Full faith and credit and showdownarama 2013

[cheesehead]

Originally Posted by ewmayer

OTOH, maybe they simply stole the idea from him. Thieving bastards!

Haven't you previously railed against cherrypicking? Now it's all right?

I took the modest time to read some of the commentary on this 2006 quote. I notice that almost all of those articles omit details of the context ... which differed from what we have now. They just make the facile contrast of a few sentences of the 2006 speech with his position now. But at least one article did explain some context beyond the mere few speech lines thrown around by others.

Originally Posted by http://www.huffingtonpost.com/2013/10/10/obama-debt-ceiling_n_4079604.html

. . .

Now contemporary critics of Obama point to this speech as an example of hypocrisy, a charge that might stick if they weren't all rushing to take the position that Obama took in 2006! Nevertheless, one question any rational critic of this position might ask, is, "Why did everyone just wave away this objectively stupid speech at the time he made it?"

That's a fair question. What I can tell you about this particular period in our political life is that back then, it was sort of a silly tradition for members of the party out of power to give stupid grandstanding speeches whenever the need to raise the debt ceiling arose, and a few, like Obama, cast symbolic votes against doing so. Mind you, these "no" votes were calibrated in such a way that they'd not impede the passage of a clean debt ceiling hike.

And that's why the speech got ignored. I won't say that it was a "more innocent time," but it was a time that provided for a controlled release of this kind of stupidity for the sole purpose of scoring a few easy political points. It's sort of cheap, bush league stuff, but as Yglesias points out, Obama wasn't trying to stage a hostage crisis that pushed America to a brink, like today's House Republicans are:

To use a technical term, what Obama's doing here is bullshitting. The debt ceiling bill has majority support in both houses and is clearly going to pass. Rather than doing the right thing and voting "yes," Obama has decided to make a "no" vote and then deliver a speech denouncing George W. Bush's fiscal policy. But he's not organizing a filibuster. The fact that the bill passed the Senate 52-48 is a huge tell. Nothing passes the Senate with 52 votes if the minority party is actually trying to stop it from passing. Obama didn't demand the partial repeal of the Bush tax cuts as the price for his debt ceiling vote because he didn't demand anything as his price for his debt ceiling vote. There was no negotiation, no demand, no effort to block passage, and actually no effort to do anything at all. It was just a forum for silly speeches.

Had Democrats forced a government shutdown in 2006 at the time of the debt ceiling vote?

No.

Did Democrats force a government shutdown in 2006 at all?

No.

How extreme were Democratic demands?

Actually -- none. They never seriously threatened to block a debt ceiling increase, carefully making sure that there would be enough votes to approve it, while taking the traditional opportunity to simply make a bit of noise with a few speeches by first-term senators and representatives. Not at all like Tea Partiers now.

Did Democrats allow a "clean" debt ceiling bill to come on the floor for a vote?

Yes.

If Tea Partiers "stole the idea", where is the part where they don't force a shutdown, where they don't use the debt ceiling for blackmail, and where they allow a "clean" vote right away after a couple of speeches?

[cheesehead]

Originally Posted by Fusion_power

While I agree that this would resolve the issue, may I point out that this is just another take from the rich, give to the poor solution. The way SS is set up now, anyone making above $100,000 per year will contribute more to SS than they can draw back out unless they live at least 88 years. Between employer and personal SS taxes, this person will have paid in excess of $650,000 dollars into SS by the time he is 67 years old. At the probable monthly payout of $2500, that gives 260 months or about 21 years to get back what was paid in. That does not allow for any interest which if the money was invested even at just 3%, would total over 1 million dollars by retirement at 67.

So, quid pro quo, removing caps is just a robin hood solution.

I agree. Raising the cap on FICA deductions is not a proper way to address Social Security finances.

I support lowering SS benefit payments by enough to get the trust fund to survive the forecast Baby Boomer bulge problem. (That "enough" could have been a very small percentage if it had been done in the 1960s/1970s when the future problem was recognized, but not enough politicians would support that simple solution then.)

