Sunday, July 3, 2011

A Harbinger of Things To Come

Take a good look at the picture below. That’s the Minnesota state capital building in St. Paul. You’ll notice the building looks dark, indicating there is no one inside. You’ll also notice a throng of people outside, some holding various signs of protest.

In case you haven’t heard, Minnesota’s government has been shut down for five days because Democratic Governor Mark Dayton and GOP leaders have been unable to come up with a compromise to resolve the state’s budget problems. Basically Dayton wanted a tax increase on the top income earners to reduce the $5 billion deficit, while the Republican-controlled legislature balked. Sound familiar?

While Minnesota is the first state to actually “shutdown” its government, its problems mirror to a T what is currently going on in Washington. Don’t look now but August 2nd is just a month away. On that date, the Treasury department will no longer be able to jury rig payments on the nation’s debt, as it has been doing since May 16th. Barring a rise in the ceiling, the United States will officially default on its obligations. In that event it won’t merely be a shutdown that occurs, but a catastrophe.

Since conservatives worship at the alter of Ronald Reagan, and love to quote him, I thought I would share with you his thoughts on such a prospect as default. In a letter to then Senate Majority leader Howard Baker, Reagan wrote the following:

“The full consequence of a default – or even the serious prospect of default – by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar.”

Loathe though I am to agree with anything Ronald Reagan said, in this instance he couldn't have been more correct, or sane for that matter.  But now we come to the crux of the matter: sanity.

In an op-ed piece in the Washington Monthly, titled “It’s Reagan’s Party No More,” Steve Benen writes, “Republicans should simply realize that raising the debt ceiling is the sane thing to do and act accordingly. But given Republicans’ religious reverence for ‘Ronaldus Magnus,’ it’s worth appreciating the extent to which today’s GOP is deliberately turning its back on the Reagan legacy.”

Benen goes on to quote Mike Huckabee and Senator Lindsey Graham who have gone on record as saying that the Gipper “would have a very difficult, if not impossible, time being nominated in this atmosphere.” What does it say when a conservative as staunch as Reagan couldn’t even win the nomination of today’s Republican Party? What it says to me is that we are not dealing with rational people here.

And that’s why I am very pessimistic about next month. The usual posturing that occurs in these debates, contentious and divisive though they may be, has historically been nothing more than a show of theatrics for the faithful, followed by the inevitable compromise that leads to an agreement. It’s called “give and take” and no matter how partisan the actors were, at the end of the day, sanity prevailed and tragedy was avoided.

Not this time. I fear we are headed for a train wreck. This isn’t some continuing resolution we are talking about; this is doomsday incarnate. If we are fortunate, we will only slide into a deep recession. If not, well let’s just say the 1930s weren’t that bad after all. This is what happens when you let children play with matches.

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