YR NEW FAVORITE RECESSION (AGAIN)
Aug. 8th, 2011 09:57 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
defrogI promised I wouldn't post anything else about the Debt Ceiling until the economy collapsed.
So. One half-assed debt bill and a credit rating downgrade later, here we are.
Granted, a bad day at the stock markets doesn’t mean a complete collapse. Indeed, if you ask some people, we still haven't recovered from the 2008 recession, so technically this is another symptom of the same problem.
Some people will even tell you that there’s no reason to take S&P seriously, seeing as how they’re hardly in a position to lecture the US govt on responsible money management and risk-free investments. On the other hand, it seems that stock markets are taking them seriously anyway.
Whatever. As I’ve said, I know dick about economics, so I couldn’t tell you how bad it’s going to get. Luckily, both the Debt Bill and the Standard & Poors downgrade were a lot more about politics than they were about economics. And I can sure blog about the politics.
Inevitably Demos, Repubs and Tea Partiers alike are already addressing the problem by basically pointing fingers and shouting “NOW look what you’ve done!” Which is why I think that S&P technically has a point, and one that probably would never have gotten across without an actual consequence attached to it: one reason we’re in the mess we’re in is because Congress made it all too clear that they’re more interested in scoring political points than they are in actually fixing the debt problem.
And while it might be fair to argue that the Demos helped spend us into this mess, it’s more than fair to point out that the Republicans helped them do it. A lot. Sorry, Republicans, but whatever you think of Obama’s stimulus plan and Obamacare, he didn’t get the deficit to $14.3 trillion all by himself. He had a blistering head start. And it wasn’t just courtesy of Bill Clinton.
Also, the fact of the matter is that, like it or not, we’re at a point now where spending cuts alone aren’t going to be enough to deal with the big debt pile we have now, no matter how much voodoo you throw on it. It’s not 1981 anymore and hasn’t been for 30 years. Even The Economist has said, “Dudes, yr really gonna need a tax hike.”
That, of course, didn’t happen. And we all know whose idea that was. Maybe Obama could have held the line on that one, but it’s worth remembering he was dealing with a party whose most influential wing (the Batshit wing, sadly) was saying, “Go ahead and default for all we care. Nothing bad will happen. And if it does, we’ll just blame it on you anyway.”
Well, guess what?
So yeah, I think S&P have a good point. The real problem with the US debt isn’t really the debt – well, okay, it is to a point, but the US has almost always had debt, and has almost always run in the red. The problem is that people are losing faith in the US govt’s ability to manage it, and the debate over the debt ceiling illustrated all too clearly that the current US Congress is letting political divisions get in the way of its ability to manage its finances. The leaders of both parties know what needs to be done, but no one is willing to do it because the higher priority is ensuring the Other Party loses badly in the next election.
Granted, S&P picked a hell of a time to make its point. But the same could be said for GOP and Tea Party creatures who decided to use the debt ceiling as a political blackmail tool when the economy was still in recovery mode.
Anyway, the irony is that S&P’s concerns over politics will fall on deaf ears, what with both parties spending the rest of the election year blaming each other for whatever happens next. Obama has said we need to work together and put politics aside, but he always says that, and no one has listened to him yet. So in that sense, S&P might as well not have bothered and saved us all the extra grief.
Back to the drawing board,
This is dF
So. One half-assed debt bill and a credit rating downgrade later, here we are.
Granted, a bad day at the stock markets doesn’t mean a complete collapse. Indeed, if you ask some people, we still haven't recovered from the 2008 recession, so technically this is another symptom of the same problem.
Some people will even tell you that there’s no reason to take S&P seriously, seeing as how they’re hardly in a position to lecture the US govt on responsible money management and risk-free investments. On the other hand, it seems that stock markets are taking them seriously anyway.
Whatever. As I’ve said, I know dick about economics, so I couldn’t tell you how bad it’s going to get. Luckily, both the Debt Bill and the Standard & Poors downgrade were a lot more about politics than they were about economics. And I can sure blog about the politics.
Inevitably Demos, Repubs and Tea Partiers alike are already addressing the problem by basically pointing fingers and shouting “NOW look what you’ve done!” Which is why I think that S&P technically has a point, and one that probably would never have gotten across without an actual consequence attached to it: one reason we’re in the mess we’re in is because Congress made it all too clear that they’re more interested in scoring political points than they are in actually fixing the debt problem.
And while it might be fair to argue that the Demos helped spend us into this mess, it’s more than fair to point out that the Republicans helped them do it. A lot. Sorry, Republicans, but whatever you think of Obama’s stimulus plan and Obamacare, he didn’t get the deficit to $14.3 trillion all by himself. He had a blistering head start. And it wasn’t just courtesy of Bill Clinton.
Also, the fact of the matter is that, like it or not, we’re at a point now where spending cuts alone aren’t going to be enough to deal with the big debt pile we have now, no matter how much voodoo you throw on it. It’s not 1981 anymore and hasn’t been for 30 years. Even The Economist has said, “Dudes, yr really gonna need a tax hike.”
That, of course, didn’t happen. And we all know whose idea that was. Maybe Obama could have held the line on that one, but it’s worth remembering he was dealing with a party whose most influential wing (the Batshit wing, sadly) was saying, “Go ahead and default for all we care. Nothing bad will happen. And if it does, we’ll just blame it on you anyway.”
Well, guess what?
So yeah, I think S&P have a good point. The real problem with the US debt isn’t really the debt – well, okay, it is to a point, but the US has almost always had debt, and has almost always run in the red. The problem is that people are losing faith in the US govt’s ability to manage it, and the debate over the debt ceiling illustrated all too clearly that the current US Congress is letting political divisions get in the way of its ability to manage its finances. The leaders of both parties know what needs to be done, but no one is willing to do it because the higher priority is ensuring the Other Party loses badly in the next election.
Granted, S&P picked a hell of a time to make its point. But the same could be said for GOP and Tea Party creatures who decided to use the debt ceiling as a political blackmail tool when the economy was still in recovery mode.
Anyway, the irony is that S&P’s concerns over politics will fall on deaf ears, what with both parties spending the rest of the election year blaming each other for whatever happens next. Obama has said we need to work together and put politics aside, but he always says that, and no one has listened to him yet. So in that sense, S&P might as well not have bothered and saved us all the extra grief.
Back to the drawing board,
This is dF
