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Hurricane Sandy Relief and the Debt Ceiling

179 Republicans do not think this is worth cleaning up.

179 Republicans do not think this is worth cleaning up.

So we have another standoff on the debt limit, this seriously cannot surprise anyone. House Republicans are threatening to default if there are not spending cuts while President Obama has refused to negotiate with “terrorists”. At a breakfast I had with Speaker Boehner at the end of last year, he said that Congress would raise the debt limit because it was their responsibility to do so. Now I am not convinced this will happen. The sanity of Speaker Boehner is being vetoed by the extremism of the Republican Party. The Speaker is coming dangerously close to losing control of his members.

Why do I suddenly think Republicans might push us into default? Hurricane Sandy. The fact that 179 of 233 House Republicans voted against giving aid to Hurricane Sandy victims shows they would rather make an ideological stand than help the American people. No matter how bad it hurts the American people and economy, Republicans might push us to bankruptcy to prove a point.

Patriotslog has been a loud advocate for spending cuts since our beginning, so I understand the Republican concern. But I find myself more in the President’s corner on this issue. The simplest way to explain the debt ceiling standoff, in case you just returned from Gilligan’s Island and have not heard anything about it, is that Congress passes laws telling the Government how much it can tax, then passes laws telling the Government how much it can spend. Now a significant group of Congress is telling the President he must break one of those laws they passed by taxing more or spending less than they have allowed, or our nation will have to declare bankruptcy. Congress has racked up the credit card bill, now half of them are suggesting we refuse to pay it. Maybe Warren Buffett was right. Jokes aside, our deficit problem would go away faster than Michele Bachmann’s support for her presidential campaign if these guys were disqualified for re-election because of too much red ink.

77% of Republicans voted against the aid package for Hurricane Sandy victims. Many of whom are the same Republicans who voted for more defense spending. It is crazy that these people would rather see our military–already bigger than the next ten largest militaries combined–get even larger than help someone rebuild their home, their business, their school, and their life after blunting the second most destructive hurricane in our history. Only Hurricane Katrina was more destructive.

So I got to thinking, how many Republicans voted against Hurricane Katrina relief? Only 11. Then I decided to look further than that. I looked at every disaster I could find since 2000 with over $10 billion in damages, and what I found made me even more concerned about the Hurricane Sandy relief vote. The 9/11 relief package had zero Republicans oppose. Ditto for Hurricane Ivan. Hurricane Rita? Only 19. When additional hurricane damage burdened the gulf region zero Republicans opposed additional aid. There was no vote for wildfire relief, but I think it is safe to assume it would have had large support.

So why the lack of support now? It could be because the Sandy hit heavily Democratic states, so it provided a convenient opportunity for Republicans to prove a point. If this sounds farfetched, consider–this and keep in mind I am not a Democrat, so I have no party bias against Republicans. Rick Perry, Governor of Texas, cut his own states firefighting budget, then criticized FEMA because he thought Texas deserved more aid for wildfires. Republican Congressman Steven Polazzo of Mississippi lobbied heavily for Hurricane Katrina relief, then voted against Hurricane Sandy relief. The Kansas City Star highlighted a handful of Congressman that voted against Hurricane Sandy relief after heavily benefitting from federal disaster aid themselves.

So the question that I think all 179 Republicans need to be asked is, “if your district had needed the disaster relief, would it have changed your vote?” I would have serious moral concerns about any representative that answers yes. American people are suffering; United we stand, divided we fall. To discriminate aid and relief because of geographical location or political party is beyond low. If these Republicans would vote against aid to every district, including their own, this might not concern me, but I just cannot believe that would happen. It would appear they care less for the good of the American people than the finances of the nation. That is why I cannot be so sure our debt ceiling will be raised. Default would be catastrophic both for our nation and the world. But if pulling the rug out from under our economy and livelihood proves a point, it seems conservatives are all for it.

What concerns me most is that last year’s ultra-conservative caucus–Representatives like Eric Cantor, Tom Cole, Scott Garrett, and Frank Lucas –voted for the relief bill. So exactly how extreme is this new Republican House to vote overwhelmingly against it? Extreme enough to take the unprecidented measure of default? It seems plausable to think so now.

 

–Matt Young

16 January, 2012

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Would Going off the Fiscal Cliff Really be that Bad?

So, it is official. With the one of the largest political and financial crises of our lifetimes set to hit every American in just over a week, the people you and I elected to solve problems are MIA. At the first opportunity Congress bailed faster than a Kardashian in a marriage. We assume they will be back sometime toward the end of next week, just in time to have a good two or three days of work before the fiscal cliff actually sets in. This is the pessimists ultimate “I told you so” moment; the “throw ’em all out and get new blood” caucus is having holiday; Christmas will come twice for them. So the question is, would you rather make Congress actually do their job, or let them spend Christmas with their families? There probably is not a right answer here, but the fact that they are getting out of dodge just before the shootout once again shows why we as a nation do not trust them or approve of their performance.

