GOP Abandons Economic Blackmail
Posted: 12/02/2014 | Author: The Political Idealist | Filed under: Uncategorized | Tags: democrats, economics, federal government, GOP, national debt, Obama, spending cuts, us politics |Leave a comment »In an extraordinary turn of events in Washington DC yesterday, the House of Representatives passed an increase in the Federal debt ceiling without pushing America to the brink.
The Republican party has abandoned its policy of trying to blackmail the Democrat administration into approving savage budget cuts, using the threat of blocking any rise in the debt ceiling. After the events of last year, the American public has grown less tolerant of this form of blackmail that depends on the threat of bankrupting the federal government. Republican leaders realise that the public have looked into the eyes of the Tea Party congresspeople during the government shutdown and were terrified by the lack of limits they felt. Indeed, it almost seemed as if the rabid right wanted to drag the federal government to the abyss… and then throw it over. That doesn’t make for good election result for your party.
Accordingly, the Republican Party has conceded a bill that will allow government finances to run smoothly for a whole year. Well, I say “conceded”: over 200 of the 435 HoR members voted against the bill, so only a small section of the GOP actually backed its leadership’s moderate policy.
The Republican Speaker said:
Obama will n
ot engage in our long term spending problem. So let his party give him the debt ceiling increase that [Obama] wants.
The US does have a financial problem. It is running a budget deficit of $512 (£310) billion and a national debt of $17.2 (£10.4) trillion. However, it is uniquely placed, as the issuer of the world’s reserve currency, and the richest country (in terms of GDP and GNP) to be able to comfortably sustain a much larger debt than other countries. However, it is only prudent for a growing economy to look to balance taxation and public spending, and ideally pay down its debts. But one cannot eliminate a half-trillion deficit quickly in an economy still dependent on monetary stimulus. But most importantly, it’s a revenue, not a spending, problem that the US government has. Reagan, Clinton and the Bush presidents have all been complicit in the reduction of taxation to unsustainably low levels. By contrast, I think there are few parts of the federal government, other than the military, that are guilty of overspending. There is little to cut. Imagine how much the deficit could be reduced by if the top rate of income tax was increased from 35% to 45% in a country with the largest number of millionaires?
The Republicans genuinely don’t want to see the consequences of proper engagement with deficit reduction.
