Cantor is the Grown-Up in the Room
By Steven Osborne | Saturday, July 16th, 2011 | Politics, VirginiaHarry Reid recently called Eric Cantor “childish” over the debt ceiling debate. However, it is becoming increasingly clear that Cantor may be one of the few grown-ups in the room.
On the National Review Online, Robert Costa has written an article detailing some of the recent discussions surrounding increasing the debt ceiling. Clearly, the President and his Democratic cohorts are still stuck in the antiquated idea that raising taxes automatically raises revenue. This viewpoint is incredibly short sighted when one considers that when the government taxes the big, bad rich; the poorest and most in need Americans are usually hurt the most. As a matter of fact, there are instances where raising taxes could actually decrease the overall revenue taken in.
The only way for the country to avoid default is for the President and his Democratic allies to “eat their peas” and support spending cuts with no additional tax burden on the American people. That would be the grown-up thing to do.
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Steven Osborne is a grassroots conservative activist from Central Virginia. He is currently furthering his education at Liberty University in Lynchburg, Virginia. In addition to writing for Bearing Drift he is also a columnist for the Christian Law Journal.
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39 Responses to "Cantor is the Grown-Up in the Room"
Steve, those Grover Norquist thugs threatened you and your family and made you post this heresy, right?
SO,
Cantor is childish in the sense that he is acting like a schoolboy with political thugs. I don’t think they care about the revenue. You are selling leftist cunning short. The first thing they want is to destroy the Repubs the way they did with Bush41. The second thing is reinforce the notion that the government knows best how to distribute income and should take it forcibly through coercion and demagoguery. They will steadily move towards the notion that all money will be issued by the government to the subjects as they see fit(see the UK for the memo). This is why they could care less that 401ks and home values are shrinking.
Who gave Grover so much influence? Norquist is part of what is wrong with the GOP today.
The extremism of the republican party has now become a fixture on the political landscape. This extremism is devoid of reason, based simply on ideology, and totally divorced from rational political and economic reality. The fact that posters herein have drunk this kool aid and seem to really believe it is bizarre at best, crazy at worst. Cantor’s effort to protect the rich and the wealthy at the expense of the rest of us will devestate our nation if he is allowed to prevail.
The extremism of the Democratic party has now become a fixture on the political landscape. This extremism is devoid of reason, based simply on ideology, and totally divorced from rational political and economic reality. The fact that posters herein have drunk this kool aid and seem to really believe it is bizarre at best, crazy at worst.
Obama’s effort to protect the cronies on Wall Street, giving bonuses to AIG and Fannie Mae and letting GE pay no taxes at the expense of the rest of us will devastate our nation if he is allowed to prevail.
Didn’t President obama walk out of one of the meetings? And I heard Harry was calling people names. that’s pretty childish. The pot calling the kettle black?
“when the government taxes the big, bad rich; the poorest and most in need Americans are usually hurt the most”
-That is a bunch of BS. Can you show any shred of evidence, and number, statistics, anything?
Actually, what hurts the poorest and most in need Americans are cutting the government services on which they depend. When raising revenues is off the table, and defense spending is off the table, then the services which they depend upon are cut and they are most hurt this way, not the wealthy who are getting tax cuts.
While the discussion goes on who is right and who is wrong just because of ideological loyalty and posturing for the 2012 election, this delay in a meaningful solution is the only “childishness” being exhibited. As we move into the 2nd quarter companies in the S&P index are forecast to show a 6.5 percent rise in profits over the second quarter of 2010 when all the reports are in.
Yet, the overhang from the debt ceiling issue could diminish the focus on earnings. Investors, frustrated by the lack of progress in the debate, could move into what are perceived as safer assets, such as cash.
Current GDP, at 2%, could could further be reduced irrespective of the methodology of seeking increasing governmental revenue. The most productive way to shrink the overall debt is by increasing GDP.
As of yet, a serious deficit plan has not been placed on the table, underscoring the acrimony in negotiations to avert a government default. The longer the debt ceiling question continues without a conclusion, the bigger the risk for further declines in stocks and for volatility to spike.
