Monday Reads

Posted: May 23, 2011 | Author: | Filed under: Economy, Foreign Affairs, morning reads | Tags: , , , , | 35 Comments

Good Morning!

Hopefully, by the time you read this, I’ll be off to my doctor’s office as the damned MRSA thing on my lip showed back up this weekend.  I look like some one botoxed me on one side.  This stuff is no fun.  I think it has something to do with this endless runny nose and weepy eyes I appear to have with this year’s horrible allergies.

New York Magazine‘s Gabriel Sherman has a potboiler article up called The Elephant in the Green Room: The circus Roger Ailes created at Fox News made his network $900 million last year. But it may have lost him something more important: the next election.  There’s some really, really juicy bits.  Here’s just one example.

All the 2012 candidates know that Ailes is a crucial constituency. “You can’t run for the Republican nomination without talking to Roger,” one GOPer told me. “Every single candidate has consulted with Roger.” But he hasn’t found any of them, including the adults in the room—Jon Huntsman, Mitch Daniels, Mitt Romney—compelling. “He finds flaws in every one,” says a person familiar with his thinking.

“He thinks things are going in a bad direction,” another Republican close to Ailes told me. “Roger is worried about the future of the country. He thinks the election of Obama is a disaster. He thinks Palin is an idiot. He thinks she’s stupid. He helped boost her up. People like Sarah Palin haven’t elevated the conservative movement.”

In the aftermath of the Tucson rampage, the national mood seemed to pivot. Ailes recognized that a Fox brand defined by Palin could be politically vulnerable. Two days after the shooting, he gave an interview to Russell Simmons and told him both sides needed to lower the temperature. “I told all of our guys, ‘Shut up, tone it down, make your argument intellectually.’ ”

It’ll take time to wade through it and you’ll learn more about Beck’s departure even if you just don’t want to, but it’s worth it.  It’s sort’ve one of those karmic car wreck articles.

Economist and blogger Brad Delong delivered the harsh news with nifty graphs in Phoenix, Arizona.  He calls his speech:  The Economic Outlook as of May 2011: Yes, This Is Called the Dismal Science. Why Do You Ask?

But now we have a stubbornly persistent slump in the economy. Now we have economic growth at about our normal long-run pace, with very little signs of closing the gap between the productive capacity of the American economy and its current level of production. We have a Washington DC that is dysfunctional–out of ammunition to take any effective additional steps to boost the economy. There is now substantial fear of inflation–even though there are no signs of inflation gathering anywhere rather than energy and food prices, and we understand that those reflect China’s growing demand and not any domestic price spiral. There is now substantial fear of crowding out–that boosting US government spending or cutting taxes to get more money into the hands of the consumers would discourage private investment even though there are no signs of crowding out even at our rapidly-growing level of the national debt. It is a fact that a bunch of us–including me–think that there really should be signs of crowding out right now–that financial markets should be scared of the fiscal future of America–but they are not. And there is the problem that Washington DC has degenerated into pure Dingbat Kabuki theater on lots of levels.

It is a fact that if congress simply goes home–doesn’t do anything for the next 10 years except keep the federal government on autopilot, or if it does do things if it pays for whatever increases in spending it enacts by raising taxes and pays for whatever tax cuts it enacts by cutting spending–that we do not have a long run deficit problem. If congress goes home for ten years our program spending is matched to our tax revenues, which means a declining debt burden because the growth rate of the economy is larger than the interest rate on our debt.

Our belief that we have a long-run deficit problem is based upon the belief that congress will pass laws that increase spending and that cut taxes–that it will repeal the Independent Payment Authorization Board’s authority to try to make Medicare more efficient, that it will repeal the Affordable Care Act’s tax on high-cost health plans. Given that the fear is based on a belief that some future congress will bust the budget, it is hard to see how we can address this fear through any possible piece of legislation today–for no congress can bind its successors.

This is a problem.

Wow.  What a downer.  I bet he doesn’t get invited to any of the kewl kids’ cocktail parties there!

Spain continues to experience political unrest. Spanish Youth are demanding “real democracy now”.

