Ian Shepherdson of High Frequency Economics essentially saying you can blame the Tea Party if market collapses:

“The Speaker is in office, but not in power, because the Tea Partiers do not respect party discipline. They argue that they are standing up for principle, but the principle they have chosen to defend is the idea that the only thing that matters is rapidly and substantially shrinking the government. This, we respectfully submit, is nuts. According to polls, it’s not even what most Republican voters want, never mind the country as a whole. Moreover, the first thing you learn from studying the aftermath of financial crises is that premature fiscal tightening is extremely dangerous.”


Discuss . . .

Category: Bailouts, Credit, Philosophy, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

128 Responses to “QOTD: Tea Party Political Failings”

  1. Duh!! Anyone with a functioning brain knows what Mr. Shepherdson said. Except that means our political elites are only slightly less stupid than the Teahadists.

  2. JasRas says:

    Agreed. Remember, just because you are feeling better it is important to finish all the antibiotics prescribed or what you had can come back in even worse form and more resistant…

  3. YouthInAsia says:

    Respect party discipline? How about we just start calling them a third party…hope the more progressive Democrats break off and eventually this stupid two party stranglehold will be broken.

    And with the exception of the debt ceiling, gridlock in Washington isn’t a terrible thing and compromise will be the de facto standard, not the exception.

  4. MayorQuimby says:

    I don’t support rapidy doing anything but the one thing the “other side” isn’t getting is that by piling on more debt WE ARE MAKING THE EVENTUAL OUTCOME FAR WORSE.

    I would shave ten pct off Medicaid and social, raise taxes on the top tiers of earners four percent and cut federal wages a few percentage points as well. End the war in Afghanistana and cut the pentagons budget significantly. None of these cuts would be catastrophic and despite lots of whining and moaning, we would be fine. Revisit things in a couple of years and move forward with more cuts if need be.

    The idea that we have a choice here is just laughable.

  5. doodie says:

    It is not only the Tea Party. Boehner has succumbed to the language of war, describing himself and Eric Cantor as being in a “foxhole.” In a war, a non-willingness to bend is a positive attribute in a leader. In a non-military confrontation, as we have now, it is a flaw.

    Boehner and the entire right wing cannot distinguish between a military war and a disagreement that must be settled with a compromise. He says that he is the Speaker for all of us, yet he speaks as if he is at war with at least half the country.

  6. Sunny129 says:

    We learned NOTHING from 2008 crisis!

    Guess the KARMA is back as Tea Party!

    This Country is badly in need of an ENEMA and should get it ASAP!

  7. jmenoy says:

    Bring it on. Let the bear market finish the job it started in 2008/9, liquidate the bad debts and decades of malinvestment, and kill off the tbtf banks, so we can have a real capital based recovery. No more crony capitalism b.s. No more bailouts. Let those who made the mistakes pay for them rather than those who were prudent. No more lost decades from repeating japan’s mistakes.

  8. streeteye says:

    Going through the Iraq stages of … they’re just posturing… wow, some of them might actually be crazy enough to believe their own BS… to wow, I can’t believe they’re actually going to do it .

    I think Nate Silver said that based on polls, Obama, with $4 of cuts for $1 of taxes, is somewhere to the right of your average Republican voter.

  9. brianinla says:

    The world will function just fine if the market drops 30%. The top 1% will scream like babies and use the media to try to get more free money. Maybe Shepherdson can get a real job and produce something useful.

  10. Ruschem says:

    Quite interesting. Read this in the Atlantic magazine.

    http://www.theatlantic.com/business/archive/2011/07/boehner-vs-reid-the-debt-ceiling-plans-at-a-glance/242626/.

    Their analysis shows that Democrats not Republicans are willing to cut more and faster despite all the blame the Tea Party gets. How Mr. Shepherdson would explain that? Too much politics to little sense. As is, this quote is unsupported by any data. While Tea Party makes noise and Republican establishment is giving hard time to Democrats and the President, it is the Democrats and the President, who collectively have more power and control at the moment, are selling everyone down the river in a hope to be reelected.

  11. BoulderPatentGuy says:

    Hopefully, the Teapublicans call O-bombs bluff and the House fails to pass anything, so he used the 14th Amendment to raise the debt ceiling. That will ensure his victory in 2012. No way he’s sucessfully impeached by the Senate, and I would venture that even a majority of the country wouldn’t dare to give the crazies all the keys.

  12. Freestate says:

    The price of democracy: you have to put up with extreme factions that are bat shit crazy (BSC). What a good democracy needs is very few legislative situations that allow a BSC faction to hijack the political process. Unfortunately, the debt ceiling mechanism we have plays right into the hands of an extremist, dogmatic faction that is willing to put its beliefs ahead of the welfare of the entire country. we’ll never eliminate the BCS factions – we really need to eliminate their opportunities to hijack the country.

  13. WaltFrench says:

    Dimly, I remember Civics instruction that the Founders chose Representative Government as the way to prevent the country from degenerating into mob rule, a fickle populace beheading whomever was in charge the last time some problem arose.

    Maybe I wasn’t paying attention closely enough, as the Reign of Terror didn’t really kick in until 20 years after our independence. Still, they may have had some inkling.

    Party discipline barely carried the day for GW Bush getting TARP enacted; it obviously had a high price in the 08 elections. But does US history have similar breakdowns where a minority movement was able to blow up the government?

  14. theexpertisin says:

    Funny how the conservative wing of the Republican Paarty is castigated by some regressive-progressives. When is the spending orgy going to stop? I admire this group by standing true to their principles – a trait that was admired during 0ur country’s Goolden Years.

    I blame LBJ. He schooled the masses that mere skin color or making poor choices in life would be rewarded with largesse. And, he could run a war at the same time! Johnson should go down as our worst President in history. He set a horrible precedent.

  15. JimRino says:

    Let’s not forget the Funding.
    That’s the Koch Brothers, the John Birch Society Koch Brothers.
    So, when you hear the insanity of the tea party, and the scripted ramblings of Glenn Beck, you’re hearing the thinking of an Insane Autocrat. It’s like there wasn’t a revolution, we’re back again being ruled by the Crazy King George, in the reincarnation of the Koch’s.