At juncture, the only “childishness” that has been exhibited is by Cantor and Boehner.
Wally says “The most productive way to shrink the overall debt is by increasing GDP.” Hard to argue with that unless you are a leftist.
But then he says in the same post “As of yet, a serious deficit plan has not been placed on the table …At juncture (sic), the only “childishness” that has been exhibited is by Cantor and Boehner.”
This is the poster child for why the Repubs have been idiots to get into the Biden talks etc. The Repubs pass a budget (whether you like it is beside the point). The Dems have not passed a budget in 2 and a half years. Dems specify $2 billion cuts in a $1.6 trillion deficit. Obama’s budget is voted down 97-0 and you have Dems saying something as ridiculous as the above.
valentinus is quite fond of labeling ideology with opinion and that the pendulum stops at either the left or right irrespective of the infinite number of points on the pendulum’s swing. Currently, fiscal responsibility and economic health at this extreme is beyond in-depth major surgery and a bandage is appropriate. The seriousness of the Aug 2 deadline seems to escape those that condone astringent negotiations.
Wally Erb,
In your previous comment you stated:
“Investors, frustrated by the lack of progress in the debate, could move into what are perceived as safer assets, such as cash.”
I know I cashed out. I’m just getting my business started and I could not afford the risk of losses in the stock market. Hopefully I will not need the cash, but I needed the safe cushion to rely on.
If I listened to guys like Tim J, instead of keeping the cash in reserve I would be investing in weapons and ammunition to protect myself against the potential unpleasantness that guys like him are trying make happen.
By the way Wally, you got my vote in the last election. In private conversations, I was criticized for having done so. I am heartened to see at least some things coming from you recently that provides proof my vote might not have been so awful.
Little David:
I understand your dilemma and financial apprehension. I myself and still hopeful that sober judgement will prevail and there will be resolution to a raise, if only temporary, to the debt ceiling. However, rather than a cash position, I have bought August put options to secure my holdings. My only fear, is there will be more contracts than stock available.
The most striking aspect of the deficit / debt ceiling debates is the fear contained in the arguments used, how fear being used as a weapon, and how fear makes us think.
Everyone is desperately trying to figure out how they can hang on to what they’ve got. As such, the arguments are backward-looking and not forward. What everyone really wants in any crisis is a return to “the way things were.” Thus, this kind of thinking is endemic to our public and even private discussions today. It is on display everywhere you look. Our fear of the future makes us pine for the past.
What no one will accept is that the past was unsustainable. An economy that is leveraged at “merely” 50:1 can be blown over by any black swan. And it was. Yet, no one will believe that it is unstable until it collapses. Everyone wants to believe that life is easier than it truly is. Everyone wants to believe that there’s enough money out there that they can start a business selling two pounds of sh*t in a one pound bag and earn a good living. And then, when it finally does collapse, what does everyone want? To return to the good old days.
“Can’t we just re-lever up and get back to the party?” “If we just tinker just a bit here and there, can’t we get back to the party?”
Absent any serious and structural changes, absent any break from the paradigms that brought us to this precipice, we will continue on our present course and drive right over the cliff. We cannot afford to pay people to do nothing. Decades of our apparently getting away with it, all because of a credit bubble that I have very thoroughly and carefully documented here and many other places, will make people continue to believe we can, right up until the point where the system collapses from trying to do so. So be it.
At one time I was certain of it. I was surprised by the recent poll that showed that a majority of Americans oppose raising the debt ceiling. It’s a start. Of course, the statist progressives like Obummer merely reply that the average person is too stupid to participate in the debate.
