Playing poker over debt is wrong

[steven lloyd]

Playing poker over debt is wrong
by Gwynne Dyer
Published: August 10, 2011 7:00 AM

Nobel Prize-winning economist Paul Krugman nailed it right away: “Basically the Republicans [said] we’ll blow up the world economy unless you give us exactly what we want, and the president said, OK. That’s what happened.”

The fine print of the last-minute deal between US President Barack Obama and the speaker of the US House of Representatives, Republican majority leader John Boehner , hardly matters. There will be cuts in government spending, or rather in the rate at which government spending was projected to rise, but the big thing is: there will be no tax increase.

That is pretty bizarre in a country with a huge budget deficit and the lowest tax rate in fifty years. The normal response would be to cut spending AND raise taxes. Even the Conservative-led coalition government in the United Kingdom, the poster boy for savage budget-cutting, has done that. But not the United States.

True, the deal has averted the imminent prospect of a default on the US government’s debts, which was allegedly going to happen this week unless Congress voted to raise the legal limit on government borrowing (currently $14.3 trillion). On the other hand, the main anticipated penalty for a default, the loss of the US government’s AAA credit rating, may happen anyway, with a consequent rise in the interest rates paid by all Americans.

One could go on like this, discussing how the spending cuts will slow the already faltering US recovery from the recession and keep the unemployment rate very high (over 9 percent), but that is not really the point. It is that the Republicans have discovered a weapon, never envisaged by the constitution, that enables them to force the executive branch to submit on any issue whatever. Just refuse to raise the debt limit.

Indeed, Congress has voted to raise the debt limit 106 times since 1940, without ever trying to use it as a lever to bring the presidency to heel on other issues. But it is an immensely powerful weapon, particularly as the user does not even need to control both Houses of Congress. Since both Houses must approve the legislation, only one can block it.

It’s not clear whether the radical Tea Party faction in the Republican Party originally came up with the idea of refusing to raise the debt limit until the White House accepted its terms, but they certainly made the running after the Republican Congressional caucus adopted the strategy.

It was the Tea Party that forced John Boehner to drop the idea of agreeing to some tax increases alongside massive cuts in spending in order to bring the budget deficit under control. He is a fiscal conservative, but a sensible politician who understands that in any negotiation there has to be some give and take. The Tea Partiers just wanted take and no give, and they forced him to shift his position. Then they got greedier, and several times made Boehner demand even more concessions from the White House, presumably in the hope of making the deal so unpalatable that Obama would reject it and allow the country to default. They were certainly ready to accept a default as the lesser evil, since they believed that the immense economic damage it caused would ultimately be blamed on Obama, and cause him to lose the 2012 election.

It must be acknowledged that Obama played his hand extraordinarily badly in all this. As one blogger put it, “Just let me get into a no-limits poker game with him. I’ll walk away a millionaire.”

It should also be recognised that Boehner was quite happy to let the ideological loonies on the far right of his party serve as an excuse for his obdurate stance in the negotiations with Obama. It worked a treat, and Obama basically gave him what he wanted. Or, to be more precise, everything that the mainstream Republicans wanted, although not everything the Tea Partiers were demanding.

The implications were quite clear in the House vote on the debt limit deal on Monday. 174 Republican voted for the deal, while only 66 (almost all from the Tea Party) opposed it. But the Democrats, outraged by how the cuts that Obama has agreed to (with no new taxes on the rich) will hurt poorer Americans, split right down the middle: 95 for the deal, and 95 against it.

It begins to look possible that Obama could lose the 2012 election. He may even face a battle to be re-nominated.

Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.

[Captain Awesome]

It begins to look possible that Obama could lose the 2012 election. He may even face a battle to be re-nominated.[/i]

Could lose? Homeboy has not even a smallest chance.

[steven lloyd]

Ya, and not to defend Obama ( like he had a hope in hell with the mess he inherited ), but it will be fun to watch how well the US “recovers” if their government is replaced by “no tax increases, let’s just cut costs” thinking. Mr. Dyer is a very intelligent geo-political analyst and commentator. A more careful read to appreciate his point will not be time wasted.