    This is what happens, and it can only get worse, when the top 1% own 40% of national assets.
    The Koch’s, worth 44 Billion Dollars, can easily afford to spend 100 million dollars on US Politics.
    That’s the ability to buy politicians for what it would cost the average American, a 100 dollar bill.
    The Koch’s non-secret close relationship with members of the Supreme Court means they have power and control over the FINAL Determination of Legislation: Citizens United in the Destruction of America. Think about that. You now have a King in power, with No Checks and Balances.

    As too the size of government.
    There should be a simple graph somewhere of fiscal expenditure and population.
    But, secondly, I would guess in a world where BPA is cutting sperm counts in males, that Environmental and Health budgets should be Quadrupled. So, either the tea party gets educated, or we get eradicated.

  16. JimRino says:

    But, why does the “news” media continue to perpetuate the belief that there even is a “Tea Party”.
    The last protest, 50 people showed up.

    Why, because they found out that “Wasteful Government Spending”, and “Too Big Government” turned out to be THEIR Social Security and Medicaid Checks, not the black guys checks or he urban dweller checks, THEIR checks. Republicans destroying their own base.

  17. JasRas says:

    Are none of you students of history? Or economics? Might try reading a book or two on the past rather than blindly following the political rhetoric. Choking the recovery by pulling back government support guarantees a relapse or worse.

    I think if you compare how our country approached the 2008 crisis and the way Euroland did, one would choose our method as it was very successful while Euroland has had to address various debt crisis issues every six months for the past couple years.

    The Republicans *chose* to make the debt ceiling an issue. Raising the ceiling often happens with no fanfare. The credit markets were showing no stress about our debt, in fact flocked to it as Greece became a problem again this year… The opportunity to have addressed budgetary issues would have been while working on the budget—earlier this year—not *after* you’ve voted to spend the money. If this tactical gamble to gather sound bites for the 2012 campaign creates a credit crisis, the Republican’s, not Obama will have gone down as the fools who put the abash on the economy, the markets, and heightened social acrimony close to boiling points. To imply Obama has control of this issue and can have impact is false. Dem’s have Senate, Republican’s have House, and Obama is in the Executive Branch…which can only suggest and plea with his Dem’s in the legislative branch (who are much more senior than he in D.C. experience, so not much pull…)

    Great tactical moves…

  18. Transor Z says:

    Why reinvent the wheel? Here’s Daniel Dennett’s TED presentation from February 2002, “Dangerous Memes”:

    http://www.ted.com/talks/lang/eng/dan_dennett_on_dangerous_memes.html

  19. philipat says:

    OK, so WHEN should we start to cut. DC has always been very good at putting off spending cuts and constantly finding new excuses to delay further.

  20. Raleighwood says:

    Won’t it be ironic when the bulk of the TeaPartiers lose their “redistributed wealth” checks in the debt ceiling government shutdown.

  21. algernon says:

    It is a curious world when you are called a “nut” for asserting that, having borrowed $14.5 trillion & having unfunded liabilities several mutltiple of that, we shouldn’t borrow more but should immediately reduce spending.

  22. VennData says:

    Well, at least the Tea Partiers stand by their principles:

    “…Bachmann benefited from loan programs she decried: Took out a $417,000 mortgage weeks before blasting Fannie, Freddie…”

    http://www.washingtonpost.com/politics/bachmann-benefitted-from-federal-home-loan-program/2011/07/19/gIQAI12raI_print.html

  23. VennData says:

    algernon,

    Typical straw man argument.

    The nuttiness is not raising taxes back to the Clinton-boom-era rates, a few percentage points. That’s what’s nuts. Every plan out there has trillions of cuts.

  24. tawm says:

    Algernon is the only one here who addresses IDEAS instead of name-calling. BP has descended into pathetic partisan noise.

  25. overanout says:

    The Tea Party does not exist as a separate entity outside of the Republican Party it seems curious that somehow the media has created a political party within a political party for what reason is still unclear.

  26. bubba says:

    “Won’t it be ironic when the bulk of the TeaPartiers lose their “redistributed wealth” checks in the debt ceiling government shutdown.”

    Poetic justice would be more apt. Dumb fuking racist idiots these teabaggers.

  27. Bob A says:

    beam me the *#&@ outa here scotty

  28. Hey You says:

    Before the boogy man Tea Party is kicked around another time it would be interesting to know if the US actually spends much more money than is taken in? Is giving the Obama adminstration a blank check to bankrupt the country good public policy? Guess what people debt addiction is a potentially fatal problem. Time for some cold turkey.

  29. whskyjack says:

    “OK, so WHEN should we start to cut”

    Or an equally valid question

    OK, so When do we start to raise the revenue we need to cover the services we have decided we need?

    Jack

  30. whskyjack says:

    So what programs that Obama has added have been fatal types of debt?

  31. lburgler says:

    Where’s Petey Wheatstraw??

    PETEY!!!! Come back!!!

    We love you, even when we hate you!

  32. sainttjames says:

    Every time I drop by this place it seems to veer more and more left. Has the readership been taken over by Union Mob?

  33. 873450 says:

    WaltFrench Says: “But does US history have similar breakdowns where a minority movement was able to blow up the government?”

    Neo-cons misleading USA into invading Iraq under false pretenses didn’t blow up the government, but certainly bankrupted it. For at least the next 30-40 years we will continue paying dearly for that faux (Mission Accomplished) war and the ensuing nation-building chaos that took place in its aftermath.

  34. eliz says:

    It seems like the FIRE sector bailouts were an equal opportunity effort – most Repubs and Dems were happy to bail out the bankster terrorists and dump that pain on taxpayers from all strata and future generations. When it came to fiscal policy – to help Main Street – the Dems clearly had more heart.

    Now that zillions have been spent, the vast majority going into the black holes of the phantom financial sector (pulling from Nomi Prins’ 10/2010 report: $3.514 trillion to Wall St., $2.809 trillion to the GSEs, and a paltry$1.511 to Main St.), the Repubs are getting “religion” at the expense of the average Jack and Jill.

