Sunday, July 31, 2011

Sunday Question for Conservatives

What's the main lesson that you've learned (so far) from the debt limit/deficit talks?
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Posted by Jonathan Bernstein at 12:40 PM
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9 comments:

  1. CSHJuly 31, 2011 at 5:16 PM

    For me, a key lesson is that for the Tea Party, in spite of its hilarious inconsistency, its thinly-veiled xenophobia, the great redeeming feature of that movement is an understandable distrust of Washington, leading to them pushing on Congress/the President not to quit.

    For perspective, the other day I ranted against Dubya for defending the "think of the children" bit after the second plane hit the WTC. In fairness (I suppose), Bush's likely motivation for that extended blank stare is also the great scourge of modern Washington: he quit.

    When Andy Card famously whispered to Dubya that "America is under attack" in that school that morning, Dubya probably thought about that PDB Tenet personally delivered to Crawford a month earlier, the famous "Bin Laden determined to strike in the US" one. Much like the speculation from the cable newsie you were watching while Bush was listening to the children, Bush probably realized that there were more planes, perhaps even a dozen more, and that F-15s would be ordered to shoot them down. Perhaps he also considered (as your cable newsie likely did) that some passengers might fight back, in light of which the F-15s would want clarification from the top regarding rules of engagement, which is an awful thing to have to do. Much better to stare vacantly and hope for the best, which, from the standpoint of Bush's responsibility, worked out for him, since, one more plane hit a target (but within a plausible 30 minutes) with the last one heroically fought back against.

    That's a terrible job, being the guy to clarify rules of engagement while 9/11 is fluid, but its the one Bush signed up for, and in this hyperpartisan age, its way too easy to shirk one's responsibility "for the sake of the children". Way too easy in that your defenders will defend you to the hilt...for the sake of the children...while your opponents will smell blood and miss the underlying point, that is, being President is a pretty good gig when you're not forced to make tough decisions, while it sucks quite a bit for the rest of us to have these guys shirk tough decisions, which is the likeliest explanation for Bush's vacant expression that morning.

    There was an article from a non-partisan source on MSNBC the other day saying that the negative NPV of underfunded government liabilities is
    -$216 trillion. We aren't close to budgetary solvency. A tweak here, a tweak there, and we're still gonna be way way short.

    Whatever the particular flaws of the "Super Congress" and the trigger system, at least there will arguably be some teeth to future attempts at budgetary sanity. Thank goodness for that.

    Its way too tempting for those Washington types to quit.

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  2. MercerJuly 31, 2011 at 5:53 PM

    GOP House members less deferential to big business and Wall Street then I would have predicted.

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  3. CSHJuly 31, 2011 at 6:57 PM

    One more thought on "quitting": back in January, when Boehner assumed the position, this blog, and many others, assumed that he would pay lip service to the concept of deep cuts, while not doing anything of substance, thus mollifying his strong Tea Party and Elderly constituencies. In the context of my excessive missive above, it was forecasted that Boehner would "quit".

    Now, with all due respect to my liberal friends on this blog, perceiving that balanced budgets such as Clinton's arise from liberal DNA (and not the one-time turbo charging impact of tech taxes and the peace dividend), its pretty hard to see where the left is your best bet to deal with the $216 T present-value gap between future revenues and future expenses. That $216 T is mostly comprised of the two most sacred of liberal cows: 1) don't compromise the Great Society and 2) don't get caught looking weak on defense.

    So if we can't much trust the Republicans not to quit, and we can't much trust the Democrats not to quit, what hope do we have?

    One of the fascinating aspects of the last few days is: assuming the china that's been broken by the Tea Party doesn't permanently damage Congress, historians may just look back at this time, and the Tea Party's contribution, as positively heroic.

    Perhaps...perhaps?...the culture of Washington has begun to change to politicians' feet being held to the fire by the collective effort of citizens? As much as everyone viscerally hates the Tea Party today, wouldn't it be something if their contribution is revered down the road - you know, when internal controls are back in DC (and no one knows any real life Tea Partiers any more!)

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  4. CouvesAugust 1, 2011 at 12:18 AM

    That neither side wants to make the tough decisions necessary to reduce spending.

    CSH, you make some good points. Where do you get the $216 trillion number from?

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  5. CSHAugust 1, 2011 at 7:27 AM

    Couves, here's what I was reading. Turns out my memory was wrong about the $216 T, its actually a much more comforting $211 T!

    Financial forecasts with infinite horizons tend to be a little bit iffy, but this may not be a bad guess given the endorsement from Doug Holtz-Eakin, AKA one of the few modern Republican economists to blow up Laffer Curve hysteria, lose his job, and live to tell.

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  6. CouvesAugust 1, 2011 at 5:05 PM

    CSH, thanks for the link. You're right, these forecasts can really vary quite a bit. It's also worth considering that our debt-to-GDP ratio is already worse than Portugal's when you take into account state liabilities (bonds and pensions).

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  7. CSHAugust 1, 2011 at 7:15 PM

    That state liability issue is certainly interesting. I'm agnostic; on the one hand the fact that the states collect their own revenue and do much of their own spending makes them seem separate. On the other, the fact that DC backstops the states and contributes to things like highways etc., makes the states seem like one fiscal entity with the feds. Its an interesting topic, and one that folks, at a minimum, should probably discuss more in the context of the broader, messy conversation about US debt.

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  8. CouvesAugust 1, 2011 at 10:11 PM

    I think the Federal government would certainly bail out the states, much as the EU has done with Greece (although there are important differences). Even in the unlikely event that states are allowed to go under, there will still be significant costs to society (imagine: public employees getting stiffed on their pensions).

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  9. MPAugust 4, 2011 at 6:56 AM

    Can I have two?

    1) The President should avoid poker metaphors. (If there's any justice, "Don't call my bluff" will go down in history as one of the stupider things ever said.)

    2) "Don't take a hostage you aren't prepared to shoot" is great advice. Unfortunately, some people might, on reflection, decide they really are prepared to shoot the hostage.

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