We gave in to the Congressional Republicans on the debt ceiling debate on almost every issue. We agreed not to raise taxes on the wealthy. We agreed not to tighten loopholes that allowed them to hide their assets elsewhere. We said that, instead, we would slash government spending. We were told that there wasn’t a choice. We were told that, if we didn’t give in to their demands, that the world’s credit rating agencies would strip us of our perfect AAA rating, causing each of us to pay more for everything from student loans to mortgages. Well, guess what? We agreed to the shitty deal, and we got downgraded anyway. So, not only did we agree to balance the American budget on the backs of the non-wealthy, but we’ll all be paying more for the money we’ll need to borrow in order to keep our eating. It’s the perfect punchline, isn’t it?
And here’s the best part is… Standard & Poor’s, in their report, which was just issued this evening, came right out and said that, one way to keep from sliding even further into the economic abyss would be to let the Bush tax cuts expire, which everyone capable of rational thought has known since this whole thing started. Here’s a clip:
…The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’…
Of course, they also mention that, given Republican unwillingness to budge on the matter, they think that’s unlikely. Here’s another clip from the report.
…Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act….
And, because I don’t think it can possibly be said enough, I’d like to remind people that, according to projections by the Congressional Budget Office, our national debt would have been retired by 2009, had we stayed on the course set by Bill Clinton. But, as you know, the Republicans, led by Dick “deficits don’t matter” Cheney, had a different vision for our country. Speaking of which, the following clip comes from a piece by Gene Lyons at Salon.com.
…By any rational accounting, Bush and the GOP Congress that gave him everything he wanted from 2001 to 2007 should be held responsible for the entire $10.6 trillion national debt — along with the $1.3 trillion yearly deficit they handed to Obama, as well as the Wall Street crisis and bank bailouts.
It’s that simple: With no Bush income tax cuts, no unfunded Medicare drug benefit, and no off-budget Iraq and Afghanistan wars, the U.S. balance sheet would have been in fine shape for his successor. Then government investment needed to rescue the economy from the doldrums wouldn’t have seemed so alarming.
See, that’s how Keynesian macroeconomics is supposed to work. Pay down the debt in good times, spend on job creation and tax cuts when people are hurting and the private economy’s sucking wind. This mysterious “confidence” everybody talks about? What it amounts to is money in people’s pockets. Economically speaking, there’s no other kind.
Instead, heeding Dick Cheney’s observation that “Reagan proved deficits don’t matter,” the Bush administration topped-up Scrooge McDuck’s bullion pool. Now Scrooge funds think tanks paying store-bought “scholars” to argue that the massive debt they created is all the Democrats’ fault for seducing grandma with socialist schemes like Medicare and Social Security…
But, instead of investing in infrastructure and putting the men and women of America to work, we decided that now would be a good time to do the exact opposite, and slash spending, forcing more people into poverty. To do otherwise, it seems, would have been feeding into the Republican narrative that Obama is a “big government” liberal. And we couldn’t have that, even if it was what the situation called for, could we?
And, here, with more on those prevalent American misconceptions, is a clip from a recent column by Paul Begala at The Daily Beast.
…(I)t is striking how absent that history has been from the coverage of our current crisis. I can understand why the GOP doesn’t want to remind folks of how they screwed the pooch. Indeed, they have a competing myth—that Washington went on a spending binge; radical young President Barack Obama went crazy with the national credit card. That, of course, is nonsense. But too few Democrats—and almost no media commentators—have countered the mendacious right-wing storyline…
Fuck everything about this. Fuck the media. Fuck Washington… This did not have to play out this way. We could have allowed the irresponsible Bush tax cuts to expire, invested in America’s clean energy future, fixed our crumbling infrastructure, and created jobs. Instead we gave in to the bullying of the “starve the beast” Republicans and their corporate masters, allowing them to purposefully bankrupt our nation and roll back the New Deal. I may have joked in the past that another American revolution is on the horizon, but I didn’t really believe it until this very moment. As of right now, I think it’s unavoidable. We’re on a collision course for a major, bloody societal reboot.