Thousands of people have taken to the streets of Spain protesting a round of austerity measures and calling for a boycott of major political parties in Sunday’s regional elections. The protests began last week with a march denouncing high levels of youth unemployment. A large crowd established a tent camp in Madrid’s Puerta del Sol Square, defying an ordinance barring protests.

Protester: “I’ll attempt to stay here tonight, because I think it is very important to retake the streets that politicians have taken away from us to do their campaigning, preventing us from protesting. That is what we feel every day with lack of resources and a huge limitation of democracy. We cannot continue to tolerate this situation.”

The NYT has an interesting bible quiz up on sex and religion.  A lot of it on the so-called social issues that cause all those right wing screeds.  I found this question and answer particularly interesting.

The people of Sodom were condemned principally for [what]

“Sodomy” as a term for gay male sex began to be commonly used only in the 11th century and would have surprised early religious commentators. They attributed Sodom’s problems with God to many different causes, including idolatry, threats toward strangers and general lack of compassion for the downtrodden. Ezekiel 16:49 suggests that Sodomites “had pride, excess of food, and prosperous ease, but did not aid the poor and needy.”

So, it wasn’t for being a haven for sex practices that offended puritans, it was for lack of compassion and generosity towards the poor.  Some one should phone Pat Robertson STAT!

There was a horrible tornado in Joplin Missouri last night.  It took out a hospital as well as many, many homes.  Here’s some footage of the aftermath.

A tornado also hit Minneapolis. Both tornadoes have caused fatalities. As always, the Red Cross and other responders are in need of more funds and you can give easily via your cellphone these days.  They are also responding to flood victims up and down the Mississippi.  I wonder what Pat Robertson will say since all of this appears to be hitting the bible belt?  Well, anyway, here’s a list of places accepting cash donations if you feel like taking up a collection.  We’re supposed to get our share of the weather by Thursday.  Hopefully it won’t add flash floods to the rising rivers and spillways.

Okay, well I have to go see a lady about some good drugs!  What’s on your reading and blogging list today?

How Badly Does the World Need iPads?

Posted: May 22, 2011 | Author: | Filed under: China, Corporate Crime, Foreign Affairs, health hazard, Human Rights, Psychopaths in charge, worker rights | Tags: , , , , , | 21 Comments

Man poses as Apple's Steve Jobs at protest in Hong Kong

Are these gadgets really worth the sacrifice of workers’ lives? I admit I’m not an Apple enthusiast, but I don’t think so. Last year there was a series of suicides at Foxconn plants and on Friday, there was a fatal explosion at a Foxcomm iPad factory in Chengdu, China, that killed two workers and injured 15 others. Today a third employee died from injuries sustained in the blast.

Company officials said the explosion occurred on Friday May 20 in one of the polishing workshops at the factory, and that the initial finding of a joint investigation task force led by government officials and law enforcement authorities was that combustible dust exploded in a duct.

A little more detail from Mashable.com:

…the Chinese government in Chengdu has taken over the plant, censoring the information flow to the extent that local newspapers aren’t reporting about it.

With numerous workers committing suicide at the company’s Shenzhen-based iPad plant last year, Foxconn attempted to remedy the situation by giving them raises, but still needed to increase the production capacity to meet increasing demand. As a result, the new factory was built, an enormous eight-building complex hastily constructed in a record-breaking 70 days to accommodate the voracious demand for the iPad 2.

Soon after the factory was built…Apple’s inspection team visited the facility, taking two days to inspect the buildings, production lines and “especially the workers’ dormitories.” After its inspection, Apple approved the plant for manufacturing iPads.

After the suicides in 2010, the group Students and Scholars Against Corporate Misbehavior (SACOM) investigated the factories and produced a report (pdf) that documents the horrors of the working conditions in Foxconn’s factories.

According to the Sydney Morning Herald, the study found that slave labor-type conditions are still in effect at the factories. Workers are now forced to sign “no-suicide pacts,” and they are routinely humiliated by “military-style managers.” They may have to work as much as 100 hours of overtime per month, and are still not paid a living wage–they earn only about $186 per month. And Foxconn “routinely” fails to pay workers the correct amounts they have earned. This is after Apple visited the factories and approved the wages and working conditions!

Conditions at Foxconn’s two Chengdu factories, which exclusively produce Apple iPads, were among the worst reported. While nets have been installed to catch suicidal workers, factory staff are reportedly required to sign “no-suicide” pacts which also give licence to Foxconn to institutionalise them if it sees fit.