Originally Posted by Fusion_power

If I were arguing against it, I would have used a much different statement. But since you bring up the subject, why should someone pay into SS many times over the amount they can ever possibly draw out?

We all know that Social Security was never set up to be actuarially sound or individually fair over the long run. Furthermore, trying to transition it to be more sound (other than by fiddling with the FICA rates) and individually fair would be messy, as we've seen.

[ewmayer]

Originally Posted by cheesehead

Haven't you previously railed against cherrypicking? Now it's all right?

Touchy, touchy, my humorless partisan friend.

I took the modest time to read some of the commentary on this 2006 quote. I notice that almost all of those articles omit details of the context ... which differed from what we have now. They just make the facile contrast of a few sentences of the 2006 speech with his position now. But at least one article did explain some context beyond the mere few speech lines thrown around by others.
[snip]

So let's be clear what the upshot of your and chalsall's "helpful context providing" pieces are:

o When senator/candidate Obama says something on a major policy issue which is so inane or so violently opposite to that which he now does or espouses as president, it is "silly" or "naive";

o When senator/candidate Obama casts a vote on a major policy issue which is so inane or so violently opposite to that which he now does or espouses as president, it is "symbolic" and "obviously there was nothing really at stake".

And, do you think that a US Senator - not some local-yokel, but a bona fide "highest legislative position in the land" holder - who so gravely misunderstands absolutely crucial issues is qualified to be president? You really think "full faith and credit" is some issue where such incredible "silliness" is remotely compatible to in-a-few-short-years holding the highest office in the land?

Moreover, Obama is a degreed constitutional law expert - how many major amendments has been caught "being silly about" now?

---------------------------

One question I would like to throw out there not-just-for-the-rabid-partisans, because it really underpins the whole debt-related debate:

Do you believe there is any credible scenario under which the US ever repays-in-kind (that is, not in massively-depreciated "new dollars" which constitute a negative real return) any appreciable fraction of its current greater-than-100%-of GDP debt? If so, please describe.

Remember, to pay down debt without engaging in the old "quiet depreciation default" ruse, the US must not only swing from running massive deficits to running actual surpluses, and moreover must run not only surpluses in excess of interest costs, but do so under an interest rate regime more typical of a strong - and I mean long-term-structurally-strong, not "bubble strong" - surplus-generating economy than the allegedly "just until the crisis is well behind us" ZIRP environment we have at present.

[Fusion_power]

Debt paydown? No. It will never happen. What will happen is an ongoing game like musical chairs where eventually the music will stop playing and anyone who has not been paid loses.

The "depreciation via inflation" currently being used will at some point turn from a snowball into an avalanche that overwhelms all in its path.

So am I sitting on the edge of my seat about the debt ceiling? No way. They will work it out at the last possible moment. Will they re-start government? You betcha, there is already a groundswell of public opprobrium against all current members of congress that will force this to be done.

[cheesehead]

Originally Posted by ewmayer

So let's be clear

(Readers: your clue that he's not even trying to present a legitimate argument in response)

what the upshot of your and chalsall's "helpful context providing" pieces are:

(Sure enough, he trots out three strawmen in succession)

o When senator/candidate Obama says something on a major policy issue which is so inane or so violently opposite to that which he now does or espouses as president, it is "silly" or "naive";

(Just a strawman distortion, not any attempt to be honest)

o When senator/candidate Obama casts a vote on a major policy issue which is so inane or so violently opposite to that which he now does or espouses as president, it is "symbolic" and "obviously there was nothing really at stake".

(ditto)

And, do you think that a US Senator - not some local-yokel, but a bona fide "highest legislative position in the land" holder - who so gravely misunderstands absolutely crucial issues is qualified to be president? You really think "full faith and credit" is some issue where such incredible "silliness" is remotely compatible to in-a-few-short-years holding the highest office in the land?

(ditto)

- - -

Folks,

Note that Ernst continues to pretend that I am excessively partisan, because he desperately needs to discredit my interference (e.g. pointing-out his rhetorical trickery and errors in logic) with his verbal manipulations.

