Yet another manufactured crisis is upon the federal government. There is a lot of information to sift through, but here are three truths to guide us:
1. The austere budget cuts are what the Republicans want. In August 2011, the Republican/Tea Party Congress held the nation's economy hostage and President Obama had to agree to the possibility of "sequestration" in order to get Republicans to keep the government functioning that year.
2. The media says that both sides are unwilling to compromise. What this really means, though, is that Republicans are unwilling to raise taxes on the rich. The compromise Republicans and "very serious people" want from President Obama is cutting medicare and social security. Since most of us aren't rich, it would be natural for most of us to want the Republicans to cave and not President Obama. But even more fundamentally, Congress could just repeal the "sequester." So please contact your representative and senators and urged them to do so.
3. Republicans did not agree to raise taxes during the January 2013 "fiscal cliff" compromise. They simply agreed to reinstate the Bush tax cuts for everyone except for those earning more than $400-450K per year. They also agreed not to continue the Obama payroll tax cuts that had reduced working peoples' taxes by 2% from 2010-2012.
The current mess stems from the Republicans' unconscionable tactic of refusing to raise the debt ceiling, which is usually done routinely. The tactic often used is to raise the debt ceiling with as few congressional votes as possible, allowing as many members of Congress to speak out against it as possible (including then-Senator Obama in 2006), but to always raise the debt ceiling nonetheless. Not to do so, or to even seriously threaten not to do so, results in slower or halting economic growth and potentially higher interest rates on federal government borrowing. (The conspiracy theorist in me thinks the latter is what Republicans want, so their investor-class constituency can earn higher interest rates.)
P.S. The U.S. budget deficit has been declining steeply under President Obama, but only 6% of the country knows this:
At the same time, the size and trajectory of the U.S. deficit is poorly understood by most Americans, with 62 percent saying it’s getting bigger, 28 percent saying it’s staying about the same this year, and just 6 percent saying it’s shrinking. The Congressional Budget Office reported Feb. 6 that the federal budget deficit is getting smaller, falling to $845 billion this year -- the first time in five years that the gap between taxes and spending will be less than $1 trillion.
Americans Back Spending-Cut Delay Amid Budget-Deal Push
Bloomberg February 21, 2013