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Thomas Sowell says it’s time to get rid of the debt ceiling.
… Regardless of what it is supposed to do, what the national debt-ceiling actually does is enable any administration to get all the political benefits of runaway spending for the benefit of their favorite constituencies — and then invite the opposition party to share the blame, by either raising the national debt ceiling, or by voting for unpopular cutbacks in spending or increases in taxes.
The Obama administration is a classic example. When all its skyrocketing spending bills were being rushed through Congress without even being read, the Democrats had such overwhelming majorities in both the Senate and the House of Representatives that Republicans had all they could do to get a word in edgewise — even though their words had no chance of stopping, or even slowing down, the spending of trillions of dollars.
Now that the bill is coming due for all that spending and borrowing, Republicans are suddenly being invited in to share the blame for either raising the national debt ceiling or for whatever other unpopular measures will be legislated.
Many years ago, someone said, “If you didn’t invite me to the big take-off, don’t invite me to the crash landing.” This was Obama’s big spending spree, but “bipartisanship” requires Republicans to either split the bill or be blamed if the government shuts down or defaults. …
Robert Samuelson on the “crisis of the old order.”
We are witnessing “the crisis of the old order.” The phrase, coined by the late historian Arthur Schlesinger Jr. to describe the failure of unfettered capitalism in the late 1920s, also applies to the present, despite different circumstances. Everywhere, advanced nations face similar problems: overcommitted welfare states, aging populations, flagging economic expansion. These conditions define the global crisis and explain why it struck the United States, Europe and Japan simultaneously. We need to move beyond daily partisan fireworks to see this larger predicament.
The old order, constructed by most democracies after World War II, rested on three pillars. One was the welfare state. Government would protect the unemployed, aged, disabled and poor. Capitalism would be tamed. A second was faith in economic growth; this would raise everyone’s living standards while permitting income redistribution. Growth was ordained, because economists had learned enough from the 1930s to cure periodic recessions. Finally, global trade and finance served countries’ mutual interests.
All three pillars are now wobbling. To be sure, the financial crisis worsened matters, and each country’s situation is different. America’s welfare state is less generous than Germany’s. Greece’s crisis began because it had vastly underreported its budget deficit; Ireland’s stemmed from a burst housing bubble that led to a costly bank bailout. But these differences obscure large similarities. …
Jennifer Rubin reviews Monday’s speeches.
President Obama’s decision to give a speech Monday was proof that things have not gone well for him. He threw (another) tantrum in the Friday news conference, he turned down a bipartisan deal presented to him Sunday and thereby took himself out of the limelight. Tonight’s speech was not intended to “solve” the impasse but to make sure Obama would get credit if a deal is struck and avoid blame if it is not.
The speech itself was part panic attack, part platitudes and a whole lot of class warfare (corporate jets! hedge fund managers!). …
… Then it was House Speaker John Boehner’s turn. He touted his small-business background and made clear that ordinary people don’t get to simply borrow more and more. He reminded us that Obama wanted a clean debt bill, but the House insisted on a new way of doing business. Then he recapped the president’s intransigence:
“What we told the president in January was this: the American people will not accept an increase in the debt limit without significant spending cuts and reforms.
And over the last six months, we’ve done our best to convince the president to partner with us to do something dramatic to change the fiscal trajectory of our country. . .something that will boost confidence in our economy, renew a measure of faith in our government, and help small businesses get back on track.” …
More from Jonathan Tobin.
President Obama’s speech tonight on the debt ceiling debate was not an attempt to bridge the gap between his position and that of his congressional opponents. By repeating the rhetoric he has been using all through this debate by attempting to demonize Republicans, it was clear his goal was not to make a deal but to exacerbate a situation he has already described as a crisis. …
… In response, House Speaker John Boehner’s short speech simply indicated the Republicans understand Obama is either bluffing or actually wants a default because he believes it is in his political interest. …
And Ed Morrissey weighs in.
For the fifth time in three weeks, Barack Obama seized the bully pulpit in the debt-ceiling debate, this time using a prime-time speech instead of a press conference to do so. And for the fifth time in three weeks, Obama literally did nothing with it except to utter the same platitudes and clichés as he did on the previous four occasions. Obama offered no solutions, no specifics for a solution, and spent 15 minutes avoiding both.
And at least one media outlet noticed:
“President Barack Obama elbowed his way back into the debt ceiling debate Monday night, three days after Republicans shoved him out, but he offered no hint of a solution to the escalating political and financial crisis.”
Politico also got the impression that Obama was delivering a campaign speech rather than a solution to a crisis that Obama himself has hyped considerably: …
Furthermore, a NY Times blog calls BS on the administration’s Chicken Little strategy.
… The administration may have made a strategic mistake in warning too soon that the market would react negatively. It ultimately undercuts the government’s negotiating position because the doomsday scenario has not played out, even though the deadline is fast approaching.
“They have lost all credibility,” said Neil M. Barofsky, the former special inspector general for the Troubled Asset Relief Program. “It’s so typical of the way Treasury and the Fed treat everything — it is always to warn that Armageddon is coming.”
The Treasury secretary, Timothy F. Geithner, is among those who may have miscalculated.
He has consistently held out Aug. 2 as the cutoff date for lawmakers to reach a compromise. After that, Mr. Geithner has said the government might not be able to continue sending out Social Security checks or Medicare payments. “On Aug. 2, we’re left running on fumes,” he told the CBS program “Face the Nation.”
He told me back in May that he was expecting to reach a deal by mid-July, way ahead of the final deadline. “Why would you want to experiment? In July, you’d want this done.”
But increasingly, the market seems to believe it was a false deadline. …
Mona Charen columns on some Dem BS about the Clinton economy.
As the fight continues over whether to raise taxes to ratify the additional $3.6 trillion President Obama and the Democrats have spent in just 27 months, you hear the same refrain from Democrats — we must raise taxes to the levels of the Clinton administration. This is always followed by flights of exaggeration portraying the Clinton-era economic record as “The Greatest Peacetime Expansion in American History,” or in world history, or in galactic history.
They seem to think it was the tax hikes that produced the prosperity.
The economy did expand during the Clinton presidency — though not quite as much as it had during the Reagan years. Reagan’s presidency required a steep recession to undo the mistakes of his predecessors. Despite that, his overall record was astounding. Real GDP increased 32 percent under Reagan (it was 31 percent under Clinton). Disposable income grew 22.7 percent under Reagan versus 20.4 percent under Clinton. Obviously, both look luxurious from this remove.
Reagan overcame serious economic woes, including raging inflation and interest rates. Clinton was more fortunate in his timing. …
Andrew Malcolm has late-night jokes.
Conan: The American space shuttle program is over after 30 years. NASA will now have to pay Russia $63 million to fly every U.S. astronaut into space. Another $15 million if he checks a bag.
Leno: Your federal government at work: The FAA has ordered the owner-pilot of his own one-helicopter company to give himself a surprise random drug test.
Leno: Daniel Craig is here tonight to talk about Cowboys & Aliens. No, not California farming. It’s his new movie called ‘Cowboys & Aliens.’
Fallon: Philadelphia has a new plan to ticket pedestrians texting without looking as they walk. As opposed to the previous punishment -– lampposts.