[Marxism] The debt-limit crisis: a bipartisan fraud
ffeldman at verizon.net
Fri Jul 15 08:00:56 MDT 2011
Although Republicans state a part of the truth when they say there is
no justification for Obama's threat to stop funding Social Security and
Medicare unless both parties unite on measures to cut Social Security
and Medicare, the fact is that the current "crisis" is a bipartisan
scam. There is no "crisis" except for the fact that the politicians and
the media want to have a "crisis" in order to make big and unprecedented
in the already very battered gains won by working people in the past..
The Fourteenth Amendment to the constitution explicitly requires the
government to pay or keep up interest payments on its obligations. It
bars the government from refusing to do so. (In fact, one of the key
reasons for the adoption of the US constitution from 1789-1791 was to
assure government debt as a trough from which the rich could reliably feed.
Shane Mage summarized yesterday on the Pen-L list
Default ain't credible. The stupid .'debt limit' law can't override the
explicit 14th Amendment requirement that the government honor its
debts. Nor does the president have to borrow unilaterally to do so. By
using the constitutional authority of the Treasury to 'coin money' he
need only mint a coin of sufficiently large denomination, pay it to the
Fed in return for US bonds it presently holds, and those bonds are no
longer outstanding debt counted against the 'debt ceiling.'
Mage concluded: " Default ain't credible. Yet everyone seems to treat it
as possible. Only in America."
Nation publisher Katrina vanden Huevel is one of the few in the
capitalist media who has stressed the president's power to simply brush
off the August 2 date for raising the "debt-limit." under the 14th
amendment. The president, despite his claims to the contrary, has the
power as well as the constitutional obligation to use this power against
"debt limit" racketeering.
However, the Nation editors and most of the contributors go along with
the favorable contrasting of the "reasonable" Obama willingness to put
SS and Medicare on the chopping block with the Republican intransigence
against imposing modest tax increases one the wealthy. And the
battle cry of liberal Democrats becomes, "No cuts in SS or Medicare
UNLESS there are tax increases on the rich." This is a slogan IN FAVOR
of cutting SS and Medicare..
This does not mean that there can never be a default crisis, but that
will be a product of a deep social and economic crisis, which is not
yet the case here and will not become the case on
August 2. The passing of August 2 without a deficit compromise will not
"destroy the US economy, " as liberals are claiming.
Working people have absolutely nothing at stake in the "debt limit"
debate. And the question of taxes really is not central in our lives.
When all is said and done, it's all surplus value -- a product of US
capitalist exploitation of working people all over the world. The
endless debates over taxes do nothing to change this situation.
Our only stake in this situation is the defense of SS, Medicare,
unemployment compensation and all elements of our social wage. In that
fight, as far as I can see, all sides of the Great Debate on the ""debt
limit" are on the other side.
I Don't Believe You. You're a Liar.
By David Weigel
Posted Thursday, Jul. 14, 2011, at 3:58 PM EDT
There is a Reality Gap in the negotiations over the debt limit. The
gap is between what Republicans think will happen if the debt ceiling
isn't raised and what Democrats and the Treasury think will happen.
Republicans simply don't believe that default needs to happen; Treasury
and Democrats say it will if the limit isn't raised.
After meeting with Senate Democrats and Treasury Secretary Timothy
Geithner, Senate Majority Leader Harry Reid went after Republicans on
the Reality Gap.
"August 2 is the deadline," said Reid. "We're already seeing
consequences. Credit rating agencies have already warned us they're
thinking about downgrading us from our AAA status. Yesterday Moody's
announced that they're already examining the possibility that they'll
downgrade it. If we don't reach an agreement, we'll have less than 2/3
of the funds we need to pay our obligations." Later: "There is no wiggle
Geithner spoke next, delivering a short statement and leaving before
questions. "We looked at all available options and we have no way to
give Congress more time to solve this problem," he said. "We're running
out of time. The eyes of the country are on us. The eyes of the world
are on us. We need to make sure we stand together and send a definitive
signal, to avoid default and to also take advantage of this opportunity
to make some progress in dealing with our long-term fiscal problems."
As luck would have it, right after this wrapped up, Senate conservatives
were talking about the letter they were sending to the president,
chastizing him for saying Social Security checks might not go out if the
debt limit is hit. Now: Even getting to this argument is a rhetorical
coup for Republicans. Even getting Harry Reid to talk about the
government pulling in revenue after Aug. 2 is something. Because their
argument remains: We can pay the bills that matter without raising the
"I frankly think the president should apologize," said Sen. Rand Paul.
"The president should apologize for politicizing Social Security.
There's plenty of revenue to pay for sending out all of the Social
Security checks. In fact, there's plenty of revenue to pay all of the
This is not the most straightforward argument ever made by a senator. As
Benjy Sarlin points out, Republicans are fairly cagey when asked what
they'd cut, because "paying soldiers" sounds good, but "selling off
parks and stiffing the FBI" doesn't. So I also asked Sen. Ron Johnson
why Republican plans to prioritize spending -- even if that was workable
-- made sense, because rating agencies don't seem to take the plan very
seriously. Johnson pointed right back to Obama.
"A responsible leader wouldn't be scaring the markets, scaring the
American people," said Johnson. "A responsible leader would have rolled
up his sleeves months ago. In terms of this August 2 deadline, do we
have something to worry about? Probably, because it will be a self
fulfilling prophecy. Because the administration has been scaring the
markets, they've been roiling the markets for so long, yeah, the markets
will probably be a little upset if some things didn't occur. But I put
that squarely on the back of the president for failing to lead by
scaring the markets."
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