kimba wrote:
Suranis wrote:
Because 2010 gave the house and control of the purse to terrorists.
You can rant and rave all you like but that's the bottom line.
Dems still have two out of the three pieces - the Senate and the Presidency. The Repubs can't pass anything without cooperation from the Senate and the President. Why the Dems aren't using that to their full advantage, I don't know. My biggest complaint is the President has come out of this looking weak. He can't go campaign about jobs because when he signs this bill, he will be signing against jobs and casting all the unemployed people to the wind. He's got 15 months to change that, but he's caused himself to be playing from a disadvantage. He's painted himself as a Centrist. If I were an Independent looking for a Centrist, I'd vote for Romney not Obama.
The President, in this situation, was weak. He had zero good options available, and little leverage.
The real threat, at least as far as the economy is concerned, is not default. It's downgrading the bond rating. As Suranis pointed out from his own country's first hand experience, a downgrade has a huge impact on interest rates. How many US homeowners are barely able to make the monthly payments on their ARMs as it stands now? How many Americans barely have their head above water with their credit card debt? If the national credit rating is downgraded, is there any realistic chance that the prime rate isn't going to go up?
There were three basic options left available to the President as of yesterday. Option 1 - going past tomorrow without increasing the debt ceiling - would have resulted in a partial government shutdown for an indefinite period of time coupled with an all-but-certain downgrade. Option 2 - invoking the 14th or other justifications and ignoring Congress - would have avoided the shutdown, but I can't see how it would have made a downgrade any less likely. Option 3 - give in enough to get Congress to raise the limit past 2012 - avoids a shutdown and has the best potential for avoiding a downgrade.
Of those three options, I think the third is the one that is probably going to cause the least damage to the economy.
It sucks, but as long as the Teahadists were willing to strike a match in a crowded, gas filled room, I can't see what other real choice he had. The whole "don't negotiate with hostage takers" thing sounds good in theory, but only up until the point where it's obvious that the hostage is definitely going to get blown away. I think we were at that point. I don't think the lunatics on the right were bluffing, and I do think they had it in their power to take us past tomorrow without raising the limit.