Saturday, August 6, 2011

It's always Cassandra that gets the blame

So it turns out you can't have trillion dollar annual deficits with no plan to keep them stable, (let alone reducing them) without engendering your investment risk rating.

Who knew?

And naturally the question is who to blame? The generations of politicians that steadily expanded the welfare state, bureaucratic payrolls and benefits? The crop of BushII era Republicans that tried to prove they could spend more than the Democrats? How about the Democrats who proved the Republicans were pikers when it came to spending?

Nope, not them. No the blame is the one political movement centered on reducing the size and expense of government no matter the cost.

Yes, it's not that Washington has no plan for current entitlement spending, let alone the huge upswing coming due to shifting demographics and retirement. It's not that the "recovery" has consistently had 9+% unemployment and First quarter GDP below half a percent. And it can't be that the Dems want yet another stimulus.

No the real problem is those pesky Tea Partiers complaining about spending and delaying the oft-repeated rise of the debt ceiling.

Again, Cassandra gets the blame. Here's the White House trying to play the "I told you so" game. Odd... a few months back Geithner said there was no risk of downgrade.

Blaming the Tea Party for the downgrade is like blaming the Libertarian wookie-suiters for the expansion in government. Then again maybe it is Ron Paul's fault the federal government doubled in size in the last ten years. He is being blamed for high gold prices.

Oh and it looks like Obama is so weak and the Tea Party is so strong that if we do double-dip it'll be a "Tea Party Recession". Amazing how the movement went from a handful of angry rubes, to Koch brothers plants, to a shadow movement that can thwart the President and both houses of congress. Though at the link is more Liberal griping about how Dear Reader isn't being a loud enough class warrior.

But maybe the blame will fall onto the President.
Defenders of Obama will attempt to pin the blame on his predecessor, President Bush, and on intransigent Tea Party radicals in the current Congress. But that would leave out the part in between. For his first two years in office, Obama’s party controlled both chambers of Congress – for part of that period, he had a filibuster proof majority in the Senate. During that time period, he and his fellow Democrats could have passed his supposedly ideal, long-term, deficit-reduction package -- one that represented a “balanced approach” between spending cuts and tax increases. It also could have delayed the deficit reduction for several years, so it wouldn’t have affected the current weak economy or the “investments” he considers crucial. Forget about actually accomplishing serious deficit reduction -- he didn’t even attempt it.

But what did he attempt? Well, his health care reform plan, but don't call it Obama-care because that's uncivil you baby-eating Teatard terrorist.

And Frank J, Flemming realizes that maybe the future should bear our debt burden.

Let’s look at this logically. There are three groups who could possibly pay our debt: People of the present, people of the past, and people of the future. Basically, the extremists are arguing that people of the present should pay for the debt, but that’s obviously insane. For one thing, the national debt is currently over 14 trillion dollars, and we don’t have that kind of money. If we were to even think of paying it down, we’d have to cut spending, when right now we need to be spending even more. That first trillion of stimulus money didn’t turn the economy around, so we clearly need to spend another trillion. And probably another trillion after that. Because that will create jobs by… well, I’m not sure how jobs are created. Ask Paul Krugman; he’ll explain it to you.

And the best part is that the future people can send their debt even further into the future.

But maybe it's not all bad...

Nor has S&P stumbled upon extraordinary information of which the world was unaware. The problem is not S&P. The problem is U.S. government spending and borrowing so profligate that American debt now tops annual GDP. The deeper problem, driving all this, is that American politics has become a realm in which the response to every difficulty of the human condition is for government to amass more power and dole out more money. The presumption of the U.S. government by now is that Americans cannot be trusted to arrange for their own medical care, pay for their own tuition, save for their old age, or “create or save” their own jobs. Big Brother will do that for them, even if the resulting rise of the dole and erosion of the private sector means 9.1% unemployment, almost 50 million Americans using food stamps, a stalled economy, soaring public debt, and now, a long-term credit rating lower than that of Australia, Hong Kong or France.
All the debate and Tea-Partying to date has made some difference. But it has not yet prevailed to change the profligate and power-hungry dynamic in Washington.There have been plenty of wake-up calls these past few years, but too often they have been smothered by Washington’s vast political fog. Among ordinary Americans, who has time to keep track of the trillions spent, the endless expanding government programs, or the to-and-fro over deficits variously projected over the next decade?

The virtue of the S&P downgrade is that it serves as a simple bottom line. For a long, long time, the U.S. government earned itself a triple-A credit rating. It’s gone. Downgraded. Maybe, just maybe, that’s exactly the sound bite Americans need to hear, to concentrate voters’ minds on how to get that AAA rating back.

And Roger Kimball has some snark and gets a real told-you-so on it.

When I first posted this cartoon, back in March of 2009, the U.S. economy was still in a state of shock from the great implosion of 2008 (March 5, 2009, the Dow closed at 6594) but there was lots of soothing talk emanating from Washington. “Just give me $800 billion, right now, today,” said the President, “and we will ‘invest’ in America and ‘stimulate’ the economy.” Give him a chance, NPR-The New York Times-MSNBC said. “Rome wasn’t built in a day,” etc., etc.

Well, we know how that worked out. Washington spent billions upon billions of your dollars “investing” in “green jobs,” the American auto industry, etc., and what do we have to show for it? Last month, Government Motors sold 125 of their new novelty auto, the Chevy Volt. No, that is not a typo: one hundred and twenty five. In other words, basically none.

Let’s face it: Barack Obama’s policies have been an economic disaster. Ideology met reality and reality won.

And to continue the link pit, Bill Whittle has some related thoughts.

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