the Constitutiution and the debt ceiling

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But every government debt is embodied in a law originated in the House of Representatives so the amount of debt can be dug out of the congressional record.

ruveyn

Liberals are already destroying the economy. Sometimes some tough love is the way to dig out of a problem.

What are you talking about? Not only is the fed audited, but the audit reports are published. They are on the website for all to see.

You are not aware that things could be FAR WORSE if people like you had their way entirely. Looks like people haven't learned from history. Why support absurd liquidationist BS unless you want to deliberately cause suffering?

The problem with your "tough love" is that it isn't directed in the right place. Why do the poorest deserve to be punished the hardest? What the f**k did they do?

The conspiracy-minded part of me has been wondering whether Republicans have been deliberately trying to wreck the economy in order to improve their chances in the next presidential election; now it's going to be wondering whether they want to wreck the economy for its own sake.

Addressing your example, those with unemployment benefits are almost by definition not among the "poorest". Only a minority of unemployed have unemployment benefits; truly poor people, when they find work, generally work in jobs with no unemployment insurance.

Unemployment benefits are generally there to allow middle class people to stay middle class while they are betwen jobs, not there to help poor people.

Senate Minority leader McConnell has been clear on that point. The number one priority of himself and his party, he said, is the defeat of Obama in 2012. The answer therefore is yes.

Boehner will go make a deal. He has to face voters and why would he bet his career on an unknown like national default? If things get really bad, he'll fall too in 2012. He'd be one of the public faces of it.

The unknowns could skate, not the leaders.

Idiotic statements like that are why McConnell is still minority leader rather than majority leader. Most Republicans are more interested in fixing the problems the Democrats caused, and frankly would be fine with a situation like Clinton's second term, where Clinton quit interfering with the sensible economic policies espoused by Republicans in the legislature.

Sensible policies such as giving boards of directors more powers over shareholders and repealing Glass-Stegall? Clinton's second term with Gingrich was a time when many of the problems were caused. The only reason that period has a good reputation is because Greenspan was not so inflexible in implementing NAIRU targets but Americans can thank in part the financial crises of the late '90s that forced him to abandon NAIRU targets completely at that time. Otherwise the unemployment rate would have been forced over 5%, if not over 6%.

Sensible policies such as limiting government expenditures, leading to an actual surplus for once, and fixing some of the most egregious problems with welfare policy. Repealing Glass Steagall was a mistake, but it was passed on strong bipartisan votes, 90-8 in the senate and 362-57 in the house, not as part of Gingrich's initiatives. And frankly, neither party has since pushed for its reinstatement, unfortunately.

Actually, the surpluses were mostly caused by Greenspan choosing not to fight too hard to adhere to the NAIRU unemployment rate targets. This was caused in part by financial crises abroad and with the threatened implosion of a hedge fund. If not for that there would have been significantly less tax revenue and significantly more social expenditures.

While I think Greenspan did a good job of focusing on inflation rates and ignoring unemployment rates, the Federal Reserve has no control over fiscal policies, and most congresses would still have managed spend enough to maintain a large deficit. The Gingrich house's spending restraint was absolutely needed to keep deficits in check, let alone actually run a surplus in the late 1990s.

Unemployment rates and deficits are very closely linked. High unemployment increases deficits. Greenspan in the late 1990s was forced by financial crises to ignore NAIRU targets this caused unemployment rates to drop way below NAIRU and this cut the deficits. Otherwise he would have fought for the NAIRU targets keeping unemployment over 6% possibly with large interest rate hikes.

There remained a serious problem however. Though increases in employment meant that wages rose at the highest levels since the beginning of the Neoliberal Era and this caused upset at the top , the damage from neoliberalism was not completely reversed and the system depended too much on private debt to maintain demand. Attempts to balance the budget also increased private debt which is linked to the recession that struck in 2001.

Remember the three sectors - private, public and trade. If there is a trade deficit, then public and private together must run a deficit. If the public is in surplus, the private must run a large deficit. That means lots of debt.

FFS.
http://www.salon.com/news/budget_showdo ... l_security

Greenspan in his two decades of statements as Federal Reserve chairman, starting all the way back under Reagan, almost never mentioned targeting unemployment. He always mentioned inflation. The truth is, as a monetarist, he didn't buy into worrying about unemployment much at all. He certainly didn't pay as much attention to "NAIRU" as you do.

Bernanke, in contrast, pays way too much attention to unemployment, believing he can do something about it despite having no control over fiscal policy.

The fact is, the Fed can do little about unemployment. The Fed's been pumping huge amounts of money into the economy for nearly a year now in what's termed Quantitative Easing II, but the result has been that unemployment rates - except for a brief drop right after the Bush tax rates were extended - have remained steady. The extra money has only resulted in more inflation, not less unemployment.

That is exacerbated by Obama's profligate spending. Obama's spending eats up new private saving, leaving nothing for private investment. No investment means no new jobs and continued high unemployment.

Getting back to the topic of the thread, what's needed is drastic reductions in federal spending. That will free up capital for private investment and job creation. Only then will most of the people who have been thrown out of work be able to find jobs again.

It would have been great if Obama had agreed to those major cuts - including the necessary cuts in entitlements, since they make up the majority of federal spending - in the 2011 budget deals. Unfortunately Obama gave up virtually nothing, protecting special interest spending every step of the way.

That means that more cuts are necessary now - and they need to be big ones. If Obama is willing to make them now, that's great. If not, then using the debt limit to force him to make them is the next best solution.