Dear Readers: I have always asserted that the drama surrounding the debt limit ceiling has always been Kabuki Theater for the benefit of the bases. My title is a quote from the late, great Fox News pundit, Tony Snow. I think it is important that we citizen activists recognize that the only goal that our Ruling Class has is to avoid being the loser in the new game of “Hot Potato” being played in Washington, D.C.; neither side wants to be caught with the blame for the hot, swirling fiscal mess.
True, Obama gave Eric Cantor the “Bibi Netanyahu” treatment yesterday. However, it is important to recognize that both sides of the debate are not being honest. For example, during a meeting in Washington DC, SoCal Tax Revolt Coalition President Dawn Wildman was treated rudely by Sen. Mitch McConnell’s staffers because of her strong, pro-citizen stance. The DC elite had absolutely no interest in her input, despite her activism at the national level involving citizens across the country. During the Tea Party Patriots’ American Policy summit, one of the Tea Party congressional freshman tried to tell everyone that the debt ceiling was going to be raised (and tried to make a case for it). It was not a popular message at that event. So, as fellow SLOB W.C. Varones noted — the debt ceiling was always going to go up.
Boehner and the Republicans will talk tough all the way to the brink, then fold like a cheap suit and accept a deal that has something like $2 trillion in alleged spending cuts over ten years, all of which will be back-end loaded meaning no significant cuts before Election 2012, and which will not put the country on a fiscally sustainable path.
The only Lions we have in Washington D.C. today are in the zoo. There is no leadership from either party. The only losers, no matter the outcome, are the American people.
Professor Athena drew my attention to this gem from the Wall Street Journal, and it highlights the reality of the Moody’s downgrading threat:
Here is a sample from the piece that caught by eye:
Jim Vogel, FTN Financial:
Unlike many aspects of credit analysis, the market is likely to render its own judgment on the US’s credit standing rather than register a knee-jerk response to any rating agency’s views on a topic of this magnitude. One reason is that rating agency cookbooks don’t function that well on large scale, complex issues. Investors are much more likely to follow rating wisdom when the issuer in question represents one segment of an industry or a smaller sovereign. Concluding the US political process is fundamentally flawed — when this particular government array has been at it five months — is a stretch few of the world’s most aggressive investors would be willing to make right now.
Although part of Moody’s message raises important issues about debt management going forward, the immediate focus on August raises the bar for AAA that is a big stretch in this political environment. By requiring a high degree of political unity/speed on a genuinely contentious issue, Moody’s actually diminishes its own credibility and its standing to influence market behavior on global sovereign issues. S&P has taken a similar stance and runs the same risks among investors.
This is the reason I have been highly skeptical of both sides during this whole process — the American people are not being given all the information. I hope to talk to Professor Athena more for her perspective, as sound finances and a healthy economy key to our liberty as a people.
In the meantime, what can we do, as average citizens?
* Get in the habit of reading business and economic journals (as above), so you get get the real information.
* Keep in contact with your representatives; at least you will know, in your heart, you expressed what you felt was best for the country from your fully informed opinion.
* Recognize you will have the most impact locally; get involved with a local citizens group and run for a local office of some sort.
* If you like punditry, become a citizen journalist and report on your local and state issues. The elite media has contributed to pushing the false narrative; we need to counter it.
I would like to point out that this piece summarizes exactly how I feel about the entire situation: The Vicious Jackals Are Planning to Screw Us Over (But You Already Knew That)