So with the probability of driving off the fiscal cliff edging closer to a sure thing, maybe it is time to ask the bug question; would going off the fiscal cliff really be that bad? If a simple yes or no answer would do, I would have to look into writing sports articles or screen plays. Before you call me crazy, hear me out; the media and government are telling you it is the end of the world, but is it? By now everyone in the most remote parts of the world is aware that going off the fiscal cliff means an end to the Bush era tax cuts, the long term unemployment benefits, the payroll tax holiday, and the alternative minimum tax alongside the “sequester” spending cuts; across the board spending cuts of 9.4% for all Pentagon departments, and 8.2% for nondefense discretionary spending totaling $1.2 trillion. So what would your post-cliff world look like?

The question on everyone’s mind is, how will this affect me? What does this mean for the economy? Those on long-term unemployment will be hit the hardest. Typically unemployment benefits run for 26 weeks, or six months. However, during the brunt of the recession they were extended to 73 weeks, or just under a year and a half. This means people that might lose their jobs after the fiscal cliff will be in trouble if they cannot find a job. To gauge that we need to figure out how far the fiscal cliff freefall will be. The answer, according to most economists, is between 3-5% next year. To most normal people that number means nothing, so to interpret, that is about a little less than the 2008 recession; meaning this would not be an end of the world scenario like cable propaganda channels might tell you.

jobsc                Even if you look at layoff estimates, digging into the numbers makes the fiscal cliff seem more like a fiscal diving board–maybe not even the high dive at that. Estimates are that we may lose in the neighborhood of 1.5-2 million jobs if we go off the fiscal cliff. That seems like a huge number, but we have to remember that when President Obama took office, as he so readily reminded us during the campaign, we were losing 800,000 jobs per month. So the total job losses from the fiscal cliff might be about as bad as two or three months of losses at the beginning of 2008; maybe even less. I know that is a tough pill to swallow, but we know from 2008 it is not impossible to overcome. Moreover, business experts have been saying the reason businesses and banks are sitting on their hands is the uncertainty of the future. We now know Obamacare will stand, we now know who the President is, and after Jan. 1, whether a deal is struck or we go off the cliff, we will know exactly what the taxing and spending picture looks like as well–no matter what happens we will have certainty. With certainty businesses will know what to expect and what they can do. We may recover faster from a fiscal cliff dive than from the recession.

So the bad news might not end up being as bad as many expect it to be, but is there good news? Yes, the good news is that going off the fiscal cliff will make a significant dent in our federal spending, and with the increased revenue, our deficit as well. Going off the fiscal cliff will mean we have a solvent, respectable nation to hand over to our children. Going over the fiscal cliff means we will return to the tax rates that we had under Clinton, and similar to those under Reagan–the two highest growth periods in our lifetimes. The first rule of philosophy is that just because something happened after does not mean it happened because of. Yes there were other factors in those growth years, Republicans love to point out the internet boom under Clinton, but we cannot let them forget Reagan got us out of a recession at the same time he raised taxes.

Unfortunately that was a different era. An era of moderate Democrats in the south and progressive Republicans in New England; an era without cable and talk radio propaganda; an era where doing what the nation needed was applauded by your party, even if you had to go against your party to do it. Congress is far too polarized now for Speaker Boehner and President Obama to strike a Reagan—O’Neal type deal; the two party system has made it that way.

Yes, going off the fiscal cliff will hurt, but it might just be a sprained ankle or broken arm; it will not be suicide. We have had a 5% GDP drop at least 8 times since WWII, and we always came out stronger. Unless we get a real deal, a real grand bargain that raises significant revenue and makes major spending cuts we will stay on the path we are on. Congressman are more worried about their own re-election than they are their own children’s future. The path we are on is the same path as Greece; another decade one this path and we may have to face austerity as well–that would hurt much, much more then the fiscal cliff, and our children would be paying for that for generations.

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Going off the fiscal cliff, or any other big deal for that matter, will be bad in the short run, but it is manageable. And in the long run we will be the better for it! It will put us on a fiscally responsible path, and be I first step to the major spending cuts we need to make sure we have programs for the future. Going on a diet always sucks, but after you have trimmed down your fat it is worth it.

We can and we will recover from the fiscal cliff, should we take the dive, and we need a painful solution to our problem. Nobody wants higher taxes, but we cannot have low taxes and big government programs without becoming Greece. This is the corner we have painted ourselves in; if you do not like it, vote for someone else in two and four years. A small deal will not help, and a big deal seems unlikely. Unfortunately the most likely scenario is more of the same–extending everything at its current state, kicking the can down the road, as they say. Unfortunately we are close to kicking the can down our children’s’ throats. The fiscal cliff is our CPR. If we do not get a major deal, it might even be our best option.

–Matt Young

26 December 2012

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