[Oxl3y]

Ya, and not to defend Obama ( like he had a hope in hell with the mess he inherited ), but it will be fun to watch how well the US “recovers” if their government is replaced by “no tax increases, let’s just cut costs” thinking. Mr. Dyer is a very intelligent geo-political analyst and commentator. A more careful read to appreciate his point will not be time wasted.

I still really like him I hope he reruns after some blow hard republican wins the next election and proceeds to fail just as bad. The states is a sinking ship it doesn't matter who is at the helm it won't be a quick fix soon the public will see that.

[The Green Barbarian]

Ya, and not to defend Obama ( like he had a hope in hell with the mess he inherited ), but it will be fun to watch how well the US “recovers” if their government is replaced by “no tax increases, let’s just cut costs” thinking. Mr. Dyer is a very intelligent geo-political analyst and commentator. A more careful read to appreciate his point will not be time wasted.

I still really like him I hope he reruns after some blow hard republican wins the next election and proceeds to fail just as bad. The states is a sinking ship it doesn't matter who is at the helm it won't be a quick fix soon the public will see that.

I actually don't mind Obama either - I just wish he'd drop the Sharon Shepard routine and actually do something. He had 4 years, a huge mandate to do whatever he wanted from the American people, and control of both houses. He had the ability that few presidents had before him, to take drastic action to start to put in some tough medicine to start the long road to recovery. And all he did was get rid of "Don't Ask Don't Tell" in the US military and dramatically expand the power base of the lunatics at the EPA. Not good enough.

[Captain Awesome]

Ya, and not to defend Obama ( like he had a hope in hell with the mess he inherited ), but it will be fun to watch how well the US “recovers” if their government is replaced by “no tax increases, let’s just cut costs” thinking.

Meh. Politics in US became so entrenched that people speak in slogans and sound bites now. Cut taxes! No, cut expenses! No, create jobs!

The reality though is that Obama has VERY LITTLE CONTROL over economy. He can't fix it - he really wants to, he'd be like Superman if he did. But he can't. And govt in general can't fix things. Economy fixes itself, adjusts, and marches on. When he gets replaced by a Republican, he'll have the same challenge. If next president happens to be at the steering wheel when economy recovers and gets off the bumpy course and starts driving on a good pavement of the highway, he'll be praised as a hero, take all the credit, and Republicans will stay in power for few more terms.

I call it Gordon Campbell effect.

[steven lloyd]

The reality though is that Obama has VERY LITTLE CONTROL over economy. He can't fix it - he really wants to, he'd be like Superman if he did. But he can't. And govt in general can't fix things. Economy fixes itself, adjusts, and marches on. When he gets replaced by a Republican, he'll have the same challenge. If next president happens to be at the steering wheel when economy recovers and gets off the bumpy course and starts driving on a good pavement of the highway, he'll be praised as a hero, take all the credit, and Republicans will stay in power for few more terms.

Now that's the truth.

[grammafreddy]

Obama is a joke.

He got elected on a slogan of "Hope and Change" but he never had an action plan. He still doesn't. He says he'll have one when he gets back to Washington after his holidays but that's ... ummm ... two years too late.

He has spent like a drunken fool in a whorehouse and made promises he will not keep. He has mortgaged the souls of unborn babies 50 years into the future, so he has guaranteed financial hardship on every American citizen for the next three generations - at the minimum.

He has no idea how to cut the debt and he has done nothing to decrease spending. This last financial boondoggle did not do it, either - all it did was just say he wasn't going to increase the debt as much as he had planned to increase it.

What's to like about a guy who is going to cheat and steal your future generations' income? What's to like about a guy who, as the leader of a country, bogs it down with more poverty and higher unemployment without even a glimmer of action or a plan to get Americans working again?

