Right Thinking From The Left Coast
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Tuesday, January 04, 2011

The First Two Fights

The GOP is currently pushing hard on two issues that have the potential to blow up quickly.  In the end, however, I think this will be a tempest in a teapot compared to the larger and more substantive fights coming.  Most of this is just for show.

First, the GOP is hinting that they will not raise the debt ceiling until a budget deal is reached.  Given that we are closing in on that debt ceiling, this could end up with a government shut-down or a default on the debt.  The latter is tempting to a lot of GOPers, notably Michelle Bachamnn.  But I have to agree with Goolsbee.  Failing to raise the debt ceiling and defaulting on the debt would be an economic catastrophe—the equivalent of the federal reserve’s pursuit of deflationary policies in the early days of the depression.  If you think credit markets are uncertain now, just wait until $14 trillion suddenly becomes uncertain.

That having been said, I think the GOP will extend the debt ceiling.  They’re not that stupid.  But I agree that it should be part and parcel with serious movement on the deficit.  The recent tax cut has the made the issue all the more urgent.  We’re caught between two catastrophes—one where we don’t extend the debt ceiling and have a debt crisis and where we do extend it and have a debt crisis.  The only way out is to get control of spending and that starts with the next budget.

The second fight is a push to repeal Obamacare, a vote on which Boehner has scheduled for January 12.  While it’s a nice gesture, I have to agree, for once, with Boortz.  This would be a mistake.  Such a law would never pass the Senate (or Obama’s desk) but would allow the Democrats to demonize the Republicans by pointing out the popular provisions (pre-existing conditions, the donut hole) that would be immediately impacted.  It’s a lose-lose.  The same goes double for efforts to “defund” the program.  Not only would it fail to pass and give the Democrats a political issue, it would give the Democrats an excuse for the failure of the program.

A better strategy, as Boortz notes, would be to start putting in place the elements of real healthcare reform.  Open up inter-state insurance markets (if the Democrats are going to claim insurance is interstate commerce, why don’t we, you know, make it interstate commerce?).  Allow major medical to qualify.  Move to sever the employer-insurance link.  Stop the special dispensations being given out to politically-powerful businesses.

It’s time to govern, guys.  We don’t have time for gestures.

Posted by Hal_10000 on 01/04/11 at 08:16 AM in Politics   Law, & Economics  • (0) TrackbacksPermalink
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