It’s not about a Tea-Party Victory, but the death of the socialist left:
Most pundits are crediting this U-turn to the political muscle of the Tea Party and it’s true that President Obama would never have agreed to this deal if the Tea Party Republicans in the House of Representatives hadn’t engaged in the brinkmanship of the past few weeks. But to focus on the Tea Party is to ignore the tectonic political shift that’s taken place, not just in America but across Europe. The majority of citizens in nearly all the world’s most developed countries simply aren’t prepared to tolerate the degree of borrowing required to sustain generous welfare programmes any longer.
Let’s hope, though socialism is driven by innate human traits, primarily laziness and envy (and to be fair, misplaced compassion), so it will always rear its ugly head as long as we remain human.
[Update a while later]
Was this Obama’s “read my lips” moment?
And so we have the best of both worlds politically: a deal that leaves the Tea Party unsatisfied and therefore fired up for the next battles and election cycle, and a demoralized liberal base that can’t come to grips with the fact that socialism is over because we’ve run out of other people’s money…
Is it almost the end of the beginning?
I think not.
Remember all the articles trumpeting the death of the Republican Party after the 2008 debacle? Writers like trendy memes. The appetite for the public to vote themselves benefits is huge.
/spit-take
An unfathomable amount of public debt is set to grow by a half again, at least, and this is offered with all seriousness? Meanwhile, Krugman is on suicide watch, proving that anyone who reacts with great pathos (‘hostage taking!”) to this deal either way can be safely ignored.
If only!
Tea Party types are supposed to have one when this years “reductions in planned increases” amounts to 21 billion dollars out of 3.5 trillion budget?
This skirmish is only significant if it becomes a trend that accelerates from this point.
I was going to make a remark to Rand regarding declaring victory on this, but two of The Faithful beat me to it, posting in all earnestness without any Usual Suspect snark, that The Deal was indeed a Rotten Deal.
It had been suggested to me that the real characteristic of the Academic Liberal Left is not that they support single payer health care or renewable energy or gay marriage or that they oppose war or cuts to entitlement programs. No the Liberal Left is not characterized by support or opposition to any one or even combination of policies or concerns.
What characterizes the Liberal Left is the there is this Big Crisis. Only the educated and informed at the elite academic institutions recognize even the existence of the Big Crisis, most people out in the hinterlands beyond the borders of the University Town are unaware, and Conservative activists are malignant deniers of the Crisis. We in the various university social and political science departments not only know about the Crisis, we have written scholarly works explaining what has to be done about the Crisis, but there are the indifferent masses fed misinformation by those awful Conservatives, and it looks hopeless that anything will be done about the Crisis. As all is hopeless, we do not commute to work with the University Bus Pass but instead drive to work in a large SUV.
The Crisis Formerly Known as Global Warming is such a Big Crisis. The amount of CO2 in the atmosphere only keeps going up, it is at an all-time high, not only in human history but within the geological age in which humans have existed, much of the increase is only within the last 50 years or so, and the trend is for CO2 concentrations to skyrocket upward. And CO2 is a greenhouse gas, and it is getting hot right now (think of the weather in Texas this year) and it will bet much hotter yet, and think of the burden of high CO2 and crop-destroying drought and heat we are leaving our children and so on and so forth.
Paul, you will say, Climate Change is a scam to impose One World Socialist Government whereas the Debt Crisis is for real. Well, I am a skeptic of Climate Change and I am a skeptic of the Debt Crisis narrative. My skepticism is driven not so much by the substance of the Crisis because crises come and go but by the form of the narrative. A certain something is as worse as it has been in human history, the worsening has gotten seriously worse in the past, dunno, 50 years, the worseness threatens to worsify in the next 50 years in a way outside of all human experience or comprehension, and, get this, think of the children.
What I am saying is that the Conservative/Libertarian/Tea Party movement is taking on a lot of the narrative structure of the Liberal Left, which is making me increasingly skeptical.
That’s if we’re lucky. It seems clear now that the public debt is set to grow until lenders give up on ever having it paid back. So basically we’re in the same situation as any other bubble: new investors pay old investors, in the hopes that they’ll be repaid with interest by newer investors, despite knowing that eventually we’re going to run out of newer suckers investors.
The only open question is how we’ll react to running out: a suddenly balanced budget? IOUs instead of checks for government employees and contractors? Bonds paid for with nothing but newly-printed inflationary money? Default on existing bond obligations? It sure would be nice to know which way to be ready to jump…
“That’s if we’re lucky. It seems clear now that the public debt is set to grow until lenders give up on ever having it paid back. ”
That’s if we’re lucky. It seems clear now that the atmospheric CO2 is set to grow until a tipping point is reached where a feedback mechanism is saturated — the Earth will give up on trying to regulate atmospheric temperature.
