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Can you charge the country’s top elected officials with Treason?

Posted: July 12, 2011 | Author: | Filed under: Federal Budget, Federal Budget and Budget deficit | Tags: , |27 Comments

It seems as though our nation’s “leaders” are looking to bring down our country.  It’s the only explanation that I have. Also, I’m at the point where I think Joe Biden is the only sane one in the room.  Pinch me!  Please!

Headlines of note to prove my case:

Boehner Says The Debt Limit Increase Is Obama’s Problem

Speaker of the House John Boehner introduced a new argument to the debt ceiling and deficit reduction talks Tuesday, saying raising the borrowing limit is Republicans’ concession in the negotiations.”This debt limit increase is [Obama’s] problem,” he said.

Boehner is trying to force a deficit reduction package entirely based on spending cuts, saying Obama’s demands for new revenues would only be considered if Obama accepted deep cuts to entitlements.

My guess is that Boehner has absolutely no control over the Republicans in the House.  Some one from Wall Street needs to take a few of them to the wood shed.   Meanwhile, Mitch McConnell appears to be interested in nothing but political play.   Some senate Republicans would obviously join the president but it appears that will happen over McConnell’s dead mind and conscious.  McConnell still  refuses to admit the Republicans lost the White House 3 years ago.  He’s become some kind of Captain Queeg who gets in front of the press then rattles ball bearings in his fist while muttering “one term president, strawberries, one term president, it’s the strawberries, I tell you …” repeatedly.

McConnell: Obama can’t deliver major deficit-reduction deal

Senate Republican Leader Mitch McConnell (Ky.) on Tuesday said a comprehensive deficit-reduction deal is not attainable as long as Barack Obama is president.

McConnell declared that deficit-reduction talks have come to an unsolvable deadlock.

“After years of discussions and months of negotiations, I have little question that as long as this president is in the Oval Office, a real solution is unattainable,” he said.McConnell has called for reforms to curb the future growth of Social Security and Medicare since taking over as Republican leader at the end of 2006.

So, what’s the response of the leader of the free world?  Would you call this riling up or scaring seniors?

Obama says he cannot guarantee Social Security checks will go out on August 3

President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

“I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it,” Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2.

This is insane.  No one’s made any sense in this discussion since Joe Biden told his gang of six to get real. Meanwhile, we’re beginning to see financial economists question this game of chicken.This extremely good analysis is written by Jeffrey Frankel the James W. Harpel Professor of Capital Formation and Growth at Harvard’s Kennedy School.

In the 1955 movie Rebel Without a Cause, James Dean and a teenage rival race two cars to the edge of a cliff in a game of chicken.  Both intend to jump out at the last moment.  But the other guy miscalculates, and goes over the cliff with the car.

This is the game that is being played out in Washington this month over the debt ceiling.  The chance is at least 1/4 that the result will be similarly disastrous.

It is amazing that the financial markets continue to view the standoff with equanimity.   Interest rates on US treasury bonds remain very low, barely above 3% at the ten-year maturity.   Evidently it is still considered a sign of sophistication to say “This is just politics as usual.  They will come to an agreement in the end.”  Probably they will.  But maybe not.   (I’d put a ½ probability on an agreement that raises the debt limit, but just muddles through in terms of the genuine long term fiscal problem.  That leaves at most a ¼ probability of a genuine long-term solution of the sort that President Obama apparently proposed last week – described as worth $4 trillion over ten years.)

My advice to investors is to shift immediately out of US treasuries and into high-rated corporate bonds.  If the worst happens, you will probably save yourself from a big capital loss within the next month.  If not, there is no harm done.

The game is not symmetric.  The Republicans are the ones who are miscalculating.   Evidently they are confident of prevailing:  they rejected the President’s offer, even though he was willing to cut entitlement programs.

The situation is complicated because there are a number of different people crammed into the Republican car.    There is one guy who is obsessed with the theory that, come August 3, the federal government could retain its top credit rating if it continued to service its debt by ceasing payment on its other bills.  But this would mean failing to honor legal obligations that have already been incurred (paying suppliers for paper clips that have already been bought, paying soldiers their wages for last month’s service, sending social security recipients their checks, etc.).  This is like observing that the cliff is not a 90 degree drop-off, but only 110 degrees.   It doesn’t matter: the car would still go crashing into the ocean far below.   The government’s credit would still be downgraded and global investors would still demand higher interest rates to hold US treasuries, probably on a long-term basis.

There are other guys (and gals) in the car who are even more delusional.   They are dead set on a policy of immediately eliminating the budget deficit (e.g., those opposed to raising the debt ceiling no matter what, or those campaigning for a balanced budget amendment), and doing it primarily by cutting nondefense discretionary spending.  This is literally impossible, arithmetically.  But they honestly don’t know this.   It is as if they were insisting that the car can fly.   Sometimes it can be a good bargaining position to adopt a very extreme position.  But if you are demanding that the car flies, you are not going to get your way no matter how determined you are.