Workers at Chengdu say they are routinely humiliated and scolded by management. One was forced to stand in a corner with his hands behind his back because he giggled with a colleague. Others have been required to write confession letters to their supervisors after making mistakes and in some cases read the letters out in front of colleagues.

“Some of my roommates weep in the dormitory. I want to cry as well but my tears have not come out,” said 19-year-old Chengdu worker Chen Liming.

Ah Ming, 19, who produces cases for the iPad, said he stands for at least 14 hours a day. He wakes up at 7am to queue for the bus to the factory and it is 9pm by the time he returns home every evening.

The report also found that workers don’t

have adequate protections to safeguard against occupational health and safety issues such as aluminium dust and harsh reactions from chemicals used in the production process.

“I’m breathing in dust at Foxconn just like a vacuum cleaner. My nostrils are totally black every day,” one male worker said.

From the aptly named “Crave” blog at Cnet.com:

SACOM researchers visited Foxconn plants in Chengdu, where iPads are produced; in Chongqing, a smaller facility making mostly HP products; and Foxconn’s huge campus in Shenzhen, where half a million workers assemble a variety of computers, mobile phones, and additional products for Apple, HP, Nokia, Dell, and others. The researchers claim to have observed a number of problems at the Chengdu facilities in particular:

Workers do not have adequate training on usage of chemicals and do not have regular on-post health examinations. A number of interviewees even complain they suffer from allergy, but the management does not probe into the adverse health impacts of workers. Workers also highlight the problem of poor ventilation and inadequate personal protective equipment.

While SACOM notes the lack of ventilation as a possible threat to workers’ respiratory health, it appears that it may also have been a contributing factor to Friday’s explosion, which reportedly was centered in the “polishing” section of Foxconn’s facilities.

According to the report, the polishing department is filled with aluminum dust and there is inadequate ventilation.

Both aluminum and magnesium are commonly used ingredients in industrial polish–magnesium is a highly flammable metal used in fireworks, flares, and flash powder. A buildup of such dust due to improper ventilation could have created dangerous conditions.

I don’t know about you, but I’m very glad I don’t have an iPad, because if I did I’d be tempted to trash it right about now. If this is what it takes to produce a gadget that appears to be little more than a glorified cell phone that doesn’t do much other than provide entertainment and status to its users, I say it’s not worth it.

Obama and the Right Wing Rage Machine

Posted: May 22, 2011 | Author: | Filed under: Barack Obama, Foreign Affairs, George W. Bush, Hillary Clinton, Israel, Middle East, Palestine, Patriot Act, Republican presidential politics, Surreality, U.S. Politics | Tags: , , , , , , , , , | 23 Comments

President Obama reiterated the same US stance to Israel that we’ve always had today at a meeting of the powerful pro-Israeli lobby AIPAC, just as he did in his speech last week.  For some reason, the speech at the State Department last week was mislabeled by Mittens Romney and others as  “throwing Israel under the bus.”   Here’s what the President said today.

[S]ince my position has been misrepresented several times, let me reaffirm what “1967 lines with mutually agreed swaps” means.

By definition, it means that the parties themselves – Israelis and Palestinians – will negotiate a border that is different than the one that existed on June 4, 1967. It is a well known formula to all who have worked on this issue for a generation. It allows the parties themselves to account for the changes that have taken place over the last forty-four years, including the new demographic realities on the ground and the needs of both sides. The ultimate goal is two states for two peoples. Israel as a Jewish state and the homeland for the Jewish people, and the state of Palestine as the homeland for the Palestinian people; each state enjoying self-determination, mutual recognition, and peace.

If there’s a controversy, then, it’s not based in substance. What I did on Thursday was to say publicly what has long been acknowledged privately. I have done so because we cannot afford to wait another decade, or another two decades, or another three decades, to achieve peace. The world is moving too fast. The extraordinary challenges facing Israel would only grow. Delay will undermine Israel’s security and the peace that the Israeli people deserve.

Why the outcry over the past few days to Obama’s maintaining the status quo? Here’s some quotes from SOS Clinton and Ex-prez Dubya that demonstrate this was nothing but manufactured rage on the part of the right wing noise machine.