    I’m not saying we shouldn’t get our house in order. I’m all for it. But how about if we start by clawing back as much as we can from those that have benefited from the bailouts and Bernokio’s failed (from the perspective of Main St.) monetary policies. Also, let’s end the frickin’ idiotic wars. And let’s impose a 10% compensation cut across the board for all Federal employees, retirees and contractors – including elected officials. There many paths that could be taken – if there was the will. But most in Congress are only out for themselves and keeping the monied lobbyists happy. They helped the banksters then, and now they are only concerned with keeping the rich happy. In the process they are content (if not smug about it) to tear down the paltry safety nets for Main St.

    Heaven help us all.

  35. bocon007 says:

    At this point, I think it is necessary for the President to invoke the 14the Amendment and raise the debt ceiling through executive order and immediately encourage the senate democrats to fashion a bill that includes both modest cuts and revenue increases.

    It would be irresponsible for a President to allow a routine vote such as the raising of the debt ceiling to jeopardize the economic good the country. Can you imagine this atmosphere of animosity raging every six, twelve, or eighteen months. How could any economic recovery, however poorly conceived or carried out take root in such an atmosphere? If allowed to continue in this way, either party could use the raising of the debt ceiling to cause all kind of legislative mayhem.

    At this point, I believe the President has to challenge the constitutionality of the debt ceiling regardless of any political price. Thanks to the Republicans, the cat is out of the bag.

  36. ZackAttack says:

    I am starting to think history selects for a group to commit US 1937, Japan 1997.

  37. AlexM says:

    Does anyone know when the actual date for the vote will be?

  38. arogersb says:

    “Moreover, the first thing you learn from studying the aftermath of financial crises is that premature fiscal tightening is extremely dangerous”.

    Is it more dangerous than PIGS like debt crisis? Because, that’s where the US is heading right now. Government support promised to save banks, increase credit, restore growth and keep unemployment bellow 9%, it achieved none of that. Bank failures are still higher today that they were in 2008 and 2009 (maybe they were referring to saving Goldman Sachs…). Credit is still depressed, unemployment is over 9% and there is ridiculous recovery. The only argument in favor of government support is “it saved us from armaggedon”, but believing that is just an act of faith. Bailouts and government support failed to meet event the most basic goals set by the same people who promoted this intervention. Why should someone believe them now?

    As for the Koch brothers funding, it is nothing compared with the wealth that investment banks and other bailed out companies received from government, the same who are now huge contributors to the democrat’s campaign.

    Anyway, for those of you who are afraid of this new end of the world prophecy:(1) It may be painful, but better now than later, at least the US still has a manageable rating now, would you rather wait until you get to a PIGS stage? (2) why care about rating agencies anyway, they were wrong all the way, what matters is the yield (3) Japan got downgraded and no big drama (4) Treasuries will not default, maybe some agencies will (Fannie?), but those are not treasuries (the rated stuff).

  39. NewBob88 says:

    There are 435 Congressmen. At least 300+ are not Tea Party members. They have the ability to pass appropriate Debt Ceiling legislation. These are the members who should be getting the media attention because they can get something done.

  40. AlexM says:

    @sainttjames,

    Naw, it’s just that the right wing is so frigging embarrassed at what it has wrought that they don’t even bother to show up anymore.

    How can anyone defend the 30 years of right wing ideology that has brought us to our knees as a country, while the 400 richest billionaires laugh from their yachts and gated estates?

    Can’t defend the indefensible! So now they lurk rather than comment…

  41. wunsacon says:

    No, sainttjames. You don’t have to be a union member to make the remarks most people are making here. Maybe you’re the extremist.

  42. Donald says:

    Just have to ask… Would we even know what a fiscally responsible government would look like? Clearly, these problems are not going to be solved with the people in charge at the moment. If we could just remember that until the next election!
    Not to be too “left”, but didn’t these same guys start 2 unfunded wars just after the Bush Tax cuts?

  43. wunsacon says:

    The Republican/Tea Party is making good on Grover Norquist’s pledge to make the country ungovernable after Democrats win office.

  44. Winston Munn says:

    They bought their tickets. They knew the risks. I say, let ‘em crash.

  45. Thor says:

    I’m encouraged that we’re seeing the term Right Wing Extremists used more and more to describe the Tea Party. It’s about time we call them what they really are. I’ve never understood how we can be fighting right wing religious extremists all over the world, but here, they are actually running the show!

    I read this today and was very disturbed.

    lburgler, what happened to Petey!!

  46. JimRino says:

    Donald, did you just wake up in 2008 or 2010?
    Where were you when Bush started a war in the wrong country?
    Where were you asking for a War Tax: Total Cost of “the wars” 4 Trillion. Interest on the wars 885 Billion.

    Where were you when Bush Deregulated Wall Street: 30/1 leverage, so that these companies were going to fail on Any Financial problem. Or, when the FBI Warned Greenspan of Rampant Fraud in the Housing and Mortgage Market?
    Bush drops Capital Gains tax to 15% so there’s No Way In Hell Middle Class America can EVER catch up to the top 1%. Bush Tax Cuts cut tax revenue for 8 years.

    So, Bush-Republicans Crash Wall Street and the Nation.
    The nation sees a massive lose in Tax Revenue.
    Then we get the necessary Bush TARP Bailout.
    And Massive Unemployment, which causes Unemployment programs to Double.
    Along with the Food Stamp Program: Doubles payouts so that people don’t put More Foreclosed Homes on the market.

    Then Republican Governors push Austerity programs in their own States, causing a National Economic Slowdown, and higher unemployment in their states: But, that’s a Republican Success. Screwing Working Class America: Republican Success.

    Then, some on the right wake up and say: “When’s a good time to cut government spending”?

    When you’re party’s in power, and committing Rampant Fraud, maybe you could have Paid Attention and Bitched While the CRIME was Being Committed.

