Monday, July 25, 2011

Why are they doing it?

Obama and Boehner both addressed the nation about the ongoing fight between the Republicans and the Democrats over raising the debt ceiling and how to cut the deficit.  Rather than get too involved in the content of their arguments, I think it is good to review what the Republicans are up to and why.

Refusing to raise the debt ceiling is a totally arbitrary act on the part of the Republicans.  Both parties have raised the debt ceiling as a matter of bureaucratic course numerous times.  So, why are the Republicans refusing to do so this time?  

I believe they have seized upon a strategy that can force real cuts to federal spending.  By refusing to authorize the raising of the debt ceiling unless there are real cuts, cuts beyond window dressing of "discretionary spending", cutting where the real spending is happening and growing far too rapidly, i.e. entitlement spending, they actually have a lever to force the Democrats to face up to the problem of out of control government growth of the entitlement state.  They see the U.S. as on the path of Greece, Portugal, Spain, Italy, Ireland, etc where the entitlement state took over the government and the country and killed the goose that laid the golden eggs of economic prosperity - the economy.

And I agree that the Democrats have been, and to some degree still are, in denial about the need to cut back on entitlement spending, and to do so pretty dramatically.  If we don't, the deficit, the amount we are spending beyond what we are taking in, the amount we have to borrow to pay for the government that we have chosen, will continue to explode and we will end up losing our credit rating, interest rates will skyrocket, costs of mortgages, business loans, and private loans will also skyrocket, and the economy will be crushed by the weight of entitlement spending.  Indeed, entitlement spending and debt payment will take over most of the government expenditures, and our country will decline into a shell of its former self, struggling to do the most basic functions of government with nothing left to help build for the future.  

The real problem, I believe, is that it is not only the Democratic Party, but also the voters are in deep denial about the limits of the government's ability to keep the gravy train going.  The Republicans are trying to make a splash large and dramatic enough to wake up the country to this very real problem.  

There is another, less ideological force at work here too, I believe - politics. The politics of the upcoming 2012 election.  

The Republicans want a temporary solution, with some cost cutting now, and the guarantee that this issue is revisited again during the 2012 election.  They think that they can ride this issue to victory in 2012 for victories in the House, the Senate, and the White House.

Obama and the Democrats, on the other hand, want very much to have a long term solution to resolve the issue now so that they can get it beyond the 2012 election and not have to look at it again until 2013.  I guess they agree with the Republicans that it is a losing issue for them, although I'm not sure why they think so.  I think the Republicans are deeply mistaken if they think that we are living in a Tea Party nation that is nearly Libertarian in attitude that wants government significantly out of people's lives.

The problem, the danger, it seems to me, is that the Republican tactic of being totally intransigent and thus proving to its right wing Tea Party base how serious they are could take them over the cliff by accident.  Or, should I say, it could take us over the cliff by accident, and they could end up having boxed themselves into their own rhetoric, unable to finally declare victory, get big cuts, and raise the debt ceiling, saving us from financial catastrophe.  

As I have said over and over again, it is obvious to me that the deficit is so massive that we need both cost cutting and revenue increases, and I think that will happen, ultimately, but meanwhile the Republicans are making as big a splash as possible in an effort to awaken the voting public to the need to change the contract between the government and the people, and provide less cradle to grave care for the people.  In the Republicans' minds, this is a moral cause, it reduces dependence on Big Brother and encourages more self sufficiency in the people.  In truth, we just can't afford it any more because we are out of money, regardless of the goodness or evil of the argument

I really am actually pretty hopeful that Boehner in the House and McConnell in the Senate will call the game at the last minute and raise the debt ceiling and consolidate whatever gains they have been able to attain.  And, I send some prayers in that direction.