Even the NY Times is getting into the act. In one sentence they claim that “using the 1967 boundaries as the baseline for a solution to the Israeli-Palestinian dispute” is a first by an American president, and just two paragraphs later quote President George W. Bush using the phrase: “it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949,” another way of describing the 1967 boundaries. Those two statements, by Obama and Bush, convey the same concept.

In 2009 Secretary of State Hillary Clinton said:

We believe that through good-faith negotiations the parties can mutually agree on an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements.

Where was the manufactured outrage then?

In 2008 President George W. Bush, on a middle east trip, said:

I believe that any peace agreement between them will require mutually agreed adjustments to the armistice lines of 1949 to reflect current realities and to ensure that the Palestinian state is viable and contiguous.

In 2005 President George W. Bush, at a White House meeting, said:

Any final status agreement must be reached between the two parties, and changes to the 1949 Armistice lines must be mutually agreed to.

President Obama is following the same policies put forth by George W. Bush. To claim that Obama’s speech represents some departure from previous U.S. policy is absurd.

When not manufacturing right wing rage, Republican Presidential contenders are demonstrating their foreign policy ignorance.  Thank goodness we have some one who knows foreign policy at the State Department!  Here’s pizza king and right wing talk show host Herman Cain demonstrating his foreign policy ignorance.

Despite his shallow understanding of foreign policy issues, Cain is still trying to go on the attack against Obama and create a partisan divide on Israel. He said last week that an “arrogant” Obama “threw Israel under the bus” in his recent speech on the Middle East. Trying to sound a hawkish note, Cain said his “Cain doctrine” is “You mess with Israel, you are messing with the United States of America.”
But this morning on Fox News Sunday, Cain showed just how limited his understanding is of the Middle East peace process. Asked by host Chris Wallace what he would be prepared to offer Palestinians as part of a deal, Cain responded, “Nothing.” Just moments later, Cain was dazed and confused when Wallace referenced the issue of “right of return” of Palestinian refugees:

WALLACE: Where do you stand on the right of return?

CAIN: The right of return? [pause] The right of return?

WALLACE: The Palestinian right of return.

CAIN: That’s something that should be negotiated. That’s something that should be negotiated.

Wallace then helpfully offered Cain a definition of “right of return” — “Palestinian refugees, the people that were kicked out of the land in 1948, should be able to or should have any right to return to Israeli land.”

Other foreign policy nitwits have  joined the faux outrage ranks. Quitterella even points to the old testament as some kind of geopolitical playbook.  Do you suppose she’s read  stories about the Kraken so she can have an opinion on Greece’s Navy?

I can never figure out why the I/P issue causes people’s heads to blow gaskets. I always hesitate to even offer up any news in the area because it’s caused complete meltdowns on blogs in the past.  There are some people on each side of the issue who simply can’t seem find any middle ground from.  Derailing any peace process appears to be their goal.

I consider the entire topic to be a hell realm. However, this particular kerfuffle reeks of the same kind of derangement we saw during the Clinton years. It’s getting so bad that I’m cracking this particular nut or group of nuts as the case may be.  This is like trying to deal with birthers and those who subscribe to the ‘secret Muslim’ meme.

Obama isn’t my favorite President by any stretch of the imagination, but aren’t there enough things to complain about right now–like the sneaky renewal of the Patriot Act–without manufacturing yet another conspiracy theory? SHEESH!

I can’t see the US selling out Israel anywhere in the near future.  They are obviously a US ally.  Trying to get both Palestinians and Israelis to be reasonable and come back to Peace Talks should be in everyone’s interest.  Don’t they still have their copies of the Oslo Accords or has every one forgotten President Clinton’s work already?

Friday Reads

Posted: May 20, 2011 | Author: | Filed under: abortion rights, Economy, Foreign Affairs, Israel, morning reads, Reproductive Rights, U.S. Economy, U.S. Politics | Tags: , , , , , , | 46 Comments

Good Morning!

It is definitely the silly season!  You can tell that an election count down is nearing in the District.  A judge of Chinese descent was successfully blocked by Republican Senators  and Ben NelSOB for sounding like a communist.  Did we go back to the McCarthy era and I missed it?

