid said about unemployment (and about everything else). It was 9.1 in May and 9.2 in June [via below] but that’s not a genuine indication of how many people aren’t working, and how long many people have been out of work. What rock have you been hiding under?

    I think sensible economists (almost an oxymoron) want to see an overall rate down between 6 and 7% but more significantly, a consistent 3-month trend in that direction before relaxing.

    The scariest part is that the idiots who have pirated control of this dialog have no real grasp on how serious the problem is, let alone an inclination to address it constructively. They prefer to speak about shrinking government, the deficit, and the debt ceiling. After all, THEY have jobs.


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