Would You Kidnappers Please Make Up Your Minds?

Extortion noun  the practice of obtaining something, esp. money, through force or threats.

House Republicans, having balked at paying for what Congress previously authorized to be spent and threatening for the first time in two centuries not to stand behind our nations debts, are making a hash out of something they have little experience in, that is to say, legislative governance by extortion. We can tell this because they have been consistently inconsistent.  Back in 2011 they brokered the sequester, something to his great regret the president agreed to.  The result was the meat-axe approach to budgeting.

Shall we review the record?

At first they wanted a whole laundry list of things:

Approval of the Keystone pipeline.
Looser limits on carbon emissions.
Tort reform.
Partial defunding of the finance reform law.
Defund entirely the Affordable Care Act (with no replacement suggested).

That didn’t go over all that well, especially the part about gutting the ACA which was fairly passed by Congress, signed and approved by the president, reviewed and approved by the Supreme Court, and affirmed by a solid majority of the citizenry as a central issue in a presidential election. When those demands failed to produce results they switched to piecemeal legislation to restart the more visible parts of the shutdown, including certain national parks, air controllers who by their absence were inconveniencing, uh, them, and, ineptly, the military who are still fighting a war.  Oh, and they wanted repeal of the medical devices tax.  Result?  Paying federal workers not to work.

Result?  Paying federal workers not to work.  (Wait, isn’t that what conservatives hate about welfare?)

Not content with releasing hostages a few at a time, the GOP now seems intent on broader demands such as entitlement cuts and tax reform, all the while complaining that the president refuses to “negotiate” and set a precedent that would hamstring the executive branch for the foreseeable future and leave no settled law secure from future extortion.

credit:  encyclopedia.wikia.com

credit: encyclopedia.wikia.com

The president has proclaimed he is ready to discuss everything, but not under threat of extortion. The votes are clearly there in the House to support a clean CR, but it is the GOP, not the president who won’t negotiate. If they don’t get what they want, they will kill the economy and some in the Tea Party seem almost gleeful at the prospect.

In a way it’s something of a relief that they aren’t better at what they’re doing.

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About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Independent, tending progressive as the GOP recedes from its Eisenhower roots.
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20 Responses to Would You Kidnappers Please Make Up Your Minds?

  1. PiedType says:

    They’re going to “allow” some states to pay to reopen their national parks. Isn’t that thoughtful. More like “forcing” us to pay. For something we’ve already paid for (in taxes). And here in Colorado we’re paying to keep federal workers on the job rebuilding roads and helping with flood relief. Again, something our taxes already pay for. Enough!! I’m ready to kick every one of them to the curb.

  2. aFrankAngle says:

    Somehow, that group loves to spin the current polls into there favor …. which is real magic!

  3. ansonburlingame says:

    I (the President) will not sit at a table to negotiate untill you give me all the money I asked for, a “clean” increase in borrowing money.

    Threats, force on the part of WHO, exactly, I wonder. BOTH sides are jerks and acting like school boys. You threaten ME and MY program and I will stay at home and not even talk to you until you give me everything I demand, period!!!

    Anson

    • Jim Wheeler says:

      I (the President) will not sit at a table to negotiate untill you give me all the money I asked for, .. .

      No, Anson, you’ve got the picture wrong. Try this analogy. Mom and Dad agree together on what to spend money on, but Mom controls the checkbook. The money was spent accordingly but now Mom is refusing to write the check.

  4. ansonburlingame says:

    Oh com’on, Jim. If Mom has to borrow the money to write the checks, Dad has to cosign the note!! He refuses to do so for his own and maybe good reasons. OMG, then Mom has to prioritize how to spend the money available!!!

    Anson

    • Jim Wheeler says:

      Yeah, you’re right, Anson. I fell into my own trap of comparing government finance to that of family. It’s not the same. Every nation on earth that I know of operates on debt and what the kerfuffle in Washington is not about whether to operate by management of debt but about how much is too much while trying to maintain a struggling economy. My bad.