Yes Wally makes great sense. All along, the basic issue facing us as a nation is to reduce the rate of growth of expenditures (including entitlement reform), increase revenue, not rates, by tax reform on tax breaks that are simply not needed, and by targeted investments that stimulate quality growth and help increase GDP. As Wally points out, capital is on the sidelines, which is the worse place for it to be, but this self inflicted paranoia being pursued by the far right has paralyzed those who would create jobs if we had a functioning political system. The Norquist Party could care less if we default, knowing that the President will then need to inflict misery on the American public by withholding entitlements, paychecks, transfer payments to state and local governments, which is exactly what private businesses are worried about. But make no mistake about it; this is the most perilous policy pursued by Norquist and his minions, and the most dastardly way to “cut the arms and legs off government so it can be drowned in a bathtub.” Using default to create enforced extreme austerity, civil unrest, and financial ruin for millions of americans is simply not american at all.
@ Jamie Jacoby:
I can see that there is a clear difference how we approach the validity of this Republic. I didn’t support nor vote for President Obama. Very rarely will a support a Democrat. However, I recognize that President Obama is the selected leader of this country by popular and electoral vote, and as such, I pledge my allegiance to my country. I don’t necessarily agree with all the views of the President, but I would not defame nor show disrespect to the exalted office he was awarded by fellow Americans. Representative Cantor’s junkyard dog approach to continually interrupt the President during negotiations not only does he disrespect the choice of the American people, but he is predetermined not to negotiate nor courteously hear the President’s proposals.
At this juncture, I see the President Obama as trying to solve a situation and Representative trying to score a win.
Correction: “At this juncture, I see the President Obama as trying to solve a situation and Representative Cantor trying to score a win.”
Proverbs 23:9
Do not speak in the hearing of a fool, for he will despise the good sense of your words.
LD, you forgot food storage and pre-1965 silver coins. And you also missed that I was presenting a “novel” about the doom, gloom and negativity tactics you guys are using to scare the crap out of old people and the masses. You have lined up your villains in this melodrama including Norquist and Cantor and are in lockstep with the rest Democrats and your exalted leader who vilifies anyone and everyone who doesn’t agree.
Hey, slap a real, no-kidding plan down on the table that you will own up to and defend, and then play poker rather than taking cheap pot shots at the cards that the Republicans are stupid enough to continue to deal. Yeah… a for real, no kidding plan that can be printed on “green” paper and that can be published on the Democratic Debt Plan website. Not a speech, not a blog, not news articles and interviews with friendly media surrogates, not attacks and demagoguery of competing plans already presented to the people, not he-said – she-said innuendo in smoke –filled backroom discussions, not political talking points that deflect and divert the discussion to the shadowy Norquist Boogie man, but something real that can be scored by the CBO.
Wally,
You show respect where none is due. You seem to indicate your willingness to politely go along with the will of the masses, even when their will is to bleed you dry. I cannot fathom what might motivate you to do so.
I refuse to show respect for a system that shows none for me. That is especially true of a system that is supposed to serve me by protecting me from force and fraud, but instead has become both the largest perpetrator of force and fraud against me, and the greatest protector of those other connected special interests who also perpetrate force and fraud against me (Wall Street).
As for Cantor’s junkyard dog approach, I question the validity of any such reports. I seriously doubt Cantor has the cahones to confront a carnival barker.
It is a twisted world we live in when living with a balanced budget is “extreme” and “radical”. Most children are able to figure out that they can’t spend money they don’t have, it is only the spoiled children who have grown up with overly indulgent parents who don’t know such basic rules. That’s where we are, living with cry babies who are throwing a tantrum because the adults are laying down some law in place of all of the crazy nonsense that has been going on for far too long. Austerity is where it’s at, no use complaining about it, in fact, it is counter-productive to get upset about it because some of us find the tears and tantrums wildly entertaining and it only encourages us to seek more spending cuts //grin//. The important thing is for the adults to let the children know that the situation is serious this time, and let the kids have their tantrum so that they can get it out of their system. The more spending that gets cut, the easier it will become to make future cuts. Resistance is futile, and given the circumstances even infantile.
