So, here we are, already at our borrowing limit and living on borrowed time as the Federal Reserve shuffles money around, to temporarily keep us from defaulting on our obligations. The Republicans still think that this is a good thing to play politics with. While I have some belief (e.g. faith without any proof) that they will not take us over that cliff because Wall St and the people that fund them understand how bad it would be, I am still a little worried,.
One thing I am worried about is that the Dems might cave on this. That would be really bad as it would just encourage hostage taking like this in the future; as well as the fact that whatever cuts the Republicans demand would hurt the economy as a whole and lots and lots of real people in the very short term.
Still we see it being played out. Talking Points Memo has a story tonight where Rep. Paul “I want to kill Medicaid” Ryan is saying, against evidence of many business groups saying the opposite that “The Wall St I know is totally okay debt default fore a few days” Here lets let the Medicaid Massacre Maestro tell you in his own words, from the TMP article:
Ryan told the network that he talks to “lots of bond traders” and “lots of economists” and they all say that investors are willing to put up with a default of “a day or two or three or four” if it produced massive budget changes as part of a Capitol Hill debt limit deal.
“They all say, ‘whatever you do, make sure you get real spending cuts,’” Ryan said. “Because you want to make sure that the bond-holder has the confidence that the government’s going to be able to pay them. You’re putting the government in a better position to pay them.”
What the Rep of Very Little Brain seems to fail to understand is that an actual default, or even showing signs that we would actually do something like that could ruin the credit of the United States for a very long time. Worst case scenario, after the collapse of the world credit markets, the world decides that A) it is not going to use dollars as the default currency anymore and B) that never again will US Treasury bonds be a stone cold safe investment.
I do love how he does not quote anyone specifically. He says “lots of economists” agree with him. I’d be happier if he named just one who was willing to stand up and say what he is saying. It still would be a minority voice in the great preponderance of opinion but it would at least be someone.
Which brings me to a question that I’ve been mulling around. One of the reasons that the Tea Party Republicans are so willing to let this happen is not that they don’t think we’ll default, but that they don’t believe the what the experts are telling them about the consequences of that default.
This is the kind of the logical end to the Rights war on expertise. They have so degraded the value of specific study in an area that now, when it is important to understand a fact that is counter to the way they wish the world to be, they are completely unwilling to accept expertise.
We’ve seen this with other issues, climate change being the biggie, but it is the issue of economics and world credit markets that has them completely baffled. Unfortunately the inability to process new information from outside their ideology has become so strong that there is a real possibility that the Tea Party Republicans will play chicken with our national credit. It would be bad enough if it were just our nation, but the US Treasury bond is the backbone the world’s credit and monetary body. These morons think they are playing operation, while what they are really doing is playing for keeps.
What is on your minds tonight Firedogs? The floor is yours!