  47. wunsacon says:

    It seems many “Republicans”:
    - want to lower spending
    but:
    - not increase taxes,
    - not cut military spending or the wars,
    - not cut the GWOD/GWOD, and
    - not cut their entitlements.

    And just a few months ago, some Republican *leaders* started off current budget negotiations by suggesting additional tax *cuts* on top of the Bush-Obama tax cuts for the wealthy already extended last year. Yet, they claim to want to cut the deficit?

    Saintjames or any Republicans, would you take a shot at reconciling these issues for me?

  48. AlexM says:

    wunsacon,

    The Republicans of the olden days were true to their party’s ideology, today’s counterparts led by the Republicans in congress are true to the pledge of Grover Norquist – starve the beast and it will die.

  49. mote says:

    Their newbie staffs (lets play legislator) must have lost it when all those e-mails, faxes and phone calls rolled in.

    Not in my house, tea man.

  50. grego001 says:

    wunsacon:

    I’ll take a crack it. I’m a pseudo-Republican, leaning libertarian these days.

    Not all of “us” (since we seem to be in a group think mode on the site today) want all of what you say.

    For me, the right solution:

    - lower spending.
    - keep taxes where they are.
    - cut wars.
    - cut entitlements.
    - kill the war on drugs.

    So there, a sample size of one has destroyed your rhetoric. Please deliver a Republican or similar that best represents your statements. Straw men do not do.

    As someone further up the thread pointed out, when you are $14T in debt, and the only way you can pay all your bills is by borrowing more money, you might actually consider spending less money.

    Gee, when I say it that way it really sounds nuts.

  51. Michael says:

    Duh…. Obama submitted a wild budget that was rejected 97-0; not one Democrat voted for it. The Democratic Senate has not submitted a budget since 2009 as required by law. The Republicans submitted a real budget this year that was demonized by the President, but who refuses to lay out any real plans to cut spending…. and yet folks here say the Tea Party is the insane one….. YIKES!

  52. wunsacon says:

    The “Tea Party” looks like an example of launching a new “brand” to breath life into an established but tarnished business. After the economic meltdown and the sweeping election loss, neoconservative backers/voters were too embarrassed to call themselves “Republican”. So, they gave themselves and flocked to a new name.

    A few people like Denninger or Ron Paul tried to steer the TP in a different direction, early on. But, they were overrun. By the time the “Tea Party” started inviting the likes of religious, militaristic, borrow-and-spend know-nothings (including the losing VP candidate and spokesmodels from the Murdoch-US propaganda network) to headline their events, it clearly was just another Republican brand.

    Of course, we could dissect the Democratic Party and Obama cynically as well. This situation is quite disappointing…

  53. grego001 says:

    wunsacon:

    Please, “dissect the Democratic Party and Obama cynically as well.” I think the rhetoric could be balanced out, so go for it, if you aren’t afraid of what your fellow posters might have to say.

  54. Joe Friday says:

    Quimby,

    I would shave ten pct off Medicaid and social

    Why ?

    Neither is responsible for our current federal deficits and debt or medium-term future deficits and debt.

    raise taxes on the top tiers of earners four percent

    FOUR percent ?

    Over the past decade, the top 1% of Americans saw their share of the nation’s income DOUBLE, from 11.3% to 22.1%, but their tax burden shrank by about ONE-THIRD.

  55. Joe Friday says:

    philipat,

    OK, so WHEN should we start to cut.

    Other than the two wars and the prescription drug plan for the pharmaceutical corporations and other Corporate Welfare, we shouldn’t.

    Third straight quarter of essentially zero economic growth after Britain enacted spending cuts.

  56. Joe Friday says:

    algernon,

    It is a curious world when you are called a ‘nut’ for asserting that, having borrowed $14.5 trillion & having unfunded liabilities several mutltiple of that, we shouldn’t borrow more but should immediately reduce spending.

    Even curiouser that you don’t know that the vast overwhelming majority of that $14.5 trillion is as a result of tax cuts for the Rich & Corporate AND that you don’t cut spending in a down economy. SEE: Britain.

  57. grego001 says:

    Joe Friday:

    Leave the talking points at home – they are getting tired and worn.

  58. Joe Friday says:

    sainttjames,

    Every time I drop by this place it seems to veer more and more left.

    Ah, once again reality seems to have a well-known Liberal bias.

  59. wunsacon says:

    greg0001,

    >> As someone further up the thread pointed out, when you are $14T in debt, and the only way you can pay all your bills is by borrowing more money, you might actually consider spending less money.

    No, you can print money not backed by debt.

    >> I’ll take a crack it. I’m a pseudo-Republican, leaning libertarian these days.
    >> Not all of “us” (since we seem to be in a group think mode on the site today) want all of what you say.

    Sure. Now, go convince the rest of your party to cut the wars.

    >> Straw men do not do.

    Paul Ryan is a straw man? You’re right! He has no brain.

    >> So there, a sample size of one has destroyed your rhetoric.

    C’mon, greg0001. You call yourself a “pseudo”-Republican because you understandably want to distinguish your views from the herd. I completely understand.

    Libertarians should stop allying themselves with Republicans. You can’t fix “crazy”. So, stop trying.

  60. fineoldcorker says:

    1. Eisenhower’s famous warning about the industrial-military establishment has not been heeded. The industrial-military establishment has enormous hold on members of Congress, and the combination has contributed mightily to America’s spending nightmare. In addition, Congress votes for wars that make no sense, and that would not be supported by the voters – if the voters were informed but unfortunately most are propagandized. When you have 90 minutes to spare, watch “Why We Fight”, which won the 2005 Sundance Film Festival’s Grand Jury prize.

    http://www.forbiddenknowledgetv.com/videos/endless-war/why-we-fight-2005-award-winning-feature-length-documentary.html

    2. Until we have campaign spending legislation that really works, we are going to have lots of pork barrel politicos running Congress. Voter apathy, public cynicism, taxpayer revolt will all result.

    3. In order to return America to a civilised, and budgetarily balanced state, we need a participatory democracy. Bring on the referenda, and voters: put on your thinking caps! Lets take the reins.