  5. ansonburlingame says:

    The ultimate reason nations “live on debt” is historically because of wars. Just look at our own 237 or so years. But after wars are fought, nations try to return to normal and pay off most of such debt.

    But I know of no successful nation that has sustained “normal life” with huge debt. Just watch as Europe continues to fund “normal” programs with huge debt. Europe will ultimately return back to the Europe of old with each country trying to out do the other one.

    Sweden and most other European countries can sustain “normal life” with huge expenditures as they, Sweden never try to militarily defend themselves and their ideals. Can America do that, interanlly and externally? Eliminate the DOD and America suddenly and for a short while functions without onnerous debt. Simple as that. But just try it and see how long America lasts in a world, any world. It sure won’t be the America we all have lived within for a long time.

    But your analogy within a family stikes home, at least to me. Dad wants to be without onnerous debt and Mom wants to still get face massages every month and go on “trips” all the time!!

    Anson

    • Jim Wheeler says:

      Anson, your arguments don’t hold water. You said,

      But I know of no successful nation that has sustained “normal life” with huge debt. Just watch as Europe continues to fund “normal” programs with huge debt. Europe will ultimately return back to the Europe of old with each country trying to out do the other one.

      The national debt of the U.S. in 2012, according to its Wikipedia page, was 74% of GDP. This is less than that of certain other first-world countries:

      214% Japan
      81% Germany
      90% France
      84% Canada

      On the other hand, there’s a bunch of countries that have much less debt than we do:

      32% China
      52% India
      55% Brazil
      35% Mexico
      40% Turkey

      So, where’s the correlation? There isn’t one. You and the Tea Party think 74% is Armageddon, but it isn’t. The sky is not falling, the end is not near, or at least it wasn’t until Ted Cruz and his buddies decided not to pay our proper bills. Also, the stats show that wars are not at all the ultimate reason nations live on debt as you claim. They do it mainly to achieve government stability despite economic cycles. That’s the principal reason the family analogy fails – nations are not families and most economists today accept Keynesian economics as the way it works.

  6. ansonburlingame says:

    And thus we go back to arguing the numbers, not the actual conditions in a society. Our current GDP is around $15.7 Trillion and our national debt is close to and soon to go over $17 Trillion. There is a huge difference between 74% debt to GDP and over 100% debt to GDP. And when one adds in the unfunded liabilities for the future we see debt to GDP rations going literally out of sight.

    We spend far more money than we can afford to spend as a nation and the situation is getting worse and worse each year with no end in sight. That is the fundamental issue before Congress and we the people and arguing where the decimal points go or how to add up only selected numbers, leaving others unaccounted for, is just politics, excuse making and hiding our collective heads in the sand.

    Go back about two years ago where I used the government’s own financial report from 2011 showing a debt to GPD ration over 100% at that time. We’ve had this disagreements before, over the numbers, and we still disagree how bad the situation actually might be, in reality, not just political financial maneuvering. We can have the same disagreement over unemployment where I choose to use the much larger figure of non-intitutionalized citizens over 16 years of age and compare that to the actually employed numbers. That is a reflection of who is actually working to support themselves rather than relying on “others” to support them.

    But I leave this argument now as convincing you of any validity is impossible. I made my respective points and won’t restate them. You as well will default to accusing me of another strawman tactic. Well my strawman is very fundamental and usually the basis for most economic disagreements with progressives. We spend too much money each year and must stop doing so, period.

    Anson

    • Jim Wheeler says:

      The data for public debt as a percent of GDP in my previous comment come from The CIA World Factbook, 2013.

    • Jeff says:

      But when did the debt start? We went from 120% of GDP debt in 1945 down to below 30% of GDP in 1980, then started to rocket back up in 1980. Moreover, every single Democrat president since WWII has decreased the deficit as a percentage of GDP (with the possible exception of Jimmy Carter) and every single Republican president has increased the deficit as a percentage of GDP.

