Obama Losing Patience as Republicans Panic
The public supports tax increases for the wealthy
On Wednesday afternoon, Obama finally stood up at the bargaining table and walked out of the stalemated budget talks, telling House Majority Leader Eric Cantor (R-Va.) that he will "take this to the American people" unless the Republicans showed a real inclination to compromise. Exactly what the president meant by that remark is not yet clear, but some leading Republicans have now realized that pandering to their party's hard-line base could have serious consequences for them as well as for the country.
Political schizophrenia broke out among the Republicans on Capitol Hill even as Obama confronted them in the White House. In the Senate, Minority Leader Mitch McConnell (R-Ky.) proposed a near-complete surrender, with a three-step maneuver that would allow the debt ceiling to rise while still permitting the Republicans to pretend that they disapprove.
Seeking to justify this panicky abandonment of his own tough-sounding rhetoric a week ago, McConnell told right-wing radio host Laura Ingraham that blowing the Aug. 2 debt ceiling deadline could lead to the same political result as the government shutdowns of the Clinton era—only perhaps worse.
Default Would Create Permanent Damage
A faithful servant of big money, McConnell appears to have realized that a Treasury default—unprecedented in our history—could cause permanent damage not only to the nation's credit and the world economy, but might well ruin the Republican Party, too.
Noting that President Clinton easily won re-election the year after he faced down a Republican caucus in a budget debate that led to two government shutdowns, McConnell predicted that Obama "will say Republicans are making the economy worse. ... It is an argument that he could have a good chance of winning, and all of a sudden we have co-ownership of the economy. That is a very bad position going into the election." Letting America default is a bad idea, he said, because it "destroys the GOP brand."
In other words, American voters might blame Republican candidates for a worsened recession, caused by their ideological obsession and partisan selfishness. Voters might finally express their disgust with Republican legislators who worry more about the mindless raving of Michele Bachmann than the expert opinion of Ben Bernanke, the Federal Reserve chairman who outlined the consequences of default in Congress on Wednesday. As outlined by Bernanke, whose own Republican credentials are impeccable, the ominous storyline should not be difficult to follow even for the average politician.
Bernanke told the House Financial Services Committee that default would cast grave doubt on the value of the Treasury bond, which "is viewed as the safest and most liquid security in the world, and the notion it would become suddenly unreliable and illiquid would throw shock waves through the entire global financial system."
While Bachmann may disparage such warnings as "scare tactics," the threat that default portends for everyone from grandmothers depending on Social Security checks to the struggling economies of Europe and Japan is real. Indeed, its effects are already being felt.
Where the president's mounting frustration will lead remains to be seen. What did he mean when he told the Republicans not to "call my bluff"? Although Obama, the constitutional law professor, would prefer not to invoke a controversial 14th Amendment power to overrule Congress and raise the debt by fiat, he can now cite McConnell (and many other conservatives) in his defense.
Should the Republicans in the House someday seek to impeach him over such a move, he could honestly reply that he was responding to a clear and present danger to the nation and the world—and that the leaders of their own party in the Senate had agreed with him.
Americans who broadly oppose default, and who overwhelmingly favor increasing taxes on the rich to avoid it, might well be persuaded by that argument.
© 2011 Creators.com
I would expect the real movers and shakers to want the government to default, would want everyone else's interest rates to go up. Then the businesses that are sitting on all that cash could call the shots, run the panicked American people on the business owners terms, institute a new brand of corporate slavery, enslaving even the white middle class.
What the TEA Party working class, Middle class, small business class majority really ought to demand is lower taxes on personal incomes, up to the 300K level, fixed, 35% tax on the personal taxes on the group between 300K and the 5 million level, but stick it to the Gross Personal income of the CEO class, bring back the 50-70% bracket for them. Corporate taxes, which is on net profit, not gross receipts, can basically drop to zero. If the profits are knocked down to zero because the company comptrollers decided to pay it out to people, then it will be taxed then, as personal income of the people receiving it. --- Get the picture? Make them pay when they attempt to remove the money from the company, not use it in the company to improve it, buy capital equipment (factory jobs), expand the building (construction jobs), hire workers (more jobs), buy quality materials (domestic jobs) instead of cheap materials. Got to give better value to their customers by better quality products, not sub-standard, "take it or leave it, you got nowhere else to go" products. Want to spend labor dollars where it is taxed as little as possible? Then pay it as lots of working class jobs, people who buy local, don't concentrate it in one CEO paycheck that is not spent locally (tax it high to prevent that from happening.)