Standard & Very, Very Poor

Over the weekend, and into today, there has been much sound and fury about Standard and Poor's downgrade of the United States' credit rating to AA.  Unfortunately for S&P (or fortunately for the rest of us), it turns out that it is signifying nothing.  It is now left to the rest of us to wonder: what is happening here, what does it mean for us, and what does it mean for S&P?

Where Do We Go From Here?

The title asks a question, so here is a picture of The Question.

The last few weeks have, with good reason, worried liberals and others.  Once again, we have seen the only political party that even attempts to speak for any of our concerns fail horribly.  The debt ceiling debate was an inherently winnable policy fight on a number of different grounds.  While the ultimate deal (as we noted in its aftermath) is better than we could expect considering how badly the Democratic leadership failed, it still amounts to a loss in terms of the debate.  It legitimizes Republican bad economics.  It legitimizes "austerity".  None of this is particularly good.

Given all that, it's worth taking a moment to figure out how the Democratic Party can recover strategically from this sort of a failure.  It's a good question.  Fortunately, there are answers.

Our Long National Nightmare Is Finally Over

It appears to be the beginning of the end for this round of debt ceiling talks.  The House has now passed a plan, and the Senate should shortly do the same.  This bill will presumably be signed by President Obama as well.  Finally, we can stop dealing with this stupid, stupid manufactured crisis and move on to other things.  So the real question is: what's in this (hopefully final) deal, and what does it mean?  It seems to me that while this deal is bad, it's...somewhat less bad than it could or should have been.

From: A Concerned Student To: Speaker Boehner

A College Student's Letter to Rep. Boehner

(This is a letter from http://anonitiger.blogspot.com/ and has been posted to this blog with permission from the author)

Dear Rep. Boehner (or rather the unfortunate intern who must first read this…),

            I am not a member of the 8^th district of Ohio, but I do reside only a few hundred yards south of I-275 and the line that divides your district from that of Rep. Chabot’s. Many of my closest friends and relatives are members of your district and voting constituents who are deeply concerned with the debt ceiling issue that is currently playing out on Capitol Hill.  In writing this letter, I hope to voice their concerns and offer you a rational argument to resolve our current crisis.   Moreover, I am providing you with a warning of what will happen to you if you refuse to listen to my reason.

I Have To Talk About the Debt Ceiling Again, Don't I

And yet, unfortunately, this is more than likely not even close to the end:

House Republicans on Friday narrowly approved legislation authorizing a limited increase in the $14.3 trillion debt limit in exchange for more than $900 billion in spending cuts.  The 218-210 vote occurred nearly a full day after it was originally scheduled as Speaker John Boehner (R-Ohio) agreed to revise the legislation to win enough conservative support to carry the House.

14th Amendment Remedy?

There are only six days to go until the United States government (voluntarily) defaults on its debt obligations. As this deadline grows nearer it seems that a bi-partisan solution to solve this self induced crisis is no closer than it was a week or two ago. Washington D.C. still finds itself at an impasse despite weeks of budget talks led by Vice President Biden, negotiations between Speaker of the House John Boehner (R-OH) and President Obama, the McConnell Plan, the Gang of Six bipartisan Senate plan, the House Republican Cut, Cap, and Balance Bill, the new Boehner plan, and the Reid plan.

Lost Transcript of Rep. Boehner's Actual Speech

Good evening.  I’m John Boehner, and you may remember me as the most orange man in America.  I serve as Speaker of the whole House – of the members of both parties that you elect – but I try to pretend the Democratic members don’t exist.  These are difficult times in the life of our nation, which is at least half the fault of my inability to deal with the raving psychos that inhabit my party.   

Live Together, or Die Alone

Thomas Jefferson said, “When the people fear their government, there is tyranny; when the government fears the people, there is liberty.” While this may have been the case when Mr. Jefferson originally spoke these words, it is no longer the case that those are our only two options. Perhaps a more modern way of looking at it is that our government is the people, & it's time to stop being afraid of each other. The partisan divide has grown so wide in the United States that it’s easy to forget that we’re all supposed to be on the same team, and all supposed to be working together. I would even go so far as to say that the reason that our economic recovery has been so unbearably sluggish isn’t the failure of one policy initiative or another, it’s the failure of us to come together to fix the problem. The American people are too busy trying to secure their own advantage by any means necessary to even notice that doing so is only dragging them even further down.

Not Your Dad's Republican Party.

It is completely mystifying that policy positions that would have seemed conservative a generation ago are now considered too far left for many Republicans to even consider supporting. The Tea Party has forced the GOP establishment to move its goal posts. And quite frankly, they've put them on a conveyer belt. In this deeply polarized era in Washington, the Tea Party's idea of negotiations is simply restating policy positions with little or no intention to actually bargain.

Strange Deficit Magic

With all of this debt ceiling shenanigans going on, and all the hemming and hawing about the deficit, it's worth it to take a look at how all of this stuff actually functions.  What does it mean, really?  Why do we care?  How many angels can dance upon the head of a pin, and so on?  I've been thinking about it a lot recently (taking time away from more important things, like the NHL offseason).  Today though, I read this post by Yglesias which put a lot of what I was trying to say into shape...

What The McConnell Plan Means

Yesterday, the entire course of the ridiculous debt ceiling debate changed radically, and without warning. As Hurley noted yesterday, Mitch McConnell (R-KY) offered a surprising plan to sidestep the entire issue entirely, at least for the next little while. But this offer changes a lot of things, and it sheds some light on the internal workings of both the debate between both parties, and within those parties as well. So it deserves a second look, even if it means I have to talk about the stupid, stupid, stupid debt ceiling again.

Bullsh*t Sandwiches and Emperor Palpatine

Senator Mitch McConnell, today, said that there is no possibility of solving the nation’s spending and debt problem, “as long as this president is in the Oval Office.” At the same time he proposed to give the president emergency powers to deal with the matter which would, as David Weigel noted today on Twitter, effectively render President Obama the real life Emperor Palpatine. This news came on the same day that the president awarded the Medal of Honor to Sergeant First Class Leroy Petry (the Boston Globe) for his gallantry and commitment to our nation and his brothers, with no concern for his own well-being.

Why The Debt Ceiling Is Stupid

First things first: the debt ceiling is stupid.

It seems very obvious that the concept of a debt ceiling is outdated and approximately as useful as a driver's license for a microwave. The ceiling was first established on bonds only via the Second Liberty Bond Act, and was then modified to apply to all debt. Since then, the ceiling has been raised approximately eighty-five thousand times (not intended to be a factual statement) with effectively no controversy whatsoever. This is because of spending is already authorized, un-authorizing it via refusing to raise the debt ceiling is pretty stupid. Furthermore, to not raise the debt ceiling would cause the United States to default on its debt, and anyone above the age of about eight understands that this is probably a bad thing. Observers who say that it would basically destroy the U.S. and global economies are not actually exaggerating.