  61. Joe Friday says:

    grego001,

    - lower spending.

    Bad prescription. SEE: Britain.

    - keep taxes where they are.

    Why ?

    According to the independent non-partisan Congressional Budget Office, the vast overwhelming majority of our current federal deficits and debt, as well as our medium-term projected future federal deficits and debt, are as a direct result of the numerous rounds of massive tax cuts for the Rich & Corporate enacted by the previous administration and Republican Congressional Majority.

    - cut wars.

    Good luck with dat.

    - cut entitlements.

    Why ?

    They are not the drivers of our federal deficits and debt.

  62. wunsacon says:

    >> Please, “dissect the Democratic Party and Obama cynically as well.” I think the rhetoric could be balanced out, so go for it, if you aren’t afraid of what your fellow posters might have to say.

    greg0001, I’d wager most people here are very disappointed with Obama, who’s continued Dubya’s policies.

  63. icm63 says:

    ..” the first thing you learn from studying the aftermath of financial crises is that premature fiscal tightening is extremely dangerous.” …

    TRUE

    But.. the bankers in charge before the financial crisis SHOULD NOT be in charge after the crisis.

    Crisis require a clean out of the old, for new life to form. For the same reason a forest fire is the birth of true and real growth for the forest…

  64. Donald says:

    icm63 Says:
    But.. the bankers in charge before the financial crisis SHOULD NOT be in charge after the crisis.

    Crisis require a clean out of the old, for new life to form. For the same reason a forest fire is the birth of true and real growth for the forest…

    I agree, but the sad truth is – that’s only going to make room for greedier bankers to lobby more money to suites in DC in order to get away with even greater destruction thanks to Dodd-Frank.

  65. AlexM says:

    We have a revenue problem, not a spending problem. Bring taxes back to where they were in the Clinton era AND put the tax paying middle class back to work and magically the deficits and debt will come down.

    Continue with ruinous tax cuts for the wealthy, 9% of our people unemployed, corporate welfare, unfunded wars complete with incredible war profiteering by corporations, and we will be well on the way to 20 trillion in debt.

    The Republican solution to everything was tax cuts, tax cuts and tax cuts, bad economy, cut taxes, good economy, cut taxes, and free markets where the biggest and best of our American corporations have outsourced American jobs. Think GE, Catepillar, Microsoft, Cisco, Oracle, Merck, Apple, IBM, Intel, etc. Republican ideology is responsible for setting up the collapse of the American economy funded by the richest corporations in the world.

  66. TripleSigma says:

    ….so then short the market….

  67. AlexM says:

    Never confuse the stock market and the economy or state of the nation’s finances.

  68. socaljoe says:

    It seems to me that the biggest threat at the moment is a credit downgrade of US debt… and even the tea party proposals may not be severe enough to prevent this.

    What are the consequences of a US treasury downgrade? Higher interest rates? Higher cost of funding? Higher deficits? Higher mortgage rates? Lower real estate prices? More foreclosures?

    Is this the match that lights the fire in the US bond market theater?

  69. Cdale_dog says:

    Do you guys really think raising taxes during a recession so that we can redistribute even more wealth from those who are working or investing to those who are sitting on their couch watching Judge Judy and Springer is the right approach here? How about we just SPEND LESS! Is that such a novel concept?

    Why is it that we think all govt. spending is good? Is there not enough waste and abuse to shave off $2 – $3 trillion without even missing it?

  70. JasRas says:

    Things I’ve learned from history: Bankers are *always* in charge. This is nothing new. And always will be.

    There is no such thing as a new banker. A lot of the bankers that got us here are gone, but the protege is in their place. Just the way it is…

    Those who think we can do this extreme quasi balance adjustment that “works on paper” without unintended consequences in the social fabric of the country are naive in their thoughts it will hurt for a little while but be better. Hopefully these people with this view are pro-NRA because if the chasm between the haves and have nots widens much more, protection will be what you want and you’ll wish you were long ammo, not gold….

    I find it telling that the fine, fiscally responsible folk out there *still* are not willing to discuss sacred cows–and yet those are the areas that are truly broke, truly expensive, truly out of control. This tells me their high minded principles are for show only.

    Tactically speaking, Obama could cut one tax in exchange for getting rid of the loopholes currently used…Corporate tax. Cut it to 15% max, after all that is generally the max that any corp pays–and there are a lot that pay nothing. Take it down to that level, remove all the fancy loopholes so it is actually paid, and you will see additional revenues. Ever notice that how many companies can figure a way to not pay taxes here, but they rare get out of their foreign taxes? Have those foreign taxes stopped them from doing business overseas?? No, actually foreign business as a percentage of revenue has done nothing but go up for the last 10-15 yrs… So, there is little to no correlation between Paying taxes, and doing business. We give them a free ride here because they grease the wheels here, provide second careers for retiring politicians, etc… This has to stop.

    Military spending: We run the military in a fashion that is decades behind… Large force armies are past tense. Tactical teams with air support are more relevant to today’s situations. More drones, less fighter jets. More surgical actions, less police actions. If any public corporation was as bloated as our defense department, share activists would be on it forcing it to rightsize itself.

    Increase taxes? How about national law legalizing marijuana? Regulate it, tax it. Let pharma take over the “product line” Stability in Afghanistan? How about letting pharma make pain meds from the real deal, poppies, and rebuild the economy by buying their suppy of poppy plants for pain meds. Instead of make synthetic narcotics, which is probably more expensive, use the real stuff, sop up the supply so there is none available to the street…

    Means test Social Security. Now. Even those on it. If you have an income level of “x” you get reduced benefits. Or you get back what you paid in plus inflation. A lump sum choice…

    Medicare–rightsize what is paid to Drs. for activity. Plumbers get paid more than docs on some procedures…so what do they do? They have a lot of extra tests, follow up, etcetera, that *take time* in order to get a reasonable pay. But the time wasted leads to a highly inefficient system of healthcare, a billing nightmare, and abuse. Oh, and increase the premiums that defense people pay for healthcare. It has stayed the same for decades, so in effect has become cheaper in real terms.