Six years ago, Ninth Circuit judicial nominee Goodwin Liu published an op-ed in which he made the utterly banal point that a conservative interest group used the terms “free enterprise,”‘ “private ownership of property,” and “limited government”  as “code words for an ideological agenda hostile to environmental, workplace, and consumer protections.” In a speech on the Senate floor yesterday, however, Sen. Chuck Grassley (R-IA) somehow managed to interpret this op-ed as proof that Liu wants to turn America into “Communist-run China”:

GRASSLEY: Does [Liu] think we’re the communist-run China? That the government runs everything? That it’s a better place when they put online every week a coal-fired plant to pollute the air, put more carbon dioxide into the air then we do in the United States, and where children are dying because food is poisoned, and consumers aren’t protected, and where every miner in the China coal mines is in jeopardy of losing their lives? That’s how out of place this guy is when he talks about “free enterprise,” “private ownership of property,” and “limited government” being something somehow bad, but if you get government more involved, like they do in China, it’s somehow a better place.

Republicans appear to be pulling out all the bells and dogwhistles for this one. This is the first time a judicial nominee has been blocked since 2005.

Liu also drew Republican ire over his criticism of Supreme Court Justice Samuel Alito in testimony when the conservative judge was nominated to the court.

“His outrageous attack on Judge Alito convinced me that Goodwin Liu is an ideologue,” South Carolina Sen. Lindsey Graham said before Thursday’s vote. “His statement showed he has nothing but disdain for those who disagree with him. Goodwin Liu should run for elected office, not serve as a judge.”

Imagine that!  Some one with an opinion!  Does that mean a person isn’t capable of honest judgement?

Obama gave a speech yesterday at the State Department indicating support for the Arab Spring and suggesting that a dialogue between Israel and Palestine is possible but must meet certain ground rules.  One of these is controversial because it breaks with a speech given by President Bush that more or less accepted the reality of some Israel colonies in the occupied territories.  That is that the negotiations be based on the 1967  agreement which would reverse Israeli colonization of territories that occurred after the agreement.  Israel has already rejected the idea.

So while the core issues of the conflict must be negotiated, the basis of those negotiations is clear:  a viable Palestine, a secure Israel.  The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine.  We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states.  The Palestinian people must have the right to govern themselves, and reach their full potential, in a sovereign and contiguous state.

As for security, every state has the right to self-defense, and Israel must be able to defend itself -– by itself -– against any threat.  Provisions must also be robust enough to prevent a resurgence of terrorism, to stop the infiltration of weapons, and to provide effective border security.  The full and phased withdrawal of Israeli military forces should be coordinated with the assumption of Palestinian security responsibility in a sovereign, non-militarized state.  And the duration of this transition period must be agreed, and the effectiveness of security arrangements must be demonstrated.

These principles provide a foundation for negotiations.  Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met.  I’m aware that these steps alone will not resolve the conflict, because two wrenching and emotional issues will remain:  the future of Jerusalem, and the fate of Palestinian refugees.  But moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair, and that respects the rights and aspirations of both Israelis and Palestinians.

Obama also made it clear that Hamas’ failure to recognize the state of Israel was a huge problem.

Now, let me say this:  Recognizing that negotiations need to begin with the issues of territory and security does not mean that it will be easy to come back to the table.  In particular, the recent announcement of an agreement between Fatah and Hamas raises profound and legitimate questions for Israel:  How can one negotiate with a party that has shown itself unwilling to recognize your right to exist?  And in the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.  Meanwhile, the United States, our Quartet partners, and the Arab states will need to continue every effort to get beyond the current impasse.

The President said that US commitment to Israel is unshakeable but the status quo is unsustainable.  The Israeli/Palestinian situation continues to the most vexing problem on the planet.  If you’re going to venture an opinion, be aware that the topic creates such tension that its discussion is actually banned on many blogs.  I’d prefer not to relive past experience myself but I thought it needed mentioning.

Lawrence Mishel of the Economic Policy Institute says “We’re not broke nor will we be”.  It seems more and more economists are fighting back on the weird suggestion that a country with a huge economy, rich people, and tons of assets can’t invest in its own future because it’s broke.  Here’s the link to the briefing paper.  This is good explanation of why we are not Greece and will not go down the Greek Road.  There are tons of nifty graphs so go check it out!!

