The Republicans got everything they wanted from the Debt Deal

A debt deal has been struck and the winner is the Tea Party. The losers are Democrats, the economy, and the American people. Democrats and the President will try to say that it was a compromise and that both sides gave some and got some. Its not true, but they can’t very well get up in front of the cameras and say “this is a terrible, terrible deal which no one should support but for the fact that if we don’t vote for it, something even worse will happen.” That something worse would have a been a US government default, which would have pummeled the stock market, pushed banks under, tanked the value of the dollar, kept doctors, social security recipients or government employees from being paid and caused the interest rate to skyrocket on any kind of loan, be it a for a car, mortgage or on a credit card. In short, everyone in the United States had a ton to lose from a default. Everyone. There is not a single person who would have gained a thing in a US government default. But why was this disaster even a possibility? Its worth recounting how we got to this point.

Congress has been deficit spending since Clinton was President and every time you deficit spend, you have to increase the debt limit.  This time around, Republicans said they wanted to deficit spend without increasing the debt limit. They basically said “Woah, if you want us to keep the government from defaulting on the debt that we already voted for, you’re going to have to jump through a bunch of hoops and meet all of our demands.”

Republicans demanded a dollar in spending cuts for every dollar the debt limit would be increased. And they got it. Well, what about the fact that the main driver of our debt is  the tax cuts passed under George W. Bush? And how about the fact that domestic spending hasn’t even grown since 2001? Doesn’t matter, Republicans said that they wanted spending cuts, so they got spending cuts. The package agreed to will push back domestic discretionary spending to where it was under Dwight Eisenhower, (according to Pres. Obama) DWIGHT EISENHOWER! So we are going back to a level of domestic spending that existed back when there were no Pell Grants, no EPA, no interstate highway network to maintain, no Head Start program. We are supposed to run a post-industrial government with a budget from the Korean War period? That’s insanity.

What did Democrats get out of the deal? As any Republican will tell you, they got an increase in the debt ceiling as their prize. That’s right. Democrats got to protect the American people from a complete economic collapse. Stopping the Republicans from starting another Great Depression was their prize. This was a hostage situation in every meaning of the phrase. Republicans threatened to kill the hostage–they said they would cause an economic meltdown that would make 2008 look like Candyland unless all their demands were met. In the end, Democrats showed that they cared too much about the American economy to let the Republicans fulfill their threat. In a saner time, a political party who threatened to cause a US default for their own ideological ends, who used the health of the US economy as a bargaining chip, would never again be entrusted with any power by the American people. These are not sane times.

There you have it then. The only reason Democrats will vote for this package is because they do not want the US economy to implode. There is literally nothing in it for them to like. The richest Americans are not asked to pay a bit more to solve a crisis that their tax cuts largely created while Medicare, Medicaid and Social Security will likely be shrunk in the next round of cuts. All of the cuts come from the poor and middle class. Democrats’ only motivation to vote for this deal is to protect the American people from Republican recklessness. Republicans will vote for it because its everything they could have ever asked for. Some Republicans will still withhold their vote because they have decided that nothing less than a balanced budget amendment can win their vote. Those Republicans are even more ideological than the rest. They hate the government and they will never make any compromise for the good of the country.

Speaking of the good of the country, these cuts will slow down the economy and might even push us back into recession, if last quarter’s GDP numbers are any indication. A dollar less in government spending is a dollar less in the economy and there’s about to be a whole lot fewer dollars in the economy. These cuts come at a terrible time for the economy. The right time to make cuts is when the economy is already gorwing at a healthy pace, not when doing so will throw the economy back into recession.

God help us if Obama loses re-election. If he doesn’t win the election and end the Bush tax cuts once and for all, Republicans will just keep cutting until there is no more social safety net in America.

For more reading on the size of the GOP’s win here, look at this article.

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