What we have here are a group of rebels with self-serving causes.   Again, the President should just invoke the 14th amendment,pay the bills, and send the DOJ after the many folks here that appear to be willing to tank our country for their personal political gain.  Threatening seniors’ social security is not leadership. It’s just a matter of time before the financial markets start noticing these folks are not acting in the best interest of our country, our economy, or our ability to deal with our economic challenges.   We’re lucky that they still think this is the chicken dance right now instead of a chicken race.  It’s going to be a lot harder to pay off the debt with the interest rates that go along with junk bonds. This is not the place for political grandstanding.

update: Okay, this is weird … what’s McConnell up to now?

The Big Blink? McConnell Proposes Giving Obama Authority To Raise Debt Limit Alone

Senate Minority Leader Mitch McConnell (R-KY) has proposed a sort of escape hatch for Congressional Republicans, who have threatened not to raise the national debt limit — and trigger a default — if Democrats don’t agree to trillions of dollars in cuts to popular social programs.

The plan is designed to give President Obama the power to raise the debt limit through the end of his first term on his own, but to force Democrats to take a series of votes on the debt limit vote in the months leading up to the election.

This still leaves me wondering if Boehner can deliver enough Republican votes to actually head off a purposeful debt default.

27 Comments on “Can you charge the country’s top elected officials with Treason?”

  1. WomanVoter says:
    July 12, 2011 at 2:23 pm

    AngryVoters John H Kennedy
    Now Obama says Vets may also suffer if no deal
    http://reut.rs/pHmkRy
    RT @trayNTP #p2 #1u /Are u tired of him Scaring US for political gain?

    • WomanVoter says:
      July 12, 2011 at 2:24 pm

      Ooopsie, that was a quote…

    • dakinikat says:
      July 12, 2011 at 2:39 pm

      I’m supposing he’s trying to get people to call their congress critterz but it does seem cruel doesn’t it?

      • WomanVoter says:
        July 12, 2011 at 6:47 pm

        Bottom line is we will all suffer…I don’t believe anything he says, after he blocked the dog bone he threw at us too (Medicare Buy In)…and we got NOTHING!

      • Fannie says:
        July 12, 2011 at 7:44 pm

        Dak explain Obama invoking the 14th amendment to pay the bills.

        • dakinikat says:
          July 12, 2011 at 7:51 pm

          “The validity of the public debt of the United States . . . shall not be questioned.” -Amendment XIV, Sect. 4, Constitution of the United States

          http://www.capecodtoday.com/blogs/index.php/2011/07/12/the-fourteenth-amendment-solution?blog=214

          If no agreement is reached between the President and Congress on deficit reduction as the GOP House ideologues are insisting on for raising the debt ceiling before the end of the month, the result will be massive default on our existing lawful debts. That, put into 14th Amendment terms, would clearly be a repudiation of the validity of our public debt by the GOP House majority holding it hostage in order to advance its extreme right-wing ideology, and would therefore be unconstitutional.

          In that event, it would be both appropriate and necessary for President Obama to simply tell Treasury Secretary Geithner to borrow the money needed to pay the existing debt in keeping with the mandate of the 14th Amendment. This would not solve our credit crisis, but it would temporarily prevent the short term disaster, the debacle that topples “the beast” that Norquist, Ryan, Boehner et alii so fervently desire to bring about in their zealous advocacy of right-wing Teabagger ideology.

          This “nuclear option” would inevitably lead to litigation, with the GOP arguing that the President does not have such authority. But the history of the 14th Amendment, where Sect. 4 was inserted specifically to allow President Lincoln to order payment of our war debts unilaterally by overriding Congressional bickering, should certainly pass muster even under Justice Scalia’s “original intent” analysis for interpreting the Constitution.

          It would also expose the utter hypocrisy of today’s post-Reagan Republican Party -the spectacle of Republicans filing a lawsuit to deny the President the authority to prevent economic disaster solely to promote their extreme right-wing ideology as opposed to serving both the national defense and the general welfare of We the People as mandated by the tax clause of the Constitution of the United States. Secretary Geithner in fact has raised this 14th Amendment option at a Congressional hearing last May.

          So if I were President, I’d tell those mindless GOP Teabaggers to forget about cutting Medicare and Social Security.

      • dakinikat says:
        July 12, 2011 at 7:55 pm

        Fiscal Policy for the People? Why Obama Should Invoke the 14th Amendment.

        http://www.rooseveltinstitute.org/new-roosevelt/fiscal-policy-people-why-obama-should-invoke-14th-amendment

        The budget/debt ceiling negotiations have focused on spending cuts and tax hikes which are neither necessary nor desirable at this juncture. The time to invoke higher taxation or reduced government spending is when our economy is operating close to full capacity, experiencing real resource constraints, and thereby threatening inflation. Progressives need to stop accepting the false logic that we “need to be responsible” and “deal with the budget deficit at some point in the future” on the spurious grounds of “affordability”, solvency”, or “because the bond markets won’t fund us any longer.” That’s all wrong.