Despite the rhetoric, it is clear that “we” as a nation are not broke. While the recession has led to job loss and shrinking incomes in recent years, the economy has produced substantial gains in average incomes and wealth over the last three decades, and economists agree that we can expect comparable growth over the next three decades as well. Between 1980 and 2010, income per capita grew 66.4%, and wealth per capita grew 73.2%. Over the next 30 years, per capita income is projected to grow by a comparable 60.6%. In other words, “we” are much richer as a nation than we used to be and can expect those riches to rise substantially in the future. So who is the we in the “we’re broke” mantra? The recession has certainly been a rough patch of road for many families, but the output produced by corporations in the private sector has already recovered to pre-recession levels, and these firms’ profi ts were 21.7% higher overall, driven largely by the 60% jump in pre-tax profi ts enjoyed by fi rms in the fi nancial sector.

Here’s why we can actually afford to invest in America and Americans!

Despite the fact that average incomes have increased substantially over the past 30 years, the federal government is currently running a projected defi cit of 9.8% of gross domestic product. As noted above, many use the deficit to support the “we’re broke” theme. But how can that be the case? How can the country have much more income, collectively, onwhich to draw, yet all levels of government are “broke” and unable to aff ord anything?

The answer is that revenue has declined substantially due to the recession and due to the Bush-era tax cuts. The Congressional Budget Offi ce projects federal revenues will be just 14.8% of GDP in the fi scal year ending September 30, 2011—by far the lowest revenue intake relative to GDP since 1951. In contrast, federal revenues totaled over 18% of GDP at the end of the last recovery (fi scal year 2007) and were roughly 20% at the end of the 1990s recovery. A largepart of the revenue shortfall can be attributed to legislated changes in taxes under George W. Bush, which lowered the revenue share by 2.1%.

As the economy recovers, the defi cit will fall as unemployment declines, as incomes and associated revenues increase, and as recession-sensitive expenditures automatically decline (expenditures for food stamps, unemployment benefits, Medicaid and other programs rise with the economic distress in a recession and fade as unemployment declines). This expected decrease in the defi cit is refl ected in CBO projections showing the defi cit declining from 9.8% of GDP in 2011 to just 3.0% in fi scal year 2015. Some of this decline can be attributed to the assumed expiration of the Bush tax cuts extended in 2010 and the inheritance tax change in 2010 (plus the R&D, ethanol, and fi rst-year depreciation tax breaks), which would total 2.9 percentage points of GDP that year. Even so, that still leaves the defi cit falling by 4.0 percentage points due to the recovery.

Texas officially joins the war on women by mandating sonograms before terminations.  This is just more harassment and costs to women seeking to exercise their constitutional rights to privacy and self-determination.  Ridiculous!

Texas Governor Rick Perry Thursday signed into law a measure requiring women seeking an abortion in the state to first get a sonogram.

Texas is one of several U.S. states with strong Republican legislative majorities proposing new restrictions on abortion this year. The Republican governor had designated the bill as an emergency legislative priority, putting it on a fast track.

Under the law, women will have to wait 24 hours after the sonogram before having an abortion, though the waiting time is two hours for those who live more than 100 miles from an abortion provider.

So, like I said, it’s the silly season which means there’s plenty of news out there that’s bound to upset people!  What’s on your reading and blogging list today?

The Latest Stupid Republican Tricks: The “Default Deniers”

Posted: May 19, 2011 | Author: | Filed under: China, Economy, Federal Budget, Foreign Affairs, Global Financial Crisis, Psychopaths in charge, Republican politics, Social Security, Surreality, U.S. Economy, U.S. Military, U.S. Politics, We are so F'd | Tags: , , , , , , | 9 Comments

GOP Leadership

{Sigh….} Is there any way to be rid of these crazies? The latest Republican nutty meme is that it will be much much better for all concerned if Congress doesn’t raise the debt ceiling and the U.S. has to either cut trillions in spending or default on its debts. From Politico:

They are the newest breed of government skeptics, the swelling ranks of Republicans who don’t believe the Obama administration when it says a failure to raise the debt limit will prove catastrophic.

