Republican Treason

As the clock marches on, it has become increasingly clear that the Republicans are hell-bent on using the debt ceiling as a means to push their fiscal and political program on the United States. Republican Senator Tom Coburn of Oklahoma has admitted as much of the Republican refusal to play along, stating that "It's a political strategy-it's not a policy strategy."

My Gut Reaction: People willing to play politics with our economic well-being are no better than traitors.

Analysis: The effects of a failure to raise the debt ceiling could be catastrophic. As a recent story by NPR reports, one of the immediate effects would be an inability for the government to pay out Social Security, as the federal government would only collect $12 billion in taxes while needing to pay out $23 billion. That's not getting into other issues such as paying the military and federal employees.

Some are trying to tell us that it would not be so bad. For example, Nick Gillespie of Reason Magazine raises the point that the August 2nd deadline is at least somewhat arbitrary, as it is difficult to measure the full amount of borrowing taking place. He also suggests that it is unlikely the United States would actually default on its debt, as the amount of money the federal government takes in well surpasses its annual debt payments. However, that assertion fails to explain the recent announcement by Moody's that it is considering downgrading the United States's credit rating.

Luckily, not all of the Republican Party has gone insane. Senator Mitch McConnell has recommended a "Plan B" whereby the President would be able to raise the debt ceiling subject only to a veto-proof vote by Congress. This has enraged Congressional Republicans, but stems more from Sen. McConnell's political savvy than any real patriotism on his part. He is on record warning that failure to raise the debt ceiling would leave Republicans vulnerable to being held responsible for ensuing economic woes. Yeah, plunging your country into economic chaos tends to hurt your poll numbers.

Debt Ceiling Madness

Negotiations over raising the United States's debt ceiling have reached a virtual standstill, as the Republicans remain intransigent over raising revenue. In particular, they oppose closing tax loopholes for rich people such as hedge fund managers. One major Tea Party leader, Sen. Jim DeMint of South Carolina, has expressed a willingness to cause major disruptions to the American economy rather than reach a compromise.

My Gut Reaction: Jim DeMint is not a real American. The Tea Party's stance as a patriotic force is a charade.

Analysis: It is time for Democrats to take a stand. Ideological fanatics like Senator DeMint and his followers are not loyal government officials. If they keep on their reckless course and America defaults on its debt, the consequences will include a massive drop in the United States credit rating, the inability to pay Social Security, and most disturbingly given the Republicans' stated concern for American soldiers, military payments.

What are the tax breaks that Republicans are trying to defend? Well, they include breaks for horse breeding and corporate jets, as well as the "carried interest loophole" for hedge fund managers. This carried interest loophole allows hedge fund managers to treat payments for their work as capital gains, resulting in their paying a far lower rate. If this loophole were ended, it could get the United States 4 billion a year, and cut the deficit by 44 billion dollars.

Even commentators who normally support the Republicans are crying foul on this. In a recent New York Times column, David Brooks argues that if the Republicans allow a default, they will show themselves unfit to govern, particularly in light of the Democrats' willingness to concede on government spending. Similarly, columnist George Will has said that it would be suicidal for Congressional Republicans to oppose raising the debt ceiling, even going so far as to question the proposition of the debt ceiling itself. (Video below)



Democrats must remain firm on the issue of tax loopholes. If the Republicans want to cut government spending, they must also be willing to give on tax loopholes.