      It is not really about spending. The biggest impact to the national deficit picture has been tax breaks for the wealthy. Unfortunately for the conservative argument, the tax breaks on the wealthy did not increase growth as expected, but actually slowed it. If you were to ask economists before 1980 whether tax breaks for the wealthy would increase economic growth or decrease it compared with spending the money on public infrastructure, then I am sure that you would have had some arguing that the public infrastructure would feed growth more and some arguing that the tax breaks would help most. However if you had asked the economists whether the public spending would help more or whether the tax breaks while spending the money anyway and financing it all with debt would grow more, they might say there would be a price to pay when you had to pay the debt down, but I am betting almost none would have predicted what actually happened – financing tax reductions with printed money – would have slowed growth.

      Of course there are a lot of people who don’t realize that growth slowed for at least 3 reasons. 1) There has been a massive PR campaign sponsored by wealthy people stating that tax breaks for wealthy people help the economy, 2) In any economy, people make far more money in their 40s than in their 20s and the correct comparison is impossible to make from personal experience (except by noting that we went from 2+ household incomes in the early 1900s to 1 income families post WWII, and back to 2 income families when unions died and Reaganomics won), and 3) We stopped seeing wage growth to keep up with productivity increases (we no longer got paid more for making more), but we replaced part of that lost income with asset-based income as stock P/E’s, real estate Price/Rents, bonds Price/Coupons (bond prices inverse of interest rates) all headed simultaneously headed for the sky (less spending money for consumption combined with more spending money for investments can have only one effect if you believe in supply and demand). Stock and real estate income both provide a cocaine rush that normal income doesn’t, so it is easy to make people believe they are getting more than they think they are when they “win” it.

      The solution, of course, is to take steps to decrease wealth inequality and other imbalances (trade deficit surge, prison population surge, etc.) that have occurred starting around 1980 (1970 on the unions side of things).

  7. ansonburlingame says:

    Jim,

    We cannot even agree on a simple number, the ratio of debt to GDP.

    I went to Wikipedia just now and say the “CiA Factbook” latest number for GDP It was $15.680 Trillion. Last night I saw a “debt clock” ticking up to just under $17 Trillion, just last night on national TV. Call it $16.980 Trillion. Divide Debt by GDP and the result is 108.29%.

    I watched an old Obama campaign speech from 2008 criticizing Bush II for a debt of $9 Trillion in 2008, several months before he (Obama) took office.

    Now add up all the deficits since that time and one does NOT come up with $11 Trillion in national debt. It is about $17 Trillion, using the same methodology used by Obama in his 2008 Presidential campaign. Take the debt, the real and total national debt, add all the deficits since that point in time and get the results. Doing so, I continue to submit that our debt to GDP ratio is now over 100% and getting bigger to the tune of some $600-$700 Billion, now, each year for the forseeable future in Presidential budget submissions.

    And you think that is “good” or even acceptable Of course you don’t as anyone with any sense should admit that a debt to GDP over 100% for anyone is crazy and cannot be sustained. That ratio MUST come down, far down in my view. Yet there is NO PLAN to do so, by anyone, realistically. Instead the play with the numbers to say “Nothing to worry about!” like any politician usually does unless they are campaigning against another politician or a local pundit supporting one party over the other, using math that I just don’t understand or believe. And I took a full semester course in college last year so I could figure out the real numbers, myself!!

    Anson

    • Jim Wheeler says:

      What you are carping about, Anson, is the age-old controversy of Keynesian economics, something most economists have accepted. What the GOP has been pushing on the other hand is austerity economics, a la Hayek. I think austerity would put us right back in recession.

      I have no argument that the nation needs a sensible budget. The president has been saying that for many months and I expect to see him now try to engage House leaders on that. Let’s see if they’re up to that without yelling to defund the healthcare law without anything to replace it.