Originally Posted by ewmayer

Touchy, touchy, my humorless partisan friend.

< snip >

not-just-for-the-rabid-partisans

< snip >

[kladner]

Originally Posted by cheesehead

(Readers: your clue that he's not even trying to present a legitimate argument in response)

[snip]
Note that Ernst continues to pretend that I am excessively partisan, because he desperately needs to discredit my interference (e.g. pointing-out his rhetorical trickery and errors in logic) with his verbal manipulations.

I hate to get in the middle of this, but I have to say that Cheesehead pointing out a previous position:
"Haven't you previously railed against cherrypicking? Now it's all right?"

seems to be different from the (seeming) response from Ernst:
"Touchy, touchy, my humorless partisan friend."

First off, there are characterizations and name calling in the latter. Agreed that "railed" (in the former) has a certain implication. However, "humorless" and "partisan" both carry implied judgements, and the "my.....friend" construction is outright condescending.

I would point out, that calling another a "partisan" really implies a corresponding partisanship in the caller, even if the intent is to suggest some higher, non-partisan logic. It seems that there is a demanding attraction which this game holds. I do not hold either side innocent, but I am seeing more personal digs from one than the other.

Let it be said that while I am more likely to agree with Cheesehead's positions on many things, I am not a blind follower. When there is talk of cuts to Social Security without raising or removing the caps you've lost me, Richard.

Before it got renamed as an Entitlement, Social Security was referred to as an insurance program. In insurance programs, some always pay in more than they get back, and some pay less. That is the nature of distributed risk. Further, there is the whole issue of Greater Good. Again, economic stimulation is most effective at the bottom of the ladder, but it benefits everyone right up to the top. The same cannot be said for the concentration of wealth, no matter what Supply Siders have claimed for many decades.

Now if "fairness" is going to be a standard, as in, "it's unfair to expect the better off to pay more toward the General Welfare, the Greater Good," then let's start by seeing to it that states get back what they pay into the Federal government. Let California, Illinois, and New York reap the full benefits of their contributions; and let Mississippi, Arkansas, Georgia, and the Carolinas exercise their States' Rights at their natural economic level, however impoverished.

There's a reason I don't often mix it up in this area. I mostly don't have the patience for the detailed parsing, and I tend toward a more symbolic mode of expression, anyway. I also don't need the outright irritation which these arguments seem to engender. However, once in a while I will drop in my observations. I do not, in the least commit to specific responses. I can't afford to care too much what other parties think of this approach. Call it what you will. I do not accept that the game has to be played by others' rules. There is not so much adherence to Robert's Rules of Order in any case. I am sure, in their hearts of hearts, that my Esteemed Colleagues understand this.

Gotta move on. Later.

[rogue]

Originally Posted by cheesehead

I agree. Raising the cap on FICA deductions is not a proper way to address Social Security finances.

I support lowering SS benefit payments by enough to get the trust fund to survive the forecast Baby Boomer bulge problem. (That "enough" could have been a very small percentage if it had been done in the 1960s/1970s when the future problem was recognized, but not enough politicians would support that simple solution then.)

What about raising the age before one is able to collect full benefits?

[ewmayer]

Originally Posted by kladner

I would point out, that calling another a "partisan" really implies a corresponding partisanship in the caller

So following your logic ... calling someone a racist makes one a racist, calling someone a criminal makes one a criminal, &c. Hmmm...

--------------------------

Denninger offers a pretty good list of Lies And Truths About The Budget today, which takes all of the involved parties to task and also the MSM, for accepting unquestioningly the "if we do not have a debt ceiling deal by data X, the government will default". Quite simply false. Yes, absent a fresh monetization initiative using the Fed - and I suspect this would in fact be the plan B absent a debt-ceiling deal - the government would be faced with the sudden necessity to live within its means. For an entity this addicted to deficit spending, that is a harsh cold-turkey-withdrawal scenario, to be sure.

