Debt Ceiling Part 7.0

Don't drink slaughter the Kool Aid.

The political debate is starting to heat up over the debt ceiling.  Despite that, the majority - or at least a plurality - of Americans still don't seem to understand what the debt ceiling is or why it's absolutely essential that it be raised.  You have idiots like Paul Broun (R-GA Moronia) actually talking about lowering the debt ceiling.  While he's at it, maybe he should repeal the law of gravity.

Anyway, as the debate increases in intensity, it seems obvious to most sentient people that Obama has been much more flexible than the GOP in considering a deal for raising the debt ceiling, including embracing some ideas that are frankly stupid, counterproductive and a betrayal of his constituents, such as raising Medicare eligibility to 67.  

As any economist who isn't employed by some think tank subsidized  by the Koch Brothers will tell you: You don't cut spending in a recession.  We have a demand problem that is keeping unemployment untenably high.  When Obama agreed to cuts in the last negotiations with the GOP, they were mostly bookkeeping changes and phased in cuts over time.  Some of the cuts proposed right now would likely lead to a true double dip recession.

Lawrence O'Donnell seems to think that Obama has played a brilliant Rope-A-Dope on the GOP.  He's publicly accommodated a ton of their insane suggestions, knowing that in the end they would walk away from the table when he laid his marker - revenue increases on the richest Americans.  Sure enough, Cantor walked away and now any increase in the debt ceiling is likely going to require House Democratic votes and will not, therefore, include major cuts to entitlements.

I have no idea what will happen or whether O'Donnell is right.  But it does seem to me as if we could wind up with a clean debt ceiling increase, or at least it seems more likely than it has at any time up until now.  

I've always felt that Boehner was a shallow pol but not a stupid one.  He understands - as he has said - that the debt ceiling must be raised.  He is also trying to accommodate his batshit insane Teatard members.  Obama has cemented his position as the reasonable one, and Boehner knows this.

I have no idea what happens as the endgame here.  Perhaps they introduce another "clean" debt ceiling bill and enough Democrats and enough Republicans pass it.  

But in my recent readings of the Great Depression, it occurred to me that intelligent, well-meaning men made disastrous choices for all the "right" reasons.  Their folly was to be captured by outmoded ideas about monetary policy and macroeconomics.

What worries me is that we have a momentous decision ahead for the world economy. and we don't even have intelligent or well-meaning men and women who ultimately hold the power to make this crucial decision.

And that scares the poop out of me.