Friday, June 24, 2011

GOP cuts Biden out of debt ceiling negotiations

This week, a financial advisor called, and in the conversation he did say that a failure to extend the debt ceiling would be a catastrophe, so a deal will get done.

The GOP bolted out of budget negotiations run by VP Joseph Biden, so the Vice President seems out of the picture. No one will comment on the golf session Saturday between Obama and Boehner.  This sort of behavior sounds familiar. We hear about it with labor union negotiations. Remember that "Ford to City Drop Dead" headline in 1975, regarding an impending default by New York City? (The teachers' union caved in at the last minute on that one.) 

The GOP seems to be walking out on the administration’s insistence of tax increases, or closing of loopholes. 
All this while at the same time Obama releases some oil from the Strategic Petroleum Reserve., although XOM more or less remained stable.

The moral scuttlebutt is that America and the West are living beyond their means, and “sacrifice” is in order. Back in 1992, H. Ross Perot had talked about “shared sacrifice”. But the GOP wants the strong (and the wealthy) to “keep that” but be held personally responsible, through the “natural family” for the less fortunate, less talented, or less able. It sounds like the Parable of the Talents.

The most vulnerable in the current budget mess, if it isn’t settled by Aug. 2, are retirees. After all, they’ve already lived, right?  It should be up to their families, right?  That’s what the GOP wants.  But retirement portfolios could collapse without a deal, and the irony is that creditors might have the legal basis to force the government to “means test” current retirees now, but the “means” will be much less.

This is dangerous stuff. It’s grown-ups playing with matches. 

Here's a ten minute PBS clip on the debt ceiling debate and why it matters:

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