Blog

The rhetoric surrounding the debt ceiling deal could only come from the “Funkytown” that is modern day Washington, D.C.

Speaker of the House John Boehner said late Sunday night:

“We got 98% of what we wanted”

A question for the Speaker:

Just who is WE?

With friends like these we sure don’t need enemies.

One of the Republicans’ major talking points is that “we’ve” changed the conversation in Washington, D.C.¹.

The two best ways of characterizing the conversation in Washington are given below, we’ll leave it up to readers regarding which style they prefer.

1) We need a little less conversation (actually a LOT less conversation)

2) You guys in “Funkytown” talk too much

The truth about Boehner’s 98%…

Apparently, Boehner is part of the “we” that wanted to give the power to the government to spend an additional $2.4 trillion without really cutting spending, to move any further debate on this topic past the next election, and to pin responsibility for the “deal” directly on the forehead of “tea partiers”. So that makes John Boehner part of the “we” that includes Barack Obama, et al.

HISTORIC INCREASE IN DEBT CEILING

$2.4 Trillion Would Be Largest Debt-Limit Increase in U.S. History

It’s not just an incomprehensible amount of money in terms of a single increase, it’s what happens to our debt to GDP ratio. “GDP refers to the market value of all final goods and services produced within a country in a given period” (usually a single year).

Debt to GDP ratio for a nation is similar to an individual’s debt to income ratio. Traditionally, debt to income ratios factor heavily in determining whether or not a person can obtain approval for a mortgage loan, with 36% being the outer limit. In other words, a person can only borrow up to 36% of their annual income.

IF the Senate passes the current debt limit increase bill just passed late this afternoon by the House, the U.S. will cross the 100% mark in debt to GDP ratio.

In fact, if one calculates the U.S. debt to GDP ratio using the latest figures from the Bureau of Economic Analysis for GDP ($15.0038 trillion² ), the existing debt limit figure ($14.294 trillion), and the amount of proposed increase ($2.4 trillion), the U.S. borrowing capacity would be approximately 113% of GDP.

NO REAL SPENDING CUTS

The language of the bill which was voted on by the House is inconsistent with representations of it made by media, most members of Congress, and other talking heads.

Texas Rep. Louie Gohmert, we think, explains the issue of “cuts” very well:

READDRESSING THE DEBT LIMIT IS THEORETICALLY MOVED BEYOND THE 2012 ELECTION

Emphasis on the theoretical here. The $2.4 trillion increase is PROJECTED to carry us through 2012. But, all of it is based on all kinds of assumptions that may or may not come to pass. They include the following:

Tax revenues will be as projected; this assumes the economy does not get any worse than current models state. Based on history, these projections are likely way off the mark, and in fact, the March 2011 model on which they are based has been revised downward.

No new spending will be instituted. Has there ever been a Congress that did not institute ANY new spending for over a year? New spending, is in fact, already being planned. Just one example is “the doc fix”. Under the health care reform law, Medicare reimbursement to physicians is supposed to be cut by 29% on or before January 2012. However, a CBO report indicates that President Obama is already proposing what is commonly called the “doc fix”, which like other previous such fixes, would continue reimbursements at 2011 levels, rather than cutting them by 29%. Therefore, of course, this is spending not calculated in the projections.

TEA PARTY IS RESPONSIBLE

As of this moment, apparently, “the tea party” IS now GOP Congressmen who say they are members of the tea party or are members of the “Tea Party Caucus”. “Tea Party” according to this logic, is the “extreme” right-wing contingent who have all at once made a lot of trouble in debt deal negotiations and are responsible for the outstanding accomplishment wherein “we got 98% of what we wanted”.

There are a flurry of news stories portraying the debt ceiling debacle as a “Tea Party victory”…

From the Wall Street Journal’s Editorial Board:

“A Tea Party Triumph: The debt deal is a rare bipartisan victory for the forces of smaller government”

“How the Tea Party Won the Deal: Tea Partiers wrested a debt deal of huge cuts and no revenue hikes because there’s no parallel left-wing grassroots wave, and no need to bargain over a war on terror, says Peter Beinart.”

“The Tea Party’s Debt Triumph: After months of wrangling and political theater, the debt deal party leaders finally thrashed out represents a clear victory for Tea Partiers—who still may not vote for it.”

“How the Tea Party Hobbits Won the Debt Fight”

But incoherent D.C. really needs to make up its mind.  Last week, the Wall Street Journal’s editorial board who now praise the debt ceiling bill as a “tea party triumph” last week attacked “the tea party”, labeling them as hobbits. And of course, “the maverick” John McCain, pounced, and read the whole thing on the Senate floor (Does anyone else believe McCain ever heard of a hobbit before that day?).

But of course, what establishment, career politician GOPers say is never to be outdone by the even more absurd “farther left”, who have portrayed “tea partiers” with even more extreme rhetoric:

“Sources: Biden Likens Tea Partiers to Terrorists”

While Biden and company engage in their hyperbolic attacks on “the tea party”, the farther left got almost exactly what they wanted out of this debacle. These verbal bombs only help persuade reluctant Republicans to vote for the mess, because, if my opponents like it, it must be good.

We believe that references to the classic Tolkein tome, Lord of the Rings, are way off the mark. We think the whole morass is much more aptly portrayed in the classic Br’er Rabbit and the Briar Patch, “[a]n old tale of psychological manipulation translated into modern English”.

Noting that “Funkytown” is within hours of raising our debt capacity to a level exceeding 100% of our annual GDP, it seems to us that the Progressives (Democrats and GOPers) who favored increasing the debt ceiling are like Br’er Rabbit and self-described fiscally conservative Republicans who voted (or will vote) for the mess are as foolish Br’er Fox.

As one summary notes about the classic fairy tale…

“Whatever you do,” cried Brer Rabbit, “Don’t throw me into the briar patch”, or how to get recalcitrant idiots to do what you want.

So, while “the tea party” (whatever that might be at this point), may be poised to take credit or condemnation for the debt debacle, the overarching point is, that Americans will have more to do in dealing with the bigger messes to come than simply picking a few metaphorical briars out of their backsides.

Br’er Rabbit and the Briar Patch image from Liberty and In-dependence

Some interesting headlines seen on the Drudge Report:

“White House takes victory lap”

“Obama 2012: Debate Over”