Streetwise Professor

July 31, 2011

Hitting the Ceiling

Filed under: Economics,Politics — The Professor @ 7:51 pm

Today would have been Milton Friedman’s 99th birthday.  His son, David, said something today about the debt ceiling circus that I’m sure his father would agree with:

Reading Google News, I am struck by the degree to which dramatic stories crowd out arguably more important material. The top of the page is dominated by the current U.S. debt limit crisis. It is an entertaining example of the game of Chicken as played by politicians but of limited importance otherwise, since both sides are focused not on how to deal with the long term debt problem but on the terms on which they will agree to postpone dealing with it.

Exactly.  The “both sides” remark is perfectly justified, although there are exceptions on one side.  The problem is that too many of those who are serious about tackling the problem are tactically inept and hasty, and those who are tactically canny and patient are not all that serious about tackling the problem.

Beldar also is worth reading at his splenetic best:

I refuse to watch “Meet the Press” — I’d rather be waterboarded [amen!]— but if NRO’s Katrina Trinko accurately quotes former Obama campaign manager and current White House Senior Advisor David Plouffe’s statement on that program today, I’m appalled:

White House senior adviser David Plouffe emphasized that the White House is unwilling to accept any deal that does not provide a long-term debt ceiling hike.

“This debt ceiling cloud has harmed our economy. Why on earth would we want to go through this again in the next few months?” Plouffe said on Meet the Press.

Got that? It’s not the spending that’s the problem, it’s the limit on government borrowing to finance more government spending that’s hurting the economy, according to Plouffe. Having a statutory limit on the amount of money the government can borrow — even a limit that can be raised by another mere statute, at the behest of simple majorities of House and Senate plus presidential signature — is “harm[ful] to our economy,” according to the Obama Administration.

Obama and his party are obviously entirely content to go years without any budget, and now they’re bitching about having any debt ceiling, any maximum amount on the national credit card.

. . . .

The danger is not merely that they’re clueless. The danger is that they’re still actively and passionately devoted to exactly that which has gotten us into this mess. They are completely unrepentant; they will neither act responsibly nor accept responsibility. And they will keep making things worse until they’re out of office, be that in January 2013 or, heavens forbid, January 2017.

This is the strongest argument yet for a constitutional amendment requiring a balanced budget. [Emphasis in original.]

I’m not big on a Balanced Budget Amendment, but with all its flaws, it has much to recommend it as compared to the alternative–which we see acted out in living color every damn day.

Another amen! moment from Beldar:

I’m already at toxic levels in my exposure to Plouffe for one day. I need a shower.

The dose makes the poison, they say.  With Plouffe, a picosecond’s exposure will do.

Beldar notes that something I mentioned in last night’s post is today’s talking point: specifically, the attempt to construct a narrative in which the debt ceiling standoff is the cause of the bad economy–which has been sputtering for nigh-on to a year (remember that QE2 was mooted about a year ago due to miserable economic signs), well before the debt ceiling became a major bone of contention.

Obama’s National Economic Council Director Gene Sperling was equally mendacious on Fox News Sunday.

It is creepy to watch a propaganda machine cranking up.

Speaking of machines, while doing my daily mad-dog midday walk in the St. Louis sun, I was thinking today that considerable blame for what is going on now can be attributed to one mechanical invention: air conditioning.  There is no way such a tortuous process would have dragged on so long if the legislators and executive branch people had to broil in the midsummer heat of DC.  That would be far more a sobering a prospect to those types than a looming default.

So, to fix our politics, break the air conditioning.

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  1. Good post and very funny but to consider Houston now without air conditioning is painful.

    I still think a good solution would be to give California to China and call it even-steven.

    Comment by pahoben — August 1, 2011 @ 6:56 am

  2. I heard a good sound bite from Alan Simpson over the weekend and it was something like the following-

    “My goodness $14 trillion the universe is only 14 billion years old”.

    I guess the debt can now be termed cosmological having far surpassed astronomical.

    Comment by pahoben — August 1, 2011 @ 7:13 am

  3. Plus uncountable benefits we would be rid of Boxer, Feinstein, Pelosi, and I guess Supreme Oblivion.

    Comment by pahoben — August 1, 2011 @ 8:44 am

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