THEY THINK VOTERS ARE STUPID! Congressman Fleming: Don’t Listen To Economists On Debt Ceiling

What's the "DEBT CEILING" or "Debt Limit"?  

The debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments. The debt limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congresses and presidents of both parties have made in the past.   

Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an unprecedented event in American history. That would precipitate another financial crisis and threaten the jobs and savings of everyday Americans – putting the United States right back in a deep economic hole, just as the country is recovering from the recent recession. 

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More importantly, if one wants to point fingers, since 1960; the Republicans lose since they have adjusted the debt ceiling more than democrats.  These figures come from the U.S. Treasury:  Congress has always acted when called upon to raise the debt limit. Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents.  

The story below indicates how out of touch with reality Congress is:

 

When it comes to paying the nation’s debts on time, Rep. John Fleming (R-LA) prefers to trust his gut rather than heed the unanimous warnings of professional economists. “Economists, what have they been doing?” the three-term congressman said in the New York Times on Friday. “They make all sorts of predictions.”

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“Many times they’re wrong, so I don’t think we should run government based on economists’ predictions,” Fleming added.

If enough Republicans share in Fleming’s denial of the blunt economic reality that a first-ever failure to fulfill spending commitments Congress has already made would be catastrophic for America’s finances and economic growth, they could induce a new recession. Several of the most prominent anti-spending extremists in Fleming’s party have acknowledged that fact in the past, including Sen. Pat Toomey (R-PA), Rep. Paul Ryan (R-WI), and leadership officials like Speaker John Boehner (R-OH) and his deputy Rep. Kevin McCarthy (R-CA).

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The first time that Fleming’s mindset gained real traction within the GOP was in the summer of 2011. The resulting brinkmanship around the debt ceiling caused real economic harm even without an actual breach of the debt ceiling. Conservatives frequently warn that economic uncertainty is damaging when they argue against higher taxes on top earners or regulations of just about any kind, but Fleming and his fellow debt ceiling deniers seem blind to the spike in uncertainty they caused two summers ago. On top of that paralyzing jump in economic doubts, the 2011 episode produced the first-ever downgrade of U.S. debt by a major credit ratings agency. Standard & Poor’s was unequivocal in blaming its downgrade of America’s credit rating on the unprecedented political paralysis around something that had been routine and nonpartisan throughout the country’s history. The downgrade cost the country roughly a million jobs.

Raising the debt ceiling does not raise the national debt, but fighting over it does. The perverse outcome of the GOP’s 2011 fight over the ceiling was a nearly $19 billion increase in costs to taxpayers over the coming years due to increased borrowing costs stemming from the credit downgrade. Over the 50 years prior to 2011, the cap on borrowing had been raised nearly 80 separate times as necessary to allow the government to continue paying its debts. Nineteen of those hikes came with George W. Bush in the White House. Republican leaders broke that trend and deemed the country’s financial credibility and economic health “a hostage worth ransoming.” But while the GOP negotiating position inherently acknowledges that the debt ceiling must rise, the denial of economic fact promoted by Fleming and other ultra-conservatives seems to have boxed Boehner in politically. He reportedly proposes to force a default unless President Obama adopts the Republican position on essentially every issue.

BY ALAN PYKE

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