He could have given the go-ahead to open up the gulf for drilling again. He could create instant jobs by allowing offshore drilling on the east coast. He could have thousands working again at no cost to the US government or its citizens - and brought in millions of tax revenue from both the oil production and from the workers who got new jobs with the oil companies - but he did not.

He could have allowed insurance companies to compete across state lines, which would lower rates for health and other insurance. He did not.

He has forced more people onto the welfare lines and created additional hardships for individual states - states that could not afford to be picking up the tab for every newly unemployed citizen as well as every illegal person with medical and food and shelter needs. He did nothing to reduce the illegal numbers in the country and when one state tried to help themselves, he took them to court to force them to back down.

He has done nothing to gain control over the massive hold the Mexican and other drug and arms cartels have over his country. The war for control for the I-15 by these people is resulting in hundreds, if not thousands, of US citizens being murdered, blackmailed, abducted and threatened every year. The I-15 runs right through the heart of the US from Mexico to Canada. Whoever controls it controls all drug and arms traffic in the country. Obama has done nothing about that but has placed additional hardships on each state along the way to attempt to deal with it on their own territory as much as they can.

He's worse than useless as the president of the United States. He's downright dangerous.

[ILBT uh-huh]

Tell it like it is, gramma.

[Woodenhead]

At least he's not as bad as gee dubya.

Seriously, I predicted this scenario would play out like it has during the presidential election run-up, no matter who got in. (him or McCain) American politics in general has been in the toilet for ages now. The water just keeps getting more fetid, and nobody wants to flush.

[kompili]

The objective has been to turn the U.S. into a failed state and use the disarray to privatize the bejeezus out of the public domain. A dysfunctional government starved of revenue and buried in eternal debt will be in no position to stand up to an onslaught from a cash-rich and super-organized plutocratic class that will insist upon the political and judicial processes it effectively owns keeping the riff raff in line. With each successful step forward in the plan, a next and more brazen one follows hard behind it. This is deliberate: it keeps its targets reeling from, and trying to respond to, the last assault while unleashing yet another upon them from a different direction. Trying to react to each one individually is a futile, energy-sapping strategy. Only a determined & comprehensive response can turn this tide; but the needed social consensus isn't there and the stimuli being fed to the masses will feature whatever myriad of distracting, irrelevant and divisive conditioning techniques the behavioral scientists can prescribe to prevent its rise.

[Al Czervic]

Obama is a joke.

He got elected on a slogan of "Hope and Change" but he never had an action plan. He still doesn't. He says he'll have one when he gets back to Washington after his holidays but that's ... ummm ... two years too late.

He has spent like a drunken fool in a whorehouse and made promises he will not keep. He has mortgaged the souls of unborn babies 50 years into the future, so he has guaranteed financial hardship on every American citizen for the next three generations - at the minimum.

He has no idea how to cut the debt and he has done nothing to decrease spending. This last financial boondoggle did not do it, either - all it did was just say he wasn't going to increase the debt as much as he had planned to increase it.

What's to like about a guy who is going to cheat and steal your future generations' income? What's to like about a guy who, as the leader of a country, bogs it down with more poverty and higher unemployment without even a glimmer of action or a plan to get Americans working again?

He could have given the go-ahead to open up the gulf for drilling again. He could create instant jobs by allowing offshore drilling on the east coast. He could have thousands working again at no cost to the US government or its citizens - and brought in millions of tax revenue from both the oil production and from the workers who got new jobs with the oil companies - but he did not.

He could have allowed insurance companies to compete across state lines, which would lower rates for health and other insurance. He did not.

He has forced more people onto the welfare lines and created additional hardships for individual states - states that could not afford to be picking up the tab for every newly unemployed citizen as well as every illegal person with medical and food and shelter needs. He did nothing to reduce the illegal numbers in the country and when one state tried to help themselves, he took them to court to force them to back down.

