Bachmann: Even Hypothetical Cuts Are Fake

During the Iowa GOP debate the other night the candidates were asked a hypothetical question on whether they would accept a debt reduction bill if it was setup so that it included a 10 to 1 cut to tax increase ratio. Everyone on the stage being the good tea bagging suckups that they are, raised their hands to say that they wouldn’t

Yesterday during an interview with Fox’s Chris Wallace, Michele Bachmann was asked to explain why she wouldn’t agree to such a debit deal that would in theory be a big win for the GOP:

WALLACE: Let’s go back to that moment in the debate, though, when you — and I’ve got to say, all the other candidates on that stage said that you would walk away from a debt deal, here it is right here, $10 in real spending cuts, to $1 in revenue increases. 10-1. Even Reagan’s top economic adviser, Marty Feldstein, said that is too hard-line, that that would be walking away from a huge conservative victory.

BACHMANN: Well, I think probably Reagan would be the best example, because Reagan was going to get $3 in spending cuts for every $1 in tax increases. It ended up being $3 in tax increases for every $1 in spending cuts. That’s the way it works in D.C. The deal sounds so rosy in the very beginning, and usually the cuts are illusory, they are off into future years. And of course one Congress can’t bind the next Congress, and a Congress lasts for two years. So we can’t bind what future Congresses can do. We can beat our chests and be really proud and say, oh, we’re going to cut trillions of dollars, but we can’t guarantee what future Congresses will do. That’s why no one would take that deal on the Fox stage of the debate, because we all know that they’re fake cuts, essentially. They sound good. They’re soundbites, but they are not real.

Yep, that’s right, Bachmann said she wouldn’t vote for a hypothetical debt deal that might take a few dollars from the rich in the form of higher taxes because the cuts would be fake, you know the hypothetical cuts that weren’t even specified!

The Koch brothers have her trained well don’t they?

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McConnell Admits Holding Debt Ceiling Negotiations Hostage

Not that we already didn’t know this but Senate Minority Leader Mitch McConnell goes on record and admits that the GOP held the debt ceiling negotiations hostage in order to get their agenda shoved down our throats and doesn’t rule out doing it again.

But at the Capitol, behind the four doors and the three receptionists and the police guard, McConnell said he could imagine doing this again.

“I think some of our members may have thought the default issue was a hostage you might take a chance at shooting,” he said. “Most of us didn’t think that. What we did learn is this — it’s a hostage that’s worth ransoming. And it focuses the Congress on something that must be done.”

[Washington Post]

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S&P Agency Chief Has Literary Degree And No Economics Background

I am not really sure what to make of this but I do find it interesting that the chief of sovereign ratings at Standard and Poor’s, John Chambers, has a masters in English Literature but never studied economics.

Mr Chambers, the chairman of S&P’s sovereign ratings committee, has come under scrutiny himself since the downgrade.

Political observers have noted that he never studied economics and that he majored in literature and philosophy and has a master’s in English literature.

I would assume that he has an office full of economic egg heads working under him but in the wake of the reported 2 trillion dollar mistake in the S&P’s calculations it does make one stop and think doesn’t it?

But then again many in Congress don’t have economic backgrounds either and they set our fiscal policy…

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S&P Decision Maker Explains Why He Lowered US Credit Rating

John Chambers of Standard & Poor’s discusses why the decision was made to lower US credit rating.

I especially think this statement by Chambers when asked what was behind his decision is quite telling:

Well, I think there were two reasons. The first reason is the one that you have outlined, being our view of the political settings in the United States have been altered. We have taken them down a notch, the rating down a notch. The political brinkmanship we saw over raising the debt ceiling was something that was really beyond our expectations, the U.S. government getting to the last day before they had cash management problems.

And to further pound this point home Anderson Cooper asked him again:

COOPER: So it’s interesting. You’re saying without a doubt, the recent debate, the recent roadblocks in Congress, the tenor, the timing, the tone of the debate had a major impact on this.

CHAMBERS: Yes.

With Chambers’ comments in mind I just have one question. Who was it that installed the roadblocks and set set the tenor and tone of the debates again?

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Boehner: I Got 98% Of What I Wanted

While Standard & Poor’s was contemplating and eventually lowering the US credit rating for the first time in history because of our politician’s failures to properly address the situation, Republican House leader John Boehner was telling us that he got 98% of what he wanted from the debt ceiling bill that eventually led to the credit downgrade.

When you look at this final agreement that we came to with the white House, I got 98 percent of what I wanted. I’m pretty happy.

Once again from the S&P:

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

So Mr Speaker was the downgrade part of the 2% you didn’t get or the 98% you did especially in light of Senator Mitch McConnell’s well publicized comments on how the GOP’s single most important mission was to ensure Barack Obama was a one term president?

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S&P Downgrades US Credit Rating

Reuters is reporting that Standard & Poor’s is downgrading the credit rating for the US from AAA to AA+ with the agency also saying that it might not be done and could lower it once again in the next 12 to 18 months.

The United States lost its top-notch AAA credit rating from Standard & Poor’s on Friday, in a dramatic reversal of fortune for the world’s largest economy.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

ABC News is also reporting that major reasons for the downgrade include Congress’s holding the debt ceiling negotiations hostage for political gain as well as the GOP’s refusal to accept any tax increases that could be used to help offset the mounting debt.

Official reasons given, one official says, will be the political confusion surrounding the process of raising the debt ceiling, and lack of confidence that the political system will be able to agree to more deficit reduction. A source says Republicans saying that they refuse to accept any tax increases as part of a larger deal will be part of the reason cited.

Next time you see your adjustable rate mortgage or credit card interest rate jump due to the higher cost of borrowing make sure you thank your local tea party member.

UPDATE: Standard and Poor’s statement regarding the credit downgrade.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

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