    Every government entity needs analysis of the organization, policies, and efficiencies and then right sized. A friend’s experience buying a foreclose home thru HUD was horrible. It is no wonder we’re going to have problems clearing inventory, they make it a painful and arduous experience.

    But you know what…these are all things that should be discussed while doing the BUDGET, not while raising the debt ceiling. That is my main frustration-THEY passed the budget (both DEM and REP). THEY committed to the expenditures. Now raise the debt ceiling as it need be because of the budget that was passed… This is not hard stuff.

  71. in view of the above ‘Comments’, seems Glenn, and numerous others in the Post, linked below, have it Correct..

    Glenn Greenwald writes:

    “…So potent, so overarching, are tribal loyalties in American politics that partisans will support, or at least tolerate, any and all policies their party’s leader endorses – even if those policies are ones they long claimed to loathe.This dynamic has repeatedly emerged in numerous contexts. Obama has continued Bush/Cheney terrorism policies – once viciously denounced by Democrats – of indefinite detention, renditions, secret prisons by proxy, and sweeping secrecy doctrines.

    He has gone further than his predecessor by waging an unprecedented war on whistleblowers, seizing the power to assassinate U.S. citizens without due process far from any battlefield, massively escalating drone attacks in multiple nations, and asserting the authority to unilaterally prosecute a war (in Libya) even in defiance of a Congressional vote against authorising the war.

    And now he is devoting all of his presidential power to cutting the entitlement programmes that have been the defining hallmark of the Democratic party since Franklin Roosevelt’s New Deal. The silence from progressive partisans is defeaning – and depressing, though sadly predictable.

    ***

    Obama is now on the verge of injecting what until recently was the politically toxic and unattainable dream of Wall Street and the American right – attacks on the nation’s social safety net – into the heart and soul of the Democratic party’s platform. Those progressives who are guided more by party loyalty than actual belief will seamlessly transform from virulent opponents of such cuts into their primary defenders….”

    http://www.ritholtz.com/blog/2011/07/obama-will-not-take-yes-for-an-answer-on-debt-ceiling-debate/

  72. sainttjames says:

    @wunsacon

    “Saintjames or any Republicans, would you take a shot at reconciling these issues for me?”

    I can’t…I think the entire process is rotten to the core. A cabal decides which candidates to place in front of the electorate….and you get to pick one of the two. Reminds one of the Soviet Union and ‘elections’ they used to hold.

    Further, as long as the the govt. is able to maintain the two minutes of hate, most will not understand what is really taking place.

  73. DeDude says:

    “…first thing you learn from studying…”

    There is your problem. These people do not learn from studying. They pull their opinions out of their own dumb asses and call it “common sense”. They refuse to engage in fact-based arguments – simply claiming that any facts that get in the way of their opinion is a conspiracy. Sometimes they invent or distort facts in support of their opinion. But usually it is just stating opinion as fact and ignoring all else.

  74. mathman says:

    Politics (crony capitalism) as a viable source of positive change for the majority of U.S. citizenry is over:

    http://www.rasmussenreports.com/public_content/politics/general_politics/july_2011/new_high_46_think_most_in_congress_are_corrupt

    Its not a matter of right or left, Rep or Dem, conservative or liberal – it’s the fact that our entire human venture is unsustainable and that there is no leadership anywhere. We can’t all live like the Kardashians and expect this to go on for very long. In fact, we’re at the beginning of a “great disruption” that will significantly lower the standards of living in most of the developed countries.

    We’re to the point of collapse in the U.S. now that we can’t even trust our own agencies to operate correctly:
    http://www.reuters.com/article/2011/07/26/us-fda-cetero-violation-idUSTRE76P7E320110726

    and finally an article of interest for you investor types:
    http://jessescrossroadscafe.blogspot.com/2011/07/rosenbergs-seven-point-plan-for.html

  75. Liminal Hack says:

    “”I think Boehner should step down. He’s ineffectual,” said Dale Chiusano, a retired federal employee who was among 40 people at a Tea Party rally on Capitol Hill Wednesday. “

  76. beaufou says:

    I think you made your point about fiscal tightening in your last Washington Post column, it was very enlightening, shame more Tea Party people can’t read or won’t read or try to understand what is happening around them.
    As for dismantling the Federal Government and hoping for a default, I think they have forgotten the Dollar is the reserve currency and a US default would have far reaching consequences around the world, not just a set of minor incidents such as a possible devaluation.
    The Euro would implode and so would the currencies tied to the Dollar provoking a freeze in international exchanges plunging the whole world into another great depression.
    This is serious business and I’m afraid Tea Party people are not very serious.

  77. rktbrkr says:

    We have 2 nuke aircraft carriers being built at a budgeted cost of over $5B each, we already have 11 which is 10 more than any of our “enemies”. Crazy.

    We’ve fought undeclared wars fought with money “borrowed” from dedicated SocSec and Medicare taxes, now that retirees are drawing on the taxes they paid the Rs are calling them leeches and parasites and are hellbent to default on these obligations.

  78. [...] If this tactical gamble to gather sound bites for the 2012 campaign creates a credit crisis, the Republican’s, not Obama will have gone down as the fools who put the abash on the economy, the markets, and heightened social acrimony close to boiling points. To imply Obama has control of this issue and can have impact is false. Dem’s have Senate, Republican’s have House, and Obama is in the Executive Branch’which can only suggest and plea with his Dem’s in the legislative branch (who are much more senior than he in D.C. experience, so not much pull’). Read more on Tea Party [...]

  79. Petey Wheatstraw says:

    We have been pitted neighbor against neighbor. It’s the Hatfields vs. the McCoys, and the internecine conflict is too heated for us to understand that we’ve been baited into tearing apart the only structure that keeps us safe and prosperous: Our government (not the politicians or bureaucrats, but the Constitutional Republic). A house divided against itself cannot stand. Our social argument is now too loud and heated to stop and think about what we will do next. We are ruled by emotion, not reason. Truth and/or facts do not matter.

