Tag: politics

Moody’s tries to spell it out slowly for the Washington politicians:

The “limited magnitude” of both debt plans put forward by congressional leaders would not put the nation’s AAA credit rating back on solid footing, Moody’s Investors Service announced Friday. “Reductions of the magnitude now being proposed, if adopted, would likely lead Moody’s to adopt a negative outlook on the AAA rating,” the credit rating agency said in a new report. “The chances of a significant improvement in the long-term credit profile of the government coming from deficit reductions of the magnitude proposed in either plan are not high.”

It added that “prolonged debt ceiling deliberations” have increased the odds of a downgrade, but that the firm is still confident policymakers will avoid a default.

“It remains our expectation that the government will continue with timely debt service,” the firm said.
It also clarified that as far as it is concerned, the nation will only default if it misses an interest or principal payment on U.S. debt, not if it misses payments on other obligations like federal employee salaries or Social Security benefits.

Translation: The Republicans that sold out and put their careers at severe risk of Tea Party challenges in the primaries not only accomplished nothing, but never could have accomplished anything meaningful. If Boehner and Cantor were competent, they would have run their multiplicity of plans past the ratings agency, not just the optimistic and reliably inaccurate Congressional Budget Office.

And as I and many other financially literate economics observers have pointed out, a failure to raise the debt ceiling has ABSOLUTELY NOTHING to do with default, despite the ignorant bleatings of “economists” like Megan McCardle. The mainstream commentators have it backwards again, as it is raising the debt ceiling that makes the prospect of sovereign default more likely, not leaving it in place.

It looks like we’re going to have the chance to see how serious the Tea Party is about electorally cutting the throats of the politicians that betray it as well as their ability to actually do so:

Freshman Rep. Allen West (R., Fla.), a tea-party star, is under pressure:

“Several Tea Party organizations are working to punish conservative Republicans who plan to vote yes on Speaker John Boehner’s (R-Ohio) debt-ceiling proposal. Tea Party leaders announced Thursday that they are targeting Republican Reps. James Lankford (Okla.), Allen West (Fla.), Mike Kelly (Pa.) and Bill Flores (Texas), all four freshmen and declared yes votes for Boehner. . . . West has been particularly vocal in his support of Boehner’s plan, which many consider a surprise endorsement by the Tea Party firebrand not known for falling into line behind his party’s leadership.”

In an interview with National Review Online this morning, West was defiant. When asked about whether he is worried about the heat, he looked me straight in the eye, stayed silent, lifted his right hand and brushed off both of his shoulders, Jay-Z style.

“The Taliban targeted me, al-Qaeda targeted me and I’m still alive,” West smiled. He praised Boehner for adjusting the debt-limit bill, calling it a “good move.” The proposal, he said, “does not have tax hikes and is not a clean raise of the debt ceiling. For the first time in the history of the nation, we are having a debt-limit increase with real spending cuts. What more could you want?”

My first thought is that all I wanted was no debt-limit increase period. Increasing the debt ceiling with fake spending cuts – and as we learned from the last go-round, they are fake – serves no purpose whatsoever. My second thought is that it is eminently stupid to place any trust in anyone who runs for office. A politician will always come up with some excuse to rationalize doing what he promised he would not do.

And my third thought is: what an asshole! He’s going to strike the tough guy pose contra those who put him in office to stop more government spending? I know nothing else about the guy, don’t really care who is in Congress, don’t believe the Tea Party will be able to do anything about government spending, and I’d still like to see the Tea Party leave a smoking crater where this guy’s career used to be in 2012.

It gets even better. Apparently the real Tea Party hasn’t said boo about being betrayed.

““A press release has been issued claiming Tea Party Nation supports a primary challenge against Allen West. TPN’s name was used without permission. I will be giving a more detailed statement shortly but neither I nor Tea Party Nation supports a primary challenge against Allen West.”

In other words, the Tea Party would appear to be as worthless as the Republican Party.

UPDATE – Boehner’s White Flag passed 218-210. It would appear there are only 22 Republicans who aren’t economically illiterate. I’m sure “it was the best deal we could get” is going to sell every bit as well as George Bush’s “Read My Lips” cave in. It’s not like the U.S. is going to be less in debt this time next year.

UPDATE II – Harry Reid and the Senate refused to accept the House Republican surrender:

At the other end of the Capitol, Senate Democrats rejected the measure without so much as a debate. The vote was 59-41, with all Democrats, two independents and six Republicans joining in opposition. Moments later, Senate Majority Leader Harry Reid, D-Nev., unveiled an alternative that would cut spending by $2.4 trillion and raise the debt limit by the same amount, enough to meet Obama’s terms that it tide the Treasury over until 2013.

