Jacob Lew is the Secretary of the United States Treasury. He is sitting in front of a senate committee today and explaining to them what will happen if congress doesn't approve raising the debt ceiling.
One of the things he will say is if guys like John Boehner, Ted Cruz, and the rest of the tea party hacks stall on the debt ceiling like they have on the government operating budget the treasury cannot guarantee payments to any group the United States owes money to after October 17th. That is why about 1.4 billion Chinese are sweating bullets right now. Mr. Lew is talking about people who own government bonds and they've got a bunch of them in Beijing.
While the idea of putting the screws to the Chinese economy might sound like fun to more than a few people, there are other, more familiar, groups the feds owe money to and they are home grown. To begin with we're talking about everyone who receives medicare, medicaid, social security, and veteran's benefits. According to CNN, in 2012, 36 million retirees were receiving social security checks and another 20 million people received benefits either because they are widowed, disabled, or dependents of disabled Americans. Right now veteran benefits are collected by 5.1 million people. That number includes 433,000 fully disabled vets and 360,000 spouses and kids of combat vets.
Of course there are a few republicans in congress who think going belly up would be a good thing. John Fleming of Louisiana was quoted as saying, "(of economist who predict a fiscal disaster) many times they're wrong, so I don't think we should run the government based on economic predictions." Florida republican Ted Yoho said, "I think personally it would bring stability to world markets." Yoho has, in the past, compared his fight against the Affordable Care Act to the 1960s civil rights movement. Finally our old pal Tom Coburn from right here in Oklahoma goes both Fleming and Yoho one better. He simply says, "there is no debt ceiling." Despite that denial, when it comes to America defaulting on loans he claims he would, "rather have a managed catastrophe now." Before Representative Yoho became an elected official he was a large animal veterinarian. Both Fleming and Coburn were M.D.s. In other words, the three of them were trained to stick their fingers up the asses of a various species of mammals, but not in economics, or even history.
The brothers Koch up in Wichita, KS, however, have a little knowledge in those areas. After spending untold millions trying unsuccessfully to unseat Barack Obama and then whip up the troops into the current anti Affordable Care Act frenzy, it has suddenly dawned on them the financial future of the United States of America is quickly starting to circle the drain. They sent a letter to the members of congress, claiming they had nothing to do with linking the passage of the new budget to defunding the Affordable Care Act. This is rather like Al Capone telling Eliot Ness, hell I was in Miami on St. Valentine's Day. Beyond that despicable denial, the rest of the letter basically said, we don't care about the ACA any more, just don't let the government default. Yes, they aren't buying Tommy Coburn's sunny prediction that even though the market will fall, it will rise again once everything straightens out. That sort of thinking didn't work when Herbert Hoover decided to ignore the Great Depression as if it wasn't happening. It won't work now either and the Kochs are fully aware of it.
In 2011 we came close to this same precipice. U.S. credit was downgraded and it cost taxpayers an additional $19 billion, because the downgrade increased borrowing costs. In addition it is estimated close to a million jobs were lost. Think of the money and jobs that will go poof if we actually do go down the black hole next week.
At this moment John Boehner claims he is willing to temporarily raise the debt ceiling for anywhere from six to eight weeks. The Obama people are calling the action "encouraging," but are waiting to see if any partisan strings are attached. They still insist there will be no negotiating on either the debt ceiling or the budget unless both are clean of republican demands about health care. The extension Boehner is proposing doesn't have anything to do with the passage of a new budget, which the speaker claims is still linked to either a delay of, or major alterations to the Affordable Care Act.
We're a week away. Odds are there will be a short term raising of the debt ceiling, while budget wrangling continues. Boehner knows it is one thing to piss off 800,000 federal workers and fuck the families of a few dead soldiers, but when you potentially cut off pensions and medical benefits to tens of millions of senior citizens and military veterans, you are poking an uncaged tiger in the side with a sharp stick--and you can be assured that particular snarling beast will turn and eat you alive.
The situation is, as they say, fluid. The GOP is fragmenting as I type. Loose cannons are rolling around the decks like bumper cars run amok. Ralph Reed, Paul Ryan, the Heritage Action people, they all have different axes to grind.
Stay tuned. It isn't every day you see an industrialized nation fall apart at the seams.
And just remember, it all came about because the GOP hates Obama so much they're willing to burn down the entire republic rather than accept his signature piece of legislation.
The words petty and irresponsible don't seem quite epic enough to describe their actions.
We're not done with the brute nonsense yet, therefore I urge you, with all my heart, to, carpe vinum.