    • Jeff says:

      The important thing to look at is not total debt, but rather deficit. Obama is the only president since WWII other than Clinton to bring the deficit down not just as a percentage, but in actual dollars. If the deficit is smaller than GDP growth, then you can decrease the debt as a percentage of GDP just by waiting it out, just like we did from 1945-1980.

      If we simply bring back the higher rates of GDP growth that we had under FDR’s government, then the deficit would shrink quickly as a percentage, and we know the recipe for that – heavy public investment in the technologies of the future, increased wage bargaining power among employees, a moderate set of tariffs that will restore trade balance and our ability to tax even the largest corporations (thus helping our small businesses in two separate ways), and limitations on corporate power by reversing citizen’s united, eliminating corporate lobbying and election funding, removing the revolving doors, and public financing for elections.

      By the way, a lot of the statistics I use come from “Unequal Democracy” by Larry Bartels. It is commonly known that Republicans like the rich more than they like the poor, but one surprising bit of data the book provides is, if you base your cutoff by the effects of their policies since WWII, then Republicans draw the line between rich and poor in the neighborhood of 200,000 a year income.

      • Jim Wheeler says:

        Many thanks, Jeff, for your cogent observations on fiscal matters. You are right and it is refreshing to know someone understands. One statement you made bears repeating for those whose eyes glaze over at the mention of economics:

        The important thing to look at is not total debt, but rather deficit. Obama is the only president since WWII other than Clinton to bring the deficit down not just as a percentage, but in actual dollars.

        Unfortunately, I suspect the reading public is a long way from understanding the fundamentals. How many, I wonder, even understand the difference between “budget deficit” and “national debt”? The honorable and laudable Gene Lyons attempted to clarify such matters in a column this morning. I wish him all the luck in the world.

        • ansonburlingame says:

          Jeff is showing another part of the discussion about debt, deficits and growth in GDP. But in my view one must be very careful just using GDP which can show “growth” simply due to inflation alone. I much prefer to consider “Real GDP” which I had never heard of until taking a course in economics last year. Real GDP shows growth in production, forget inflationary pressures.

          Take for example the iPhone a brand new “thing”. When Steve Jobs sold the first iPhone and others followed, that was REAL growth, in my view. Money was made on a brand new “thing”. Had inflation been zero and all other products made and sold by America been held constant, the growth in GDP caused by the sale of iPhones would have been REAL changes in GDP.

          If one looks at growing GDP as the way out of our current economic conditions then I suggest that inflationary contributions to GDP growth, the major contribution to such growth since 2009 in America only reflect devaluation of the dollar. If GDP goes up by 2% but I must also pay 5% more for a loaf of bread, well that ain’t growth for me, for sure.

          So for Jeff, if he is still watching this exchange, if we trivialize debt through inflationary growth then I agree that $17 Trillion is not all that much of a big deal. But what will it cost to by a loaf of bread in 50 years when $Trillions in debt becomes a so what?

          Anson

  8. ansonburlingame says:

    Great, you agree we need a “sensible budget”!!! So do I. Now let’s go get one.

    Do we add up all the “needs” to reach that figure, or do we set a figure and go achieve it?

    I submit that “Congress” or the President cannot add up all the “needs”. Bureaucrats have to do that for them. And left unconstrained, well guess what numbers you will get back from bureaucrats, primarily. Even tell the bureaucrats to cut last years numbers by 10%, or 5%, or 1% and guess what you will get back from them.

    You already know, from a private email, a book I am reading about the history of nuclear weapons decisions. After Sputnik went up (you were at USNA and I still in High School when that happened in 1957) and recall the Democratic outrage over the “missile gap” and all the politics and rancor over such a nuclears war related number. Turns out an “intelligence failure” caused a gross overestimate of ICBMs held by the Soviets. Yet JFK made HUGE decisions using those figures provided. Hell the “:missile gap” concern was a primary element of his presidential campaign in 1960.

