Tuesday, January 15, 2013

What The Debt Ceiling Debate Is Really About

Bill,

If the Republicans in the House really want to reign in spending all they have to do is vote to do so. They can cut Medicare (a choice opposed by 70% of Americans) or Social Security (opposed by an equal number). But they won't do that because they know they won't get reelected if they do. The Democrats, perhaps even worse,  are perfectly happy to pretend that there is no problem with the debt at all -just ask my friend on the left Professor Krugman When the debt no longer becomes sustainable, they will squeeze the rich (that's us) or just inflate the debt away.

David Brooks expresses this reality far better than I can


 "Ultimately, we should blame the American voters. The average Medicare couple pays $109,000 into the program and gets $343,000 in benefits out, according to the Urban Institute. This is $234,000 in free money. Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren. They have decided they like borrowing up to $1 trillion a year for tax credits, disability payments, defense contracts and the rest. They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living. They have made it clear that they will destroy any politician who tries to stop them from cost-shifting in this way.

Most members of Congress are responding efficiently to the popular will. A large number of reactionary Democrats reject any measure to touch Medicare or other entitlement programs. A large number of impotent Republicans talk about reducing the debt, but are incapable of forging a deal that balances tax increases with spending cuts.        


So the debt ceiling nonsense is simply a way for each side to see if they can blame the other when both are collaborating efficiently at giving the American people exactly what they want.

Eli

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