And they stand ready to make negotiations over raising the cap on debt as grueling as possible, making Treasury officials and Wall Street more nervous than ever that the country could suffer an unprecedented default with consequences no one can predict.

The suspicion, which once flourished on only the conservative outskirts of economic circles, has seeped into the mainstream in recent weeks, gaining broader acceptance among establishment Republicans, even as the administration issues increasingly dire warnings.

House Speaker John Boehner (R-Ohio) validated the default deniers Sunday, saying, “I understand the doubts.” Jim Nussle, a budget director under former President George W. Bush, argued last week that “no one’s going to default” if Congress misses the Aug. 2 deadline. And Alabama Sen. Jeff Sessions, the top Republican on the Budget Committee, accused the White House of scare tactics similar to those used by the previous administration to win quick approval of the 2008 bank bailout after the markets crashed.

Via Think Progress, Rush Limbaugh yesterday responded to the Politico article by leaping aboard the GOP elephant just as it began to topple off the cliff. Limbaugh announced on his radio program that refusing to raise the debt ceiling will help the country’s credit rating.

LIMBAUGH: Today I claim the mantle. I proudly and honestly come to you today as the Mr. Big of the default deniers. We will not default on anything. And moreover, it is more likely that the country’s creditworthiness would go up around the world since we would finally be doing something to address our out-of-control spending and indebtedness if we were not to raise the debt limit. We would be perceived around the world as serious for a change, and responsible for a change. Otherwise we are headed for junk bond status.

I’m no economist, but according to Dakinikat Alan S. Blinder is a really good one, and he wrote an op-ed for the Wall Street Journal today. Here is his analysis of what could happen if the Republicans get their way on the debt ceiling.

What happens if we crash into the debt ceiling? Nobody really knows, but it’s not likely to be pretty. Inflows and outflows of cash to and from the Treasury jump around from day to day as bills are paid and revenues arrive. But at average fiscal 2011 rates, receipts cover only about 60% of expenditures. So if we hit the borrowing wall traveling at full speed, the U.S. government’s total outlays—a complex amalgam that includes everything from Social Security benefits to soldiers’ pay to interest on the national debt—will have to drop by about 40% immediately.

The bottom line is that Timmy Geithner will have to decide whether to pay soldiers and old folks or pay China other foreign creditors. I guess that’s what the Republicans are hoping for–that it will spell the end of the entire social safety net. But they don’t seem to be thinking very long-term. Do they really believe Americans will passively allow that to happen? Back to Blinder:

If and when the time comes, Mr. Geithner and his boss will have to decide. But here’s one prediction: Defaulting on the national debt will not be their first choice. After all, the statue of Alexander Hamilton at the Treasury entrance reminds Mr. Geithner every day of the importance of maintaining the nation’s creditworthiness. Even if we hit the debt ceiling, maturing obligations still can be rolled over. And I’ll bet he will bend every effort to make the interest payments, too. Unfortunately, however, when you’re 40% short, not much can be ruled out.

Exactly. Geithner is going to choose to pay China, not the elderly and disabled–that’s what the Republicans are counting on. But that will be a choice between chaos in the world economy and mass uprisings on the domestic front–or we might get both. According to Blinder a contraction in the U.S. economy like the one the Republicans are pushing us toward could lead to world-wide financial panic. According to Blinder:

…suppose the federal government actually does reduce its expenditures by 40% overnight. That translates to roughly $1.5 trillion at annual rates, or about 10% of GDP. That’s an enormous fiscal contraction for any economy to withstand, never mind one in a sluggish recovery with 9% unemployment. Even contemplating such a possibility is evidence of a dark, self-destructive impulse.

Second, markets now assign essentially zero probability to the U.S. losing its fiscal mind. They’d be caught flat-footed if the threat of default suddenly started to look real, possibly triggering a world-wide financial panic. Remember how markets reacted to the Lehman Brothers surprise? As Mr. Geithner pointed out in New York on Tuesday, “As we saw in the fall of 2008, when confidence turns, it can turn with brutal force and with a momentum that is very difficult and costly to arrest.”

And Blinder isn’t even considering what the reaction would be among ordinary Americans here at home when the economy completely tanks and there is no social safety net whatsoever.

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