    I submit that the debt to GDP ratio is an important factor to consider, at the “macro level” to make spending, revenue and borrowing decisions at a high level. Yet you say the figure is 74% and I say it is around 108%. If we cannot resolve that dispute then we will NEVER resolve the need or lack thereof to reduce spending, OR raise taxes, OR do both at the same time. Welcome to American financial politics today!!

    For sure I am not arguing Keynesian vs classical economics in this exchange. I am arguing the need for a better budget, one that considers debt and GDP considerations. The solution is obvious at the macro level. We need to spend less and tax more. NO politician will call for significant tax hikes. All we hear is “just a little more from …..” kind of stuff. You KNOW that won’t work to just balance Medicare alone, much less pile on ACA, etc. for HC. If in fact we NEED Medicare then we SHOULD be taxing everyone a helluva lot more to get it.

    GOP in turn says cut Medicare and Democrats scream “need related” rebutals. NO ONE calls for increasing Medicare premiums, etc.. Very few even call for increasing (removing) the Medicare cap on wages for taxation purposes. Just add up all the medicare withholding and premiums paid by you and Molly and compare that to the Medicare payments for both of you since you turned 65. If you are like me the differences are astounding in the payments being much larger that anything I ever paid into the system.

    If there are 50 million people ;like you and me on Medicare today, I wonder what the difference (see above) is for all of them. My guess, and it is only a guess, is that probably 40 million of “us” have big differences, payments far above contributions. Should that not be fixed for future Medicare issues, just Medicare alone.

    Why do you think HC premiumns under ACA are going through the roof now? I suppose you would argue they are NOT going through the roof and ACA is becoming a great deal for all Americans now. Well who is correct is such a financial calculation, not a political one?

    Watch Fox News or MSNBC and you will get two different answers. Listen to Ted Cruz or Obama and you also get two different answers. Hmmmm? How are such differences resolved (like the old missile gap numbers)? They aren’t becomes the answer and today we stalemate at the highest levels.

    You and Duane call essentially for a one party government to resolve the situation. I call for better numbers, real and honest numbers to make apolitical choices, financially. But that won’t work today, in DC or this local exchange in a blog!!

    Anson

    Anson

  9. Yeah, I know I’m late to the party. For my 2 cents’ worth, all I could see was Ted Cruz playing the sheriff in “Blazing Saddles”. You know, threatening to shoot himself if anybody tried to shoot him? (Yeah, the analogy doesn’t track well, but at least it’s a reason to laugh. God knows these idiots have me screaming at my TV far more often than I like to! ;) )

  10. ansonburlingame says:

    I agree John, that Ted Cruz only spoke to or for the radical elements of the Tea Party, not all conservatives by any stretch. Unfortunately, when someone like Cruz launches a campaign of sorts progressives attack anyone that is not a “god fearing progressive” ready to spend, spend, spend for needs, needs, needs.

    Progressives want all the HC imaginable for all Americans. While they rant against private insurance companies they actually call for such companies to spend more money while not raising rates. Good luck! So when that doesn’t work, well let government take it over and STILL spend all the money needed to provide all the HC demanded. When that doesn’t work either, as government doesn’t have the money to do so either, well the government can always just pay HC providers less, much less. When that doesn’t work, because we won’t have enought HC providers working for government wages, then government can always ration that which it provides. But then we the people rise is anger, over government rationing. When that doesn’t work, well we change people in government and repeat the whole cycle all over again, hopefully without an intervening revolution.

    But at least the revolution will be “easy” as we will have sequestered the forces needed to “protect and defend” against progressives calling for a revolution or Ted Cruz calling for death to progressives!!

    And by and large we are doing all of that to keep people my age alive a little longer, at any cost. If I thought it would do any good I would volunteer to use an inexpensive (relatively) bottle of pills to save some money.

    Anson

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