Monday, September 30, 2013

"Wonkblog" on Washington Post calls government shutdown a gospel, because it makes a debt default less likely

Ezra Klein offered a little missive on the Wonkblog on the Washington Post (not to be confused with Tim Lee’s “The Switch”), with title, “The House’s shutdown plan is great news”, link here.     It’s a gospel because it makes a default in late October less likely.

Klein writes “A shutdown is, after all, just bad for the economy.  A default is catastrophic for it. You have to be insanely reckless to permit the government to default on its debts. And Boehner believes the House Republicans are insanely reckless and Obama isn’t.”'

There is an analogy to how severe weather works.  When a cold front approaches, severe weatther is less likely if it is cloudy first with some rain, so that some of the fight in the atmosphere has dissipated more slowly, lessening the violence of the real event.  
As the debt Armageddon approaches, you’ll see websites post charts on just what the Treasury receives each day and what owes.  This happened in the summer of 2011.  We’ll have a pretty good day-by-day prediction available.  The White House has refused to speculate on what it would do, for good reason.  Remember, former President Clinton said that he thought Obama should invoke powers under the 14th Amendment to borrow anyway, and there was talk of minting a trillion dollar platinum coin.  And analysts like Porter Stansberry claim that such measures would cause the rest of the world (especially China) to stop accepting dollars (as “reserve currency”) altogether, leading to immediate financial ruin for everybody.  Could a default bring on a Stansberry-like scenario?  There’s a question on top of this: it isn’t what Obama decides, it’s what the Federal Reserve decides, isn’t it?

I’m particularly galled when I hear “tea party” Republicans like the former Michele Bachmann say, “Oh, the government will just have to get by with less.”  She seems to ignore the fact that the government owes money for purchases already made.  Others say, “we can find people to do without.  Wealthier seniors don’t need their Social Security and Medicare.  They can make the personal sacrifices.  We just don’t have the money.”  John Boehner actually said this in the early summer of 2011.  That’s the way left wing (and sometimes right wing) revolutionaries talk.  That’s the kind of talk that precedes overthrows, wars,expropriation, "purification".  and confiscations, like we saw from both the Nazis and the Communists earlier in the 20th Century.  Talk like Bachmanm's is the financial equivalence of violence and force, as well as playground bullying, deciding who to label as "It".  

One fast question: Isn't there a "majority" of moderate Republicans and Democrats in the House to restore sanity?  The hardline "tea party" caucus doesn't control the entire House, does it?  And remember the hype over the "Fiscal Cliff" last New Year's?
It does look like a shutdown is coming at midnight, and Klein, at least, writes as if it could last a while. I do empathize with federal workers and cotnractors who are told that the world really doiesn't need theim all the time. (Don't say that to active and reserve military, when there are multiple terror threats to national security.)  Again, that's the message from some of the GOP.  I wrote on my IT Jobs blog yesterday that I had watched a shutdown threat while I worked for Census, and resented it.  It feels shameful to have your life taken awaty from you to meet someone else's agenda.  Look at the Palestinians on the West Bank.

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