As hard as I try, I can never wrap my mind around all the dynamics associated with D.C. politics. The debt-ceiling showdown is another issue that is illustrative of that condition, which would defy common sense if it weren’t taking place in the Washington Beltway.
First of all, nobody believes the U.S. will allow itself to default, including the global financial markets. And, behind closed doors, both sides will admit that they know this type of spending can’t be sustained, and the cuts being discussed are not even real cuts. They just slow the growth rate of government, and most of the slowdown in spending doesn’t even happen immediately.
But, it gets even crazier when one realizes that all the fear mongering, class warfare, etc., coming from both sides is largely just political posturing.
• The Democrats want to force the Republicans to raise taxes, which they know would put a fragile economy back into recession; or better yet, not raise taxes and accuse the Republicans of caring only for the rich.
• The Republicans want to appear fiscally responsible on spending, but are actually providing merely a band-aid to a wound that needs surgery.
No one is seriously talking about entitlement reform or the real big budget items. This is all for show for the 2012 election.
I truly believe we must get our fiscal house in some semblance of order and that mortgaging the future of our kids and grandchildren is unethical. So, from that standpoint, I support the Republican position.
But, I also understand that everything in D.C. is political, and that the possibility of a default is a political bonanza for the Democrats. In fact, many pundits say a default would virtually assure Obama’s reelection and make it very difficult for the Republicans in Congress to gain control of both houses.
Thus, I sit in amazement at the whole spectacle. The bottom line is that Republicans don’t have a majority in the Senate and can’t override an Obama veto. So, they have no leverage; they can just make a political point and stake out their positions on taxes and spending, with no real results in prospect.
Political posturing is fine, but it will be counterproductive if carried to the deadline. Substantive spending cuts won’t happen with this administration, but they have to happen sometime; the electorate will demand them.
Washington has to adopt some pro-business strategies if it has any hope of restarting the economy. The power rests with Obama and the Democrats, but if the economy continues to underperform, they will pay the price for it.
While the spending has been historic and unprecedented the last few years, accounting for more than a third of our debt, it’s also something that has been in the making for the last 70+ years. We’ve been living beyond our means for quite some time, and it is going to take some time to fix the problem.