    Stupid is as stupid does.

    The tea party is a false front. Too few people to make a real difference, but plenty of instigation and amplification by the Power classes. We know these to be facts, yet we keep arguing the false dichotomy they present to us.

    We have already given away the wealth of our community. It’s too late to get it back without a struggle. It’s unfortunate that by the time the smoke clears and cooler heads prevail, we will be too tired and broke to do much about it.

    Anyone waiting for Jesus, John Galt, Rush Limbaugh, JFK, MLK, or anyone from the political class, to save us from our own collective stupidity, will regret both not having paid attention to their situation/surroundings/wisdom of our elders and not having applied truly rational/conservative/responsible/mature behaviors to the act of governing ourselves.

    It would be easy to say that hard-learned lessons are the most valuable, but despite the lessons those who came before us learned and shared with us, we have chosen to relearn them by personal experience. Sometimes the hardest learned lesson is that you can’t ever get back to where you started.

    The game is already over. Tomorrow, we survey the damage. Then, maybe, we begin picking up the pieces.

  80. [...] it is. From Ian Shepherdson of High Frequency Economics via The Big Picture: “The Speaker is in office, but not in power, because the Tea Partiers do not respect party [...]

  81. VennData says:

    wunsacon

    “…No, you can print money not backed by debt…”

    No. The Fed buys debt for every single dollar they inject into the system. This is a fact, non-arguable. They buy the debt on the public markets, that is how they maintain the interest rates.

    Taxes are at generational lows, those tax cuts didn’t do any “good” for the economy under bush, left us with an S&L mess under Reagan. Supply Side Tax cuts have never shrunk the debt and deficit.

    If any of you are really Libertarian, than tell the GOP to offer to cut medicare in half, the military, and end Social Security (Problem since it takes in more revenue than pays out and has since Reagan) the VA, etc. But you don’t. you don’t because it is an un-electable platform.

  82. Greg0658 says:

    Alex@1:41am “Bring taxes back to where they were in the Clinton era AND put the tax paying middle class back to work and magically the deficits and debt will come down.”*
    ..but..
    the repossessions will stop and the usa will not rebalance (deflate) to the rest of the world
    we don’t need countries / WorldTradeOrg rules

    * coda – long tail gradual increase’g taxes to point businessman saying enough is enough … and I like countries

  83. This is balderdash. If the non-Tea Party Repubs and Democrats reached a deal, then they could override any Tea Party candidates. The establishment just wants to blame the Tea Party for this mess, but it still comes down to the Republicrats not getting a deal done.

    I think it is great we finally have a group of legislators forcing the parties that got us into this mess to deal with the issue with substantial moves.

  84. machinehead says:

    Ian Shepherdson — just another useless liberal ideologue, trying to cloak his naked partisanship in economic jargon. *FAIL*

    What is High Frequency Economics anyway — sounds like an HFT algo. Pull the plug, Jim!

  85. machinehead says:

    Ian Shepherdson — just another useless liberal ideologue, trying to cloak his naked partisanship in economic jargon. *FAIL*

    What is High Frequency Economics anyway — sounds like an HFT algo. Pull the plug, Jim!

  86. slobodanc says:

    This is elitist and arrogant statement from a selfish ignorant person.
    Regardless of how you agree with or not, you cannot ignore the current events and experience of others who were on the same path as US (Greece, etc.) The destination is well known and we are observing the consequences in Europe. Why is it “rational” to continue on the present course repeating the mistakes????
    How can one explain that the US state is capable of borrowing ever more while the banks are denying credit to US citizens every day?!? Why should US citizens be denied credit while US state is not?
    After all it is US citizens who stand behind the US state.

    The debate itself demonstrates who twisted involved parties have become. How can someone make a rational claim that a small reduction in borrowing (not full removing deficit, just reducing it) can in any way be “nuts”?!?! Meanwhile I don’t see any logical explanation why borrowing ever more for short/mid term is not “nuts”

    Clearly the elites, both political and business, are far removed from the reality. They are no longer competent and capable of formulating rational and defensible position. What is left are one lines threats and posturing with no bases.

    Sooner or later SP/Moody hammer will come down. (or some act of God :(:(:(

  87. rktbrkr says:

    The sensible thing to do would be to raise the debt ceiling and then approach spending cuts, revenue increases, tax code changes in a thoughtful balanced manner that would serve us for decade(s), I wish we could flash back to the Eisenhower era, politics these days aren’t serving the people.

  88. wally says:

    Looks like the government-is-evil wackos are settling in as BP posters.

    Civilization takes work and costs money. If you don’t want to pay, there are lots of uncivilized places to move to. .. fortunately for you and for us.

  89. Gene-OK says:

    Most Republicans don’t want smaller government now? I’m glad I am not one of those Republicans.

    I do want smaller government starting now. I’ve lived within my means for the last 40 years. I reached the conclusion in 1979 that I could not depend on SS and saved accordingly. I am sick and tired of the whining about financial disasters and shrinking government.

    Shrink government now! Audit the Federal Reserve. Perhaps, maybe we should stop inventing money out of thin air?

    Maybe we need the parties to rename themselves from Republicans and Democrats to “Bigger Government Party Owned By Special Interests” and “Biggest Possible Government Party Owned By Special Interests”.

  90. Greg0658 says:

    Langone on CNBC this am would like to see another crack at the debt ceiling before the election and I’m in that camp now too .. but not during Tday Xmas or NY’12 .. how about March 15th (Thurs) Farmer Tax Day .. and November 6th 2012 (Tues) Election Day .. and that leaves 236 days for electioneering .. plenty of time to spend $1B dollars into the MSM to keep our 100+channels on cable and 1000+ newspapers in business

  91. number2son says:

    Exactly what did people think would happen when they gave office to people whose first principle is that they don’t believe in government? That this has resulted in a broken and dysfunctional government should come as no surprise to anyone with an ounce of sense.

  92. number2son says:

    wally … hear hear!

  93. Transor Z says:

    Here’s a fundamental problem with arguing budget cuts in the midst of a manufactured crisis: dollar values and percentages by themselves are meaningless.

