This is no time for jack-in-the-box economics — or Republican leaders downplaying our alarming condition.
Last week, President Obama told ABC’s George Stephanopoulos that “we don’t have an immediate crisis in terms of debt.” It was par for the course (after all, he is almost always golfing) for the nation’s chief executive who just last year did not know the amount of our nation’s debt and made the preposterously naive statement that “a lot of it we owe to ourselves.”
Apparently, our coming debt crisis is the only one Democrats do want to go to waste.
On Sunday, with the same “moderator” who is perhaps ABC’s most effective Democrat operative, Speaker of the House John Boehner (R-OH) offered a distinction without a difference, saying that “We do not have an immediate debt crisis.… But we all know that we have one looming.” It was an unnecessary gift to the Democrat messaging machine, as liberals predictably highlighted only the first half of Boehner’s statement.
For example, Rachel Maddow’s blog on MSNBC.com chirped happily that “Boehner agrees: there is no debt crisis.” And Colorado’s own radical leftist, David Sirota, writing for Salon, helpfully suggests, “GOP: We’ve been lying all along.” Sirota, not known for intellectual honesty or even an 8th-grade understanding of economics, did not mention Boehner’s “looming” comment; at least Maddow’s contributor did. When you’re even less honest than an MSNBC blogger, that’s quite a dubious accomplishment.
Boehner’s statement seemed to be part of a coordinate Republican plan when House Budget Committee Chairman Paul Ryan (R-WI) said something similar on CBS’s Face the Nation on Sunday: “So we do not have a debt crisis right now. But, we see it coming. We know it’s irrefutably happening. And the point we’re trying to make with our budget is, let’s get ahead of this problem.”
Ryan, like Boehner, is mostly correct but making a political mistake by framing the debt issue with statements that the left will parse to stand on their own as arguments against budget cuts. On the liberal website Politicususa.com, for example, a blogger wrote that “Paul Ryan Trashes His Own Budget By Admitting That There is No Debt Crisis.” (Clearly the writer took a lesson from the Clinton school on the definition of “is.”)
That note had 2,700 Facebook “likes” by Monday morning. Most of those will circulate within a liberal bubble where people already believe the worst of any Republican (such as this doozy). But if such messages reach even a few hundred undecided or moderate or independent voters, it is damaging for Republican electoral and policy prospects, and more importantly for the prospects of nudging the few moderate Senate Democrats (or at least Democrats from purple or red states who are seeking reelection) toward accepting a better rather than worse federal budget.
In addition to lessening political pressure from constituents, it gives those Democrats – who would love to find a way to go along with Harry Reid and President Obama – a talking point: “Hey, even Paul Ryan thinks we don’t have a serious problem today.”
A better answer is: Greece didn’t think they had a crisis – until they did. Same for Spain and Italy. A crisis is generally caused by financial markets no longer having enough faith in the ability of a debtor to pay its bills. That threshold level of lack of faith – a level that can never be known in advance – is breached with little notice and little apparent immediate provocation, causing jarring financial turmoil. If Democrats don’t care about the economic consequences of their lack of economic concern, they should at least care about its likely fatal impact on their careers.
A debt crisis works like a child’s jack-in-the-box: the government keeps turning the crank, never knowing just when the box will pop open. Indeed, especially among Democrats, many seem not to know that it eventually must. And like children, politicians around the world routinely seem surprised when the pop happens.
Even Marxists recognized this, with Georg Hegel writing in 1832 that “peoples and governments never have learned anything from history, or acted on principles deduced from it.” Yet I still suggest, despite the closed-mindedness of our current president, that history is worth a look and that, as Twain reminded us, even if history doesn’t precisely repeat, it rhymes.
The first chart is three years of data of the Greek government’s 10-year bond yield. (Charts from Bloomberg.com)
Greece is the most extreme example, with interest rates spiking from 15 percent to 35 percent during their crisis, before drifting down to about 11 percent today. But the calm nature of the recent trading in Greek debt masks tremendous damage done during the crisis and the period when it was only “looming.”
In January 2011, Greek unemployment was an already painfully high 15 percent, having gone up from about 7 percent in late 2008 to 10 percent in January 2010 and drifting slowly up from there. From January to July 2011, it crept up to about 17 percent and then, during their debt crisis, jumped to over 21 percent by January 2012. However, unlike interest rates which settled down and stabilized at modest levels, Greek unemployment – and thus Greek national misery – kept climbing to about 26 percent, where it has remained since the third quarter of 2012.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online