The Debt Ceiling: An Elaborate Charade

[TBF]

Al Jazeera has put into words what I have been thinking this past week. Is this "debt ceiling crisis" really an elaborate ruse to cut popular and essential social programs?

The nonsense battle over the debt ceiling

Politicians, including President Obama, are using the debt ceiling battle as an excuse to axe social welfare programs.
Dean Baker Last Modified: 27 Jul 2011 13:08

The United States is currently running extraordinarily large budget deficits. The size of the annual deficit peaked at 10 per cent of GDP in 2009, but it is still running at close to nine per cent of GDP in 2011. The reason for the large deficits is almost entirely the result of the downturn caused by the collapse of the housing bubble. This can be easily seen by looking at the projections for these years from the beginning of 2008, before government agencies recognised the housing bubble and understood the impact that its collapse would have on the economy.

<snip>

Remarkably, both Republicans in Congress and President Obama have sought to conceal this simple reality. The Republicans like to tell a story of out-of-control government spending. This is supposed to be a long-standing problem (in spite of the fact that Republicans have mostly controlled the government for the last two decades) that requires a major overhaul of the budget and the budgetary process. They are now pushing, as they have in the past, for a constitutional amendment requiring a balanced budget.

It might be expected that President Obama would be anxious to correct the misconception about the budget, but this would not fit his agenda either ...


Read much more here: http://english.aljazeera.net/indepth/opinion/2011/07/20117277177305221.html

[woo me with science]

1. Yes, this was shock doctrine.

A ginned-up crisis for the purpose of pushing through the peas we are about to be force-fed.

[mike_c]

2. it's utterly manufactured and both parties and both branches of government...

...are busily blowing smoke up all our asses trying to one-up one another with bullshit. And the media flogs the sheep into a panic over it. All for the protection of the rich and the destruction of the middle class whose remaining wealth is just about all that stands between the wealthy and "having the whole pie to themselves."

[newfie11]

3. a charade, yes but the effects maybe devastating

especially for those unemployed or on SS,medicare,Medicaid.

[TBF]

4. The very sad part is that the effects are going to be devastating either way -

either they reach their "deal" which will assuredly mean cuts,
or they go into default which means debt downgrading, making everything more expensive, meaning cuts will come with that as an excuse.

They are bound and determined to do this one way or another.

[originalpckelly]

7. Yes, it's sort of like the government is out on the ledge telling everyone...

the boogie man is trying to get it, so it's going to have to jump off.

There is no boogie man, but the pavement is very real.

[Name removed]

5. Deleted message

Message removed by moderator. Click here to review the message board rules.

[indurancevile]

6. so obama lied about the cbo numbers? if so, that is telling.

In order to advance their agenda, President Obama also has an interest in promoting the idea of the deficit as being a chronic problem. Plus, it gives him an opportunity to blame the deficit on the fiscal choices of his predecessor, President Bush. Therefore, in his address to the country on Monday (July 25), he told the public that as a result of President Bush's tax cuts, his wars, and his Medicare prescription drug benefit, the deficit was on track to be more than $1tn in 2009.

This is more than five times as large as the actual figure projected by CBO. However, President Obama's distortion preserved the idea of the deficit as a chronic problem, while also getting in an attack on the Republicans.

[TBF]

10. Right, and never mind the fact that Social Security (which he

carefully didn't mention, but he did mention Medicare), did not contribute one penny to either deficit - real or exaggerated.

[WinkyDink]

8. DUH!!

[jtown1123]

9. Of course it is...I've been predicting this since January. Wasn't hard to see.

[ProgressiveEconomist]

11. Wait a minute! Remember the $5 trillion in Clinton SURPLUSES Dubya dquandered?

Without those surpluses, Dubya would have been running big deficits long before his final year in office. What's the difference between big increases in deficits and big delines in surpluses? Algebraically, none.

I think the truth is more complicated than Dean Baker and al-Jazeera are arguing.

Dubya ballooned the long-term future STRUCTURAL deficit, and reversing that profiligacy entails such measures as not renewing his extra 2001 and 2003 tax breaks for the very wealthy, letting Medicare negotiate prices for prescription drugs, etc.

There's a fairly big discussion of the economic issues in this thread in an earlier GD thread, at http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1579478

[TBF]

12. Thank you for that link but I have a hard time believing Al Jazeera and Dean Baker

in particular are delivering a "a racially-motivated attack on the President's intelligence".

I'd expect the teabaggerati to do that, but not Dean Baker. The reality is that this president is VERY intelligent and for some reason is willingly offering up these crucial social programs to be cut. I don't think for one minute he is doing this out of gullibility.

[killbotfactory]

13. Yes, republicans tied raising the debt ceiling to cutting social programs

And they are willing to let us default and screw over everyone if they don't get their way.