It should be interesting to see what the Boehner-led Republicans will try next or if they’re seriously going to go with the “unconditional surrender is the best deal we could get” theme.

Rick Perry may not be The Third Bush. He may be The Second Thompson. As in Fred Thompson. Joseph Farah is only the first Perry enthusiast to rethink his support for the potential candidate:

I was just dead wrong in all of my conclusions about the governor of Texas. I no longer want him to run and no longer believe he is a viable candidate. In fact, I will do all I can to warn the American people away from him. My view of Perry changed from favorable but skeptical to highly unfavorable overnight this week after I read his comments to GOP donors in Aspen, Colo.

Essentially, Perry said he is just fine with New York state’s decision to approve same-sex marriage.

“Our friends in New York six weeks ago passed a statute that said marriage can be between two people of the same sex,” explained Perry. “And you know what? That’s New York, and that’s their business, and that’s fine with me. That is their call. If you believe in the 10th Amendment, stay out of their business.”

Of course, GOProud, the homosexual Republican group, was quick to praise Perry for his stand. I’m sure Perry is very proud of that endorsement. What’s wrong with his answer? So much it would take me more than one 750-word column to explain. But I will attempt to address his cowardly surrender of the national culture succinctly.

If America is to rediscover its greatness, citizens of all 50 states will need to rediscover the common values that brought us together as a nation in the first place – not just all go out and do our own thing, with every man doing what is right in his own eyes. The only viable alternative is, quite literally, a break-up of the nation. What Rick Perry is advocating here is cultural surrender.

Translation: Rick Perry can forget about riding a wave of popular support from the social conservatives who brought Bush 43 to power. It’s not as if he’s got much appeal to the economic conservatives who are increasingly looking favorably upon Paul, Bachman, and potentially, Chris Christie. As for the Fred Thompson comparison, consider the results of the recent polls here and at Instapundit. Due to Instapundit’s larger readership, there were naturally more votes in his poll, with 13,599 votes compared to the 1,873 here at VP.

36% 07% Perry
20% 04% Palin
14% 72% Paul
07% 08% Bachman
06% 01% Romney

Obviously, this is a libertarian stronghold. But what is remarkable is the complete lack of enthusiasm among either readership for the candidate the media imagines to be the “frontrunner”, Captain Underoos. The strong amount of support for Perry and Palin at Instapundit reminds me very much of the enthusiasm for Fred Thompson in 2008, right up until the moment that Thompson actually threw his hat in the ring. I suspect Farah will be far from the only supporter of a hypothetical Perry campaign who will abandon ship as it becomes a reality.

However, I think that Paul’s numbers in the Instapundit poll are misleading, despite the recent poll that showed him tied with Obama among the general electorate. Until I posted a link to the Instapundit poll, Ron Paul was around 4% there; there is probably strong link between the 1,923 votes he received at Instapundit and the 1,353 he received here. Paul will win the general election if he is nominated, it’s winning the Republican nomination that presents the much greater challenge.

Even the mainstream media is beginning to bang the drum for Obama’s retirement from the 2012 campaign:

New polls confirm Obama’s Democratic base crumbles

With all of the spotlights on the high-stakes debt maneuverings by President Obama and Speaker John Boehner the last few days, few people noticed what Vermont’s Sen. Bernie Sanders said: “I think it would be a good idea if President Obama faced some primary opposition.”

At this point, I expect the main question isn’t whether Obama will step aside, but rather, if a health issue or the ever-popular need to spend more time with his family will be the excuse provided. The publicity given Sanders’s comments is yet another shot across Team Obama’s bow.

Since Instapundit is asking the question, I thought it would be interesting to see the difference in candidate preferences between our readerships.

The interesting thing about the Republican white flag is that it wasn’t even a real flag. Karl Denninger went through the details and broke it down:

NO domestic spending cuts whatsoever.

NO material changes to entitlement spending ($25 billion/year on Medicare is pointless.)

NO other mandatory spending cuts. Anywhere.

Remember, the deal was supposed to be about $2 trillion in total – $1.2 as outlined above, and then $800 billion in “revenue increases” (tax hikes.) The deal “blew up” when Obama wanted another $400 billion in taxes. We’re talking about chicken**** here folks – these “cuts” are not real, they are all “reductions in planned spending increases.

In other words, the Republicans were offering real tax increases and nonexistent spending cuts in exchange for raising the debt ceiling. Boehner and Cantor are shameless liars whose only goal is to raise the debt ceiling without letting the Tea Party and fiscal conservatives know that they have done so without any significant spending cuts.

