Wednesday, July 20, 2011

"Les Six" offer a debt deal: guarded optimism that it will stick

So there are two pieces of legislation: Cap, Cut and Balance from the House, which we know will not pass the Senate, and the staged and somewhat vague “Gang of Six” proposal, bipartisan, cooking in the Senate, which the president can sign. (There was a group of French music composers called “Les Six” at one time, and there is another such group of young composers in New York now. Is there something about “The Number Six”?)  Also, “cut, cap and balance” sounds like former Washington Blade editor Chris Crain’s phrase, “piddle, twiddle and resolve”.  Try naming a bill that. Nero fiddled while Rome burned.

Wall Street was encouraged by the Senate and is steady early Wednesday.  But many observers see considerable resistance among House freshman Republicans to any deal. But most polls show an increasing disgust among Americans with Congress, and with government in general.

And this reminds me of debates I have with myself over questions I get: if I have so much to say, why won’t I run for office?  Or why won’t I help specific candidates.  Isn’t it obvious why?

I still think that there is a mentality of “throw people off the Raft of the Medusa” (an opera by Henze) among some Republicans, or maybe even in some of the president’s own statements. 

One problem is, as I wrote on my retirement blog Monday (feeling prodded by Bachmann and the Tea Party to really look at the numbers myself), the math shows that it really is possible to pay all the bond interest, entitlements, and military and federal salaries in August with no extension, but contractors won’t get paid – dangerous – for work already done (hence, down goes the credit rating); and the GOP has yet to explain how it could sustain the country very long doing this. Cancel most contracts?  Cancel all foreign aid?  Be specific, now, GOP freshmen!

But, maybe the sky doesn’t fall Aug. 3.  Maybe it falls Sept. 15 (like 2008).  But a real financial panic could set in during the meantime if deadlock continues.

It also strikes me that a lot of the debt comes from the bailouts in 2008.  Plenty of my own personal friends still insist we should never have done the bailouts.

Here’s Bloomberg’s account of the partial gospel, link

One good thing about “Les Six” and their plan (“It takes a long time to become a good negotiator”), is that the ratings agencies (especially Moody’s and Standard & Poor’s) have more or less endorsed the same solution: about $4 trillion in specific cuts in 10 years, with at least $500 billion in the next year, and a modest debt ceiling extension. Also, wouldn’t the Tea Party like to see lower tax rates for most people and the alternate minimum tax eliminated as part of the deal?  


 It's interesting to me that while Congress chokes on its job, private-business America tries to move along, ignoring the icebergs ahead. On the same day of a major setback in Congress, Facebook announces its Skype deal. "Les Six" announces its schedule for next year: more polytonal versions of Mozart and maybe "bargemusic" and concerts in condos overlooking Central Park.  I try to announce the outlines of my DADT movie concept.  Hollywood plans life after Harry Potter (maybe another "Inception"). We're back to what the late libertarian Harry Browne said in the 1990s: "government doesn't work." 
I'm not sure I follow the logic of a group called "No More Blank Checks", link

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