Dancing for high stakes View 20110723-1

View 684 Saturday, July 23, 2011

The news from Washington is depressing. The President has determined that he’ll continue the Deficit Dance, and he won’t accept any “temporary” solution. He wants something that will get the Debt Limit out of the way until after the 2012 election. I note that CBS News last night had linked features: a long screed about how awful losing Social Security would be to some very nice people, coupled to a replay of Obama saying he couldn’t guarantee Social Security payments after August 2 without a raise in the Debt Limit. There was no mention of the fact that the government has an income and could make the Social Security payments without borrowing more – provided that it made heavy cuts in government salaries and laid off some government employees. There was no mention of the fact that failing to make Social Security payments is defaulting on a government loan: the Federal Government is both the loan source (the Social Security Trust Fund) and the borrower (we have been taking the money out of the Trust Fund and “investing” in Treasury Bonds for generations), and thus Social Security payments are part of necessary debt servicing to avoid default. The story was simply about how awful it would be for these nice people when the government stops making Social Security payments.

Then, no big surprise, the next big advertisement was from the AARP.

When BYTE was at McGraw Hill there was a rigid wall between editorial and sales, and that kind of linkage between a big “news” item and an advertisement would have been cause for investigation. It was legitimate for editorial to let sales know about upcoming features. In this case, though, the two items were thoroughly linked. One should not be surprised, I suppose.

The President is behind in the polls. If the election were tomorrow he would lose to nearly anyone the Republicans could nominate. Rush Limbaugh insists that he would lose to Elmer Fudd, which may be an exaggeration, but the point is that Obama is desperate. He’s now playing for the highest stakes imaginable. He is certainly correct when he proclaims that a US default would raise the interest rates for everyone, US government and everyone else, costing us all money: and that the effect on the rich would be worse than more taxes. So give in: let taxes be raised. You’ll feel better. Those rich guys aren’t paying their fair share. We need more money and they are not paying it, and it’s all their fault. Of course we can’t get out of this mess with spending cuts alone, so give us some more money or everyone’s going to get hurt. Don’t make me do this to you!

In any context but this it would be called extortion. It’s a variation on the mob’s favorite game, protection racket. But when applied by the President of the United States it is, in these times, business as usual.

We continue to sow the wind.

= = =