Moreover, there is no chance of forced default. In August, there will be a projected $150 billion in tax revenue. Interest payments will only be $29 billion. That leaves more than $120 billion to spend on everything else. So, anyone who claims that default is unavoidable as of August third or anytime in August is blatantly lying.

Here we go again. Jeb Bush contemplates 2012:

“You never say never. This is a standard answer that I’ve kind of learned how to give which is — you never say never, but I never rule out being on Dancing with the Stars either … there are a lot of ways you can make a difference.”

No. Oh, please no. Not another bloody Bush. Somewhere in New York City, Kathryn Jean Lopez is burning out the batteries on her personal massager. And I can already hear Karl Rove and Dick Morris babbling complete nonsense about the Hispanic vote in my nightmares.

The House Republicans walk out when Obama refuses to accept their surrender:

President Barack Obama and congressional leaders are scrambling to find a way ahead on a debt deal after House Speaker John Boehner threw negotiations into crisis by walking out less than two weeks before the deadline to avoid a potentially catastrophic default.

A visibly frustrated Obama summoned Boehner, R-Ohio, to the White House for a Saturday morning meeting with the three other leaders – Sens. Harry Reid, D-Nev., and Mitch McConnell, R-Ky., and Rep. Nancy Pelosi, D-Calif.

“We have run out of time and they are going to have to explain to me how it is that we are going to avoid default” on Aug. 2, the president told reporters at a hastily scheduled news after Boehner’s announcement.

The media coverage of the debt ceiling issue has really been abysmal. There is absolutely no more threat of U.S. default in August than there was yesterday or than there is today. If Obama elects to default by deciding to pay for the occupation of Afghanistan or sending out Social Security checks instead of paying interest on the debt, it is no more unavoidable or necessary than a default by a private individual who decides to buy a new car instead of paying his mortgage and credit card bills.

There is a perfectly good case to be made for strategic default, especially considering how much U.S. debt is owed to its self-appointed enemy of the future, China. But it is a blatant and shameless lie to claim that a failure to reach an agreement on raising the debt ceiling, or even a budget, means that a default cannot be avoided.

It shouldn’t be hard to explain to Obama how to avoid a default. First, you collect tax revenues. Second, you pay the interest on the outstanding debts. Third, you pay for your various spending programs with whatever money you have left. Since interest was only $197 billion in 2010 and tax revenues were $2,162 billion, it is mathematically obvious that any default can only be an intentional and strategic one, the protestations of politicians notwithstanding.

Surely Lucy won’t pull the football away this time!

Republicans led by naïve supply-siders are preparing, for the third time in my life, to sell their souls on spending cuts in exchange for tax-rate reductions that are small, ineffective, and sure to be temporary. Ronald Reagan got his tax cuts, but he went to his grave waiting for those spending cuts. George W. Bush got his tax cuts, and ended his presidency with spending soaring and his entitlement-reform program in the garbage. And now certain Republicans are starting to slobber over the Gang of Six plan, because it reduces the top income-tax rate to 29 percent. Overall, the plan is supposed to be a tax increase — a $1.2 trillion one — but it sweetens the deal with rate cuts, and rate cuts turn Republicans into useless piles of goo.

The rate cuts, we are told, are “pro-growth.” Growth is the great magical unicorn that will deliver us from the burden of making hard decisions, we are promised.

But the important drivers of our deficit are entitlements, mainly centered on health care, the cost of which is growing at about three to four times the rate of GDP growth. We aren’t going to grow our way out of that problem — not at 2 percent, not at 5 percent. We’ll simply keep spending, pile up more debt, and have a debate like this again in a couple of years, if we’re lucky — or in a couple of weeks if we aren’t.

Nothing short of comprehensive reform of Medicare, Medicaid, and Social Security is going to stabilize our public finances. The Gang of Six deal contains only very vague language about “efficiency” in health-care spending, and it actually makes Social Security reform more difficult by introducing procedural barriers. It’s a terrible deal, and Republicans would be fools to take it.

As usual, the establishment Republicans are assuming that the threat of a SECOND OBAMA TERM will make 2012 THE MOSTEST IMPORTANTEST ELECTION EVAH and cause the rebellious Tea Party element to dutifully fall in line and vote them back into office. And they may well be right, again.

On the other hand, increasing numbers of Americans appear to be increasingly aware of the charade and of the irrelevance of the bi-factional game in comparison with the economic issues. If House Republicans are willing to raise the debt ceiling, then what difference does it make if the Magic Negro, Captain Underoos, or Al’s Pal happen to be seated in the Oval Office as the economy begins to deleverage?