        Here’s a better idea: Invoke the 14th amendment and then stop talking about the budget deficit altogether. The US is not broke and cannot go bankrupt. Let go of that myth. When invoking the 14th, the President could argue that the deficit reduction principles embodied in the debt ceiling limit should never be an object of government policy. He can point out that non-discretionary elements of the budget — the automatic stabilizers like unemployment insurance — will fall as economic growth resumes, thereby reducing the deficit. He can remind us that there is only one reason why growth slows relative to productive capacity: Some sector spends less than before while another sector does not plug the spending drain.

      • Fannie says:
        July 12, 2011 at 8:05 pm

        Thanks Dak…….I was speculating as to how he could do that, and wondering if that was what McConnell meant when he said let Obama do what he was going to do. I don’t know if the surpreme court would back him up?

        It’s never been involked before, but I recall something about Carter in 1979.

  2. Minkoff Minx says:
    July 12, 2011 at 2:43 pm

    And all this time, Cantor stands to make money if there is no agreement…I just can’t believe it. Where is the accountability from the “press” and why are they staying silent?

    • dakinikat says:
      July 12, 2011 at 2:44 pm

      I think they buy into the idea that the debt is the problem right now. Most of them don’t appear to know any better.

      • Minkoff Minx says:
        July 12, 2011 at 2:48 pm

        I keep on thinking about that graph that Susie Madrak put up on her blog. The one where the Tweets sent to Obama at is Twit Town Hall is broken up into categories. Where the average joe sent questions about jobs, and the press sent questions about the debt ceiling. It was a very visual illustration…it sure made a point about who is concerned with what.

      • madamab says:
        July 12, 2011 at 7:23 pm

        Hi Skydancers! Great post, Dak.

        Not only do these morons not know any better, they’re too stupid to know it.

  3. Minkoff Minx says:
    July 12, 2011 at 2:51 pm

    Kat, a followup to that TPM link:

    Craven Reign | Talking Points Memo

    I just finished explaining that Mitch McConnell epic passing of the buck to President Obama amounts to one of the most brazen and open admissions of cynicism I’ve ever seen. McConnell is saying: Debt, Schmedt, we’ll let you do pretty much anything as long as we’ve got the politics wired to help us. But I spoke too soon because there are at least a few Democrats who are as craven or perhaps simply as weak-minded as McConnell. Sam Stein tweeted that while Redstate is calling for McConnell to be “burned in effigy” one “Dem source” calls McConnell’s move that of an “evil genius”

  4. paper doll says:
    July 12, 2011 at 3:23 pm

    The Big Blink? McConnell Proposes Giving Obama Authority To Raise Debt Limit Alone

    Sounds like he expects a GOPer , besides Obama , in the White House soon . …or Obama will be declared POTUS for life? ….weird

  5. paper doll says:
    July 12, 2011 at 3:25 pm

    oh and we are endless told there are banks too large to fail…butaccording to the same people, the USA is not too large to fail. The heat wave is confoozing me

  6. iIss Ayn Thrope says:
    July 12, 2011 at 3:32 pm

    I was ready to start saying blankety, blank, blank (and I still may, but right now it does indeed look like a blinkety, blink, blink. Sadly we still are left with people who play games (chicken anyone?), while we who are about to be screwed are gamed. And screwed again. And again.

    BTW I don’t like much, but I really like this blog thing you got dancing here.

  7. Captain Renault says:
    July 12, 2011 at 3:48 pm

    McConnell says one thing in the morning that Obama can’t deal, then seemingly capitulates in the afternoon. What did that kid have for lunch?

  8. dakinikat says:
    July 12, 2011 at 5:01 pm

    It’s Now Official: The GOP is a Party of Sixth Graders

    When John Boehner said earlier today that the debt ceiling was 100% Obama’s problem, I took it as political hyperbole. But apparently it was much more than that. A couple of hourse ago Boehner’s Senate doppelganger Mitch McConnell proposed a truly bizarre plan that would, literally, make the debt ceiling 100% Obama’s problem.

  9. Minkoff Minx says:
    July 12, 2011 at 5:24 pm

    Another link for you:

    Class Warfare Boomerangs on the GOP | Mother Jones

    When I came in from lunch and read about Mitch McConnell’s debt ceiling proposal, my jaw dropped. The cynicism of the thing was enough to leave my tongue hanging out of my mouth the entire time I was writing the post below. So that’s all I wrote about.

    But I suppose there’s a bigger picture here than just McConnell’s cynicism. And the bigger picture, obviously, is that McConnell wouldn’t have proposed giving Obama his debt ceiling increase with only political strings attached unless he was convinced that Republicans were losing the PR battle for a more comprehensive deal. And since the only real stumbling block to a comprehensive deal was Obama’s insistence on revenue increases, McConnell must have felt that they were losing the PR battle even there. After years of owning the tax issue, this must have come as something of a tectonic shock.

  10. foxyladi14 says:
    July 13, 2011 at 1:28 pm

    it,s all kabuki 🙂

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