Tuesday, August 2, 2011

Debt Limit Drama

They had us, didn't they? It was griping, dramatic, emotional, and the shocking conclusion left us feeling much like the series finale of Alf. Do you remember that? No of course not, I was one of the 11 viewers who tuned in for that television event. I had to see how the writers could bring a show as asinine as Alf to anything resembling a logical conclusion. The answer is they couldn't and it ended with, 
“To be continued…” 
I kid you not, and that is how the debt limit deal ended as well. There was no genius 11th hour catharsis, no remarkable turn of events that set us down the road to a bright or even sane fiscal future, and nothing to demonstrate that “The Tea Party” remains a force to be reckoned with. What we got was “To be continued…” and when the next debt limit ceiling looms near, it will terminate in yet another capitulation to the lure of reckless spending. This “compromise” could have been cut weeks ago. What was the point of running the budget cutting football all the way to the one yard line on fourth down only to take a knee and surrender the game?  The drama? The photo ops? The lack of any useful work to perform?
Regardless of how you analyze this play by the Republicans, the final score read:
Conservatives: 0           
Liberals: 2,400,000,000,000
Sure, there is the estimated $917 billion in initial "cuts", which in fact are reductions in spending increases.  There is an additional $1.5 trillion to be carved from the bloated budget later. However, both of these adjustments will be implemented by the same pack melodramatic miscreants on a bi-polar spending spree who created the 14 trillion dollar national debt that precipitated this Stand-off Showdown in the first place. Create the beast, then play the white knight coming to slay the beast, mount your trusty stead and charge! charge! charge another two and a half trillion bucks.
Somehow this scenario seems strikingly familiar, doesn’t it? Of course, we have been the victim of these creative government financing arraignments repeatedly for the past 75 years. It was 1936 when the first Balanced Budget Amendment, House Joint Resolution 579, was introduced by Harold Knutson (R–MN) and summarily executed in Congress. Mr. Knutson must have appeared a serious killjoy that early in the game with only 16 Billion in public debt to be concerned about. Today the government will spend 16 billion dollars before noon tomorrow, and 6 Billion of that will have to be borrowed!
I must admit my disappointment the Tea Party is shared with the Obama Dream Team. I expected more from the "Smartest People on the Planet" as they were touted in the opening days of the Administration. With the large number of former Goldman Sachs executives in the Obama administration, I'm dismayed that they couldn't structure a magnificently pitched, highly leveraged, poorly labeled, and remarkably incomprehensible market security out of the national debt. Current debt could be exchanged for unsecured equity.  When this house (and senate) of cards comes crashing down, the US stock price drops to zero, and the stockholders (China, Saudi Arabia, and anyone else but us) get screwed instead of our children! I suppose that only works for investment banks, insurance companies, labor unions, and other major campaign contributing types.
Inevitably the results of the hundreds of similar  compromises in the past have yielded tax increases which materialize in multiples of the original figures and spending cuts which disintegrate in to the ether. Year after year the deficit recorded on the bottom line will grow inexorably and the National Debt will deepen exponentially. The chance of the horrific "default" will engulf the Treasury and become a mater of inevitability. The American Dream and our children's futures pass into history. The same Esteemed Members of our Distinguished Congress who produced this grand "compromise" will hastily resolve to retire internationally in a tropical land with no extradition treaty.
I hope you don't think I am being entirely cynical, because I'm really not completely pessimistic on the future. I'm sure our children will look back on this debt limit hullabaloo some day and laugh about our fuss and bother over the matter. They will have more pressing concerns to attend to as they huddle together for warmth against the freezing wind in the dirty alleyways they will call home.