He has done nothing to gain control over the massive hold the Mexican and other drug and arms cartels have over his country. The war for control for the I-15 by these people is resulting in hundreds, if not thousands, of US citizens being murdered, blackmailed, abducted and threatened every year. The I-15 runs right through the heart of the US from Mexico to Canada. Whoever controls it controls all drug and arms traffic in the country. Obama has done nothing about that but has placed additional hardships on each state along the way to attempt to deal with it on their own territory as much as they can.

He's worse than useless as the president of the United States. He's downright dangerous.

Very well said and all true ! The Obama made the mistake of trying to spend his way out of trouble, and the worst part is that it was not his money to spend. Massive damage done by a guy who has no plan or clue to fix anything. It does show the power of being a good orator with a great speach writer. And of course following the "w" didn't hurt either.

[steven lloyd]

Obama is a joke. ... He could have given the go-ahead to open up the gulf for drilling again. He could create instant jobs by allowing offshore drilling on the east coast. He could have thousands working again at no cost to the US government or its citizens - and brought in millions of tax revenue from both the oil production and from the workers who got new jobs with the oil companies - but he did not.

Arctic oil-drilling given green light by U.S.
19/08/2011 8:30:00 AM
by Nevil Hunt

Despite oil spill disasters in the Gulf of Mexico and more recently off Scotland, the United States is headed down a slippery slope: drilling north of Alaska. Since the seas know no boundaries, could Canada's Arctic be at risk too?

The Gulf of Mexico was globbed and slimed with more than 600 million litres of crude oil when the Deepwater Horizon oil platform failed last year.

Today, Scotland is dealing with about 200,000 litres of oil in the North Sea, about 150 kilometres from her coastline, and the spill is growing.

Despite the disasters, the United States is on the verge of giving Royal Dutch Shell the green light to drill in the Beaufort Sea, north of the coast of Alaska.

Once Shell gets the last few permits, three exploratory wells will likely be started next summer.

Arctic water is cold and anyone trying to clean up a spill would face pack ice for much of the year, along with temperatures that preclude sending part-time workers out with shovels and garbage bags, as was the case along the Gulf of Mexico coast.

An attorney with the environmental group Earthjustice told a reporter the Arctic drilling is "a disaster waiting to happen." It's a cliché, but that's about all you can say.

The drilling is a political vote-getter in frozen Alaska. Politicians from that state seem unanimous in their desire to get drilling because of the jobs the project would create.

In Washington, the federal government wants voters to see the administration's willingness to take advantage of domestic energy sources. It's a political game with high-stakes risks.

It's easy to support Arctic drilling when the population is paying so much more than they want to for gasoline. To forego domestic supply and instead continue to rely on imports is seen as a cop out, if not unpatriotic. "Drill, baby, drill," say the driving hordes.

Shell may receive the OK for six more exploratory wells even before next summer's first drop of oil reaches the surface. With Shell's success, more companies will want in. It's just a matter of time before a mistake is made.

The Deepwater Horizon was meant to have a foolproof capping system with plenty of safety redundancies. It failed.
One news report about Shell's latest project notes that officials in Alaska have been frustrated at the delays in getting approval to drill. Democratic Senator Mark Begich, who represents Alaska, called it, "a welcome shot-in-the-arm for Alaska's long-term economic good health." Reports don't say if he mentioned the environment's long-term health.

Which leads to questions about Canada's stake in this Arctic tale.

Distances are vast in the Arctic, but the ocean is vaster. If something goes wrong in Shell's frozen playground, there's the possibility that fish and animals on our side of the international border will be affected soon after a leak, spill, explosion or other disaster strikes in Alaskan waters.

Hopefully that day never comes, but if it does, the Deepwater Horizon and the Gulf of Mexico may be considered a drop in the ocean.

http://news.sympatico.ca/oped/coffee-ta ... _/d74efdbc

[grammafreddy]

viewtopic.php?f=27&t=29627#p854693

[Corneliousrooster]

http://www.youtube.com/watch?v=tRmZ9zH- ... grec_index

Pay your %#$*'n Bills obama!

this is pretty funny and pretty much hits the nail on the head (for all gov'ts)