    It caters to intellectual laziness and obfuscation to throw large numbers around. An appropriate discussion has to be rooted in the question, “What kind of country to we want to be?”

    But that’s a difficult conversation and one that requires actual data and research to argue and understand. To paraphrase wally above, that’s a conversation that would take actual work to hold intelligently and rationally.

  94. AlexM says:

    In the end the Tea Party is following the marching orders given to it by one of it’s benefactors, the Koch family, and that is to create a huge political stink about much raised in the past debt ceiling. The key issue for them is the ability to bring it up in the next six to nine months and create another huge stink with the drama queens of the house waving the “Obama is a failed president banner” again.

    Obama wants to debt ceiling issue to be settled so that it does not become a Tea Party bludgeon just before the elections, which is why he is sticking to his time line of 18 months.

    If anyone is still doubting that this is a totally political move, Obama has had to raise the debt ceiling three times before and only now is it a life and death issue for the Tea Party.

    The money has already been spent, raising the ceiling pays the bills.

  95. Joe Friday says:

    Cdale_dog,

    Do you guys really think raising taxes during a recession so that we can redistribute even more wealth from those who are working or investing to those who are sitting on their couch watching Judge Judy and Springer is the right approach here?

    Explain why reversing the failed policy of redistributing the wealth UPWARD which is what got us where we are now is not the correct action.

    How about we just SPEND LESS! Is that such a novel concept?“:

    No, it’s not novel at all. You can watch it FAIL in real-time in Britain as their economy tanked and has stayed down.

  96. Joe Friday says:

    JasRas,

    Corporate tax. Cut it to 15% max, after all that is generally the max that any corp pays–and there are a lot that pay nothing. Take it down to that level, remove all the fancy loopholes so it is actually paid, and you will see additional revenues.

    Tax cuts for the Rich & Corporate are overwhelmingly responsible for our massive federal deficits & debt, and you want LOWER the rate ?

    Please.

    About two-thirds of corporations pay ZERO taxes and the rest less than 5%. The ‘remove loopholes and lower the rate’ is a scam. PAY YOUT TAXES DEADBEATS.

    Means test Social Security. Now. Even those on it.

    Why ?

    A) Social Security is not contributing to the federal deficits & debt. Why do so many want to target for cuts that which is not driving the federal deficits & debt ?

    B) It’s already “means tested”, as no matter how much you pay in, there is a maximum monthly benefit payout.

    Medicare–rightsize what is paid to Drs. for activity.

    The only problem Medicare has is that it is purchasing medical care from a bloated greedy inefficient corporate healthcare industry. Medicare is FAR more efficient than the private-sector.

  97. arrian says:

    According to the independent non-partisan Congressional Budget Office, the vast overwhelming majority of our current federal deficits and debt, as well as our medium-term projected future federal deficits and debt, are as a direct result of the numerous rounds of massive tax cuts for the Rich & Corporate enacted by the previous administration and Republican Congressional Majority.

    Could you provide a link to the specific CBO report?

  98. AtlasRocked says:

    If I hit my credit card limit, it’s my fault. The credit card company is not responsible for me hitting my charge limit. No one questions the credit card company’s rule, it is considered sane and healthy.

    If a business is told by their investors they won’t loan them any more money, it’s the business’s fault they borrowed too much, not the investor’s fault. No one questions the investors decision, they are considered sane and healthy.

    Now the Gov’t is told by a concerned group of citizens they won’t loan them any more money. Would sane and healthy people reverse field
    in this case and point to those against more loans as radical and unhealthy?

    ~~~
    BR: That is incorrect — and disingenuous as well.

    The US can borrow, and at very advantageous rates. This is not remotely about lenders willingness to lend money to the US.

    What is under debate is whether the technical mechanics of allowing additional borrowing — by a congress that has already set the tax and spending that guarantees hitting the debt ceiling — to give the technical permissions to do borrow to meet the spending and taxing legislation congress already passed.

    Never let the facts get int he way of good narrative.

  99. WFTA says:

    Where to begin?

    If the default, and I am confident we will have a failure to raise the debt ceiling, causes a market drop of 30%, it will cost me several hundreds of thousands of dollars in personal savings and investment plus whatever the eventual cut in Social Security benefits turns out to be. I will probably have to work an additional 2-3 years or more to retire with security. WHO DO I HAVE TO THANK?

    Let’s start with the 58.2% of voting-eligible Americans who just could not be bothered to get off their fat, lazy asses and participate in the 2008 election other than to piss and moan afterwards.

    Or maybe it is the roughly 20% of voting-eligible racist peckerwoods who are completely beside themselves in rage that a black man should be living in the White House who, to their credit, went to the polls, because something mattered to them.

    The God-knows-how-many Americans who can’t connect the dots as to why healthcare will soon represent $1 of every $5 spent in this country (public and private) and yet produces a result that is sub-par to Cuba.

    Not to be confused with the idiot Tea Beggars (not a typo) who apparently have a physical need to be angry about something and are easily convinced that all federal spending is welfare paid to keep blacks and Latinos from working. The only mystery I am waiting to see revealed is how their Republican congressman is going to explain that the Social Security that they’ve been paying into for the last 40 years is going into general fund so that hedge fund managers can have their income taxed at 15%.

    Maybe I should thank our Supreme Court for deciding that what democracy need is a good hosing down with special interest and corporate money.

    Or the never-be-seen-as-soft-on-anything politicians who have assured that half the world’s spending on weaponry is paid for by me, the American taxpayer, and the moronic public which never bothers to question whether it makes us any safer.

  100. AtlasRocked says:

    Let me get this straight: One group of people squandered $4 trillion on a
    guess at what would return massive ROI to the economy. They sold
    the plan as a sure thing. Then they added massive new benfits that
    they promised would create 4M jobs. In private investment, that’s a solid basis for
    suing the investment company for fraudulent claims on ROI, right? The capitalist
    perps would be jailed – but in your mind, the people that got ripped off are mandated to let the rip off continue?