Deficit Ceiling Kabuki Theater

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Mano Singham, in his blog, clarifies some of the strangeness around the whole debt ceiling debate, and what is really going on.  He points out that though the matter is presented sometimes as "Obama vs. Congress", or "Democrats vs. Republicans", etc, etc, it is really Big Business vs. Everybody Else.

Mano quotes several authors.

The first of these is Ralph Nader.  Nader has some hard remarks to make about taxes and corporations.  The most surprising thing he says is that big corporations are sitting on about 2 Trillion in profits that they are not sharing with shareholders.  If they did, the economy would absorb it gratefully, and it would alleviate some of the hardship we see around us.

The next is Matt Taibbi [Rolling Stone], who discusses the style of the Obama presidency, and reports on the opinions of many economic experts who say that the President, wanting not to appear to be an "angry black man," has taken the advice of too many clever white guys (I paraphrase), who do not want to alienate Wall Street.  Obama, Mano Singham has always written, is too concerned with not burning his bridges with Big Business.  One would not think this, given the rhetoric of the Republicans.

Mano then links to Paul Krugman [New York Times], whose brief post I am not smart enough to understand, but suffice it to say that it is critical of Obama.  This is not the time, he says, for Government to tighten its belt, just because the rest of the country is suffering, something I completely agree with.  Tragically for liberals, President Obama seems intent on establishing his credentials as one who stands up to the Democratic Party, in order to gain the support of the so-called independents in the coming election, which is what Glenn Greenwald says, in addition to agreeing with Mr Krugman on most points.

Here is my take on this.

Nobody wants enormous deficits.  But ...

Until the debt is reduced ---in a responsible, considered way--- the country must continue to stand by its debt, especially since the automatic steps that follow on refusal to raise the debt ceiling are very serious and repugnant.  The analogous situation for private individuals is like keeping onto your debt and continuing to make payments, or going into bankruptcy.  For individuals, though bankruptcy practically destroys your credit rating, it can be an opportunity for restructuring your finances under the supervision of the courts.  For a country, there is no higher power to which it can appeal for guidance and supervision.  (In any case, the USA will reject any attempts at benign supervision, and resort to drastic and puerile acts that will make matters worse.)

Everybody, therefore, needs to have Congress raise the debt ceiling.  But it suits the Republicans to pretend that they are doing it for the President, and to levy favors in exchange for cooperation.  One need hardly mention that these favors are all intended to help Big Business and big businessmen: lower taxes, smaller Government spending on the poor.  (Wars are OK, because they help arms manufacturers, who are a stealth component of Big Business.)

It appears that either the President is unable to see through this pretense, or continues to play along with this fairy-tale for his own purposes.

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