-------------------------

Some assorted thoughts on the social security subdiscussion:

o I would gladly support reasonable measures to render SS more solvent, but only if they are accompanied by legal changes which disallow the government from using SS (and Medicare, and the other smaller government-administered trust funds) as EZ-borrowing slush funds and thus evade the requirements of fiscal prudence even more egregiously than it has been doing with the "official debt". In fact the current structure of SS appears to provide a perverse incentive for government borrowing, because the SS trust fund is "...required by law to be invested in non-marketable securities issued and guaranteed by the 'full faith and credit' of the federal government."

o The aforementioned Fed-engineered ZIRP policies have a major effect on the actuarial soundness of programs like SS, as well as virtually all retirment programs, public and private. And the sorry fact is, even after 5 years of ZIRP with no end remotely in sight, virtually all such programs *still* massively overestimate "historic returns" in their actuarial models.

o Oh, and those "special nonmarketable debt isntrument" IOUs the government replaces the cash in the SS fund with? The general assumption is that to repay these borrowings, the Treasury "simply" needs to repay-with-cash-surplus, or lacking such extra monies (i.e. "in the real world"), needs to issue an amount of public debt (i.w. marketable government debt) equivalent to the borrowed funds plus any accrued interest. In that sense, one might conclude that "trust fund borrowings are just public debt in disguise". But given that the government has racked up around $5 Tln of such debt in total, such redemption is very likely much easier said than done.

[kladner]

Originally Posted by ewmayer

So following your logic ... calling someone a racist makes one a racist, calling someone a criminal makes one a criminal, &c. Hmmm...

Those are not corresponding categories. Partisan implies some opposition. Opposition to criminality or racism does not mean "same as."

[cheesehead]

Originally Posted by rogue

What about raising the age before one is able to collect full benefits?

Oh, yes, that would be even more appropriate IMO -- perhaps the single most appropriate SocSec change I recall seeing proposed.

Americans, on average, are able to healthily work years longer now than when Social Security was started, so part of its original premise should, logically, have already led to a gradual increase in eligibility age over the decades since the 1930s. Of course, such increases have been put into law now, but way too late to have been as effective as they would have been if done, say, three-four decades earlier.

[cheesehead]

Originally Posted by ewmayer

Denninger offers a pretty good list of Lies And Truths About The Budget today

But you don't point out any of Denninger's mistakes, not even what looks elementary.

for accepting unquestioningly the "if we do not have a debt ceiling deal by data X, the government will default". Quite simply false.

No, that is not false.

Right away you fail to point out Denninger's elementary mistake in the very first point (Denninger's list's fourth item) you choose to address.

Let's peruse the first three items in the Merriam-Webster definition of default:

1 : failure to do something required by duty or law : neglect

2 archaic : fault

3 : a failure to pay financial debts

Failure to make a payment of bond interest (or principal) is not the only type of financial default. Failure to pay a bill presented in accordance with contract, such as from a civilian supplier on the other end of a government contract, is also a type of default. Failure to make payments required by law, such as Social Security retirement or disability benefits, is also a type of default.

Denninger says:

The government takes in roughly 10 times as much tax revenue in a given month as it must pay in interest.

But he doesn't mention that the treasury is legally obligated to pay far more than just the interest on bonds.

Now, let's go back to the first item on Denninger's list. He starts mixing up things right there.

The Democrats have presented a coherent plan; the Republicans are obstructing. Lie. The Constitution says that all revenue bills must originate in The House.

Note Denninger's switcheroo: segueing from "presented a coherent plan" to originating revenue bills in the House!

It's quite possible for Democrats, even only the Senate Democrats, to present a "coherent plan" for a revenue bill to be originated in the House. Of course, the Senate Democrats can't originate such a bill, and the House Democrats are blocked by Boehner from doing so, but the statement that Denninger calls a "lie" doesn't claim that the Democrats have originated a bill in the House. There's no "lie" involved there.

The Senate's role is one of concurrence; it is not able to (lawfully) initiate spending.

But the statement Denninger calls a "lie" never says anything about initiating a spending bill in the Senate.

There are also errors or misleading implications in Denninger's second, sixth, and eighth list items, at least, in addition to the first and fourth.