Its the same argument of “unsustainability.” Clearly (?) there is some level of CO2 that is unsustainable in that it will cause change in the climate with unforseen consequences. Clearly there is some debt level that is not sustainable either.
It is not clear at all that we are anywhere near that level of CO2 now, and the same applies to debt — 10 year Treasury at 2.7% this morning?
Roystgnr, AFAICT, the public-debt-in-perpetuity strategy is the ultimate pyramid scheme – no one living must ever pay it down because a previous generation will be born into that bondage, but all decisions made in the perpetual “now” will maximize the utility of all capital and labor such that, compared with any alternate path, everyone will be richer, regardless. The premise is that so long as USA is #1, everyone on the planet will lend it wealth, and this all will continue until the sun turns into a Red Giant and engulfs the Earth in flame. The frustrating part is that this premise is never challenged, never defended, never even spoken of. Ergo, my confidence in the entire global monetary system remains…well, low.
“previous” = subsequent, of course
roystgnr wrote:
It seems clear now that the public debt is set to grow until lenders give up on ever having it paid back.
We passed that point about two years ago. The Treasury Dept. has never been able to borrow more than about $400 billion per year from ordinary lenders. Our $1.6 trillion deficit is being financed primarily from $1.2 trillion / year of quantitative easing, which is what has led to the high inflation in this country. And inflation is just getting started. Once the banks are de-leveraged they’ll start lending that extra money, and then it’s Katy-bar-the-door.
The budget deal is a raw deal. It cuts $2 trillion in anticipated spending over ten years. That’s only $200 billion / year, which leaves $1.0 trillion of quantitative easing per year for the next ten years.
By the time it’s over, even if it runs out without a currency collapse, the dollar will be so weak that the middle class will have been wiped out.
One wonders if that is by design.
“We will grind the middle class between the millstones of taxation and inflation.”
— Karl Marx
Mike
Paul Milenkovic wrote:
It is not clear at all that we are anywhere near that level of CO2 now, and the same applies to debt — 10 year Treasury at 2.7% this morning?
That’s because they’re not trying to finance the deficit through borrowing, Paul. Let them try to actually borrow $1.6 trillion / year, and see what happens to interest rates then.
Mike
“The majority of citizens in nearly all the world’s most developed countries simply aren’t prepared to tolerate the degree of borrowing required to sustain generous welfare programmes any longer.”
Another way to say that is that the majority of citizens in those countries aren’t prepared to tolerate the degree of TAXATION required to pay the expense of politicians having their feel-good programs and buying votes (and both the Dems and the Repubs do both things). The politicians know that, so their only source for the ever-increasing sum they need to buy votes is borrowing the extra money, kicking the ever-increasing huge tax increase or default crisis can down the road year after year. I hope whoever runs against Obama next year can find a way explain and hammer-home to the average voter (and all the remaining TAXPAYERS) the dishonesty and moral cowardice of the entire political class for many decades now.
And what the politicians have been able to get away with for decades does not reflect well on the voters. We face huge, multi-level, multi-generational political and financial problems in the USA.
I bought 6 Zimbabwe notes on ebay for $9.99.
1, 1B, 5B,10T,50T, and 100T (T=trillion)
I show people the 1 and tell them that early on the Zimbabwe 1 was worth 1.47 US. The government borrowed money to do things… more than it could afford to pay back… so it started printing….
Once I’m done showing them the 100 Trillion dollar note I take out a $1 bill and ask what is the difference between these two pieces of paper?
The responses have been interesting…
The most amusing was:
“That’s not real money like that one is, as they point from the Zimbabwe to the US $1 bill.”
The Tea Party should not go about thumping their chests. No one read the bill and there is bound to be some nasty surprises in it and if the Tea Party people take credit now, they will get the blame later.
Obama’s speech was interesting today. He said something about now the congress can move onto other bills that will “invest” in job creation.
Obama once said he was busy dealing with the crisis in Greece, I wonder what lessons he learned from all that hard work?
Paul, I should start doing the same with my grandparent’s 100,000 adópengő note.
wodun Says:
August 2nd, 2011 at 10:27 am
+1
[[[the death of the socialist left]]]
Which has always been a fictional straw man used to stir up the TP/JBS
President Obama is a moderate Democrat at best which is why so many in his party are unhappy with him for not standing up to the TP/JBS