Tea party activists are angry for a reason. The GOP lost touch with their formerly passive base and now they expect to rehabilitate a party that keeps insisting its just the opposition to the democratic party driving up the debt. Freedom and liberty are not safe from these rascals.. the question is when will enough of us realize is and stop being good little republicans who vote for the candidate that the party elite puts forth.
Oh please, cut the baloney. A policy of extreme enforced austerity, should it be adopted through our legislative process, and signed by the President, would become the policy of the nation. By for one half of one branch, that is, the House of Represetatives, to effectively hold the nation hostage to its view through failing in its duty to honor existing obligations, then in my view, they have performed a coup, an illegal transfer of power in a democratic society. Now most do not believe this will happen, but just the threat of it reveals the extreme steps a minority will take to enforce its views on the rest of us. Frankly, by elevating their oath to Grover Norquist over their oath of office, they have by their own actions condemned themselves as unamerican.
“‘Republican’ no longer connotes smaller government, more freedom, less intrusion in our personal lives and a more vibrant economy…‘Republican’ today more likely connotes — even for those who tend to vote for the party — incompetence, corruption, compromise, betrayal…They have squandered the greatest historic opportunity to rein in unconstitutional government in Washington since the War Between the States…Maybe Americans will understand there is no national salvation to be found in one political party or the other. Maybe they will begin to understand that we are not supposed to be a people ruled by elitists in Washington.”
http://www.wnd.com/news/article.asp?ARTICLE_ID=48208
Mike wrote, “By for one half of one branch, that is, the House of Represetatives[sic], to effectively hold the nation hostage to its view through failing in its duty to honor existing obligations, then in my view, they have performed a coup, an illegal transfer of power in a democratic society.”
I appreciate the sentiment, but in a subtle way what you just wrote is like saying that if the President leads the troops it is one branch of government leading the military, and that’s not Democracy. Except that it is, because that’s what the Executive Branch is supposed to do. And so it is with Congress, the House of Representatives has the power to create Appropriations bills, and the Senate can then amend them, but Appropriations bills are not supposed to be created in the Senate. The Executive Branch is not supposed to have a part in it at all, that’s why the “Foreign Assistance Act of 1974″ effectively ended the Vietnam war, Congress just stopped paying for it.
Somebody correct me if that isn’t right.
The one thing I can not understand is how does failing to raise the debt limit result in Social Security checks not going out?
Brian,
Of course, it does not necessarily mean that. It merely forces Congress to choose what it wants to pay for, and what it does not want to pay for. We have plenty of revenue to perform debt service; this undeniably means there is no default. The “default” scenarios are based on not paying “obligations,” by way of conflating “obligations” with “coupon payments on Treasuries” and “Re-Funding Rolled Treasury Securities.” If Harry Reid and Barack Obama choose not to send out Social Security checks, they will have the opportunity to advocate and defend that choice.
Well Jamie, your advice would be accurate except for one thing; the rating agencies that opined that even if the nation pays its debt service, that default will have technically occured if the U.S. cannot meet it appropriated obligations. So the current republican effort to create a balanced budget simply by not agreeing to pay past obligations will create default as well. Frankly in my view, if they so act, in other words, honor their oath to Grover Norquist over their oath of office, they will have engaged in a coup, and ought to be removed from office for dereliction of duty.
But I thought Social Security was paid by FICA taxes, not through debt.
Cut appropriations
I agree with James Cohen.
Whatever the wording might be, the spirit of the thing is that Congress has the power of the purse, not the President. If Congress doesn’t want to keep the lights on they can turn them off, that’s one of their powers, the President, the Treasury Secretary, the Federal Reserve Bank, etc, might not like it but that’s just how it is. Enumerated powers, the Constitution, it means something.
@ Brian
The Social Security program is financed primarily through taxes, which are deposited in the U.S. Treasury and credited to the Social Security trust fund. Any revenues credited to the trust fund in excess of the costs (benefit payments and administrative costs) are invested in special U.S. obligations (debt instruments of the U.S. government).
The Social Security trust fund represents funds dedicated to pay current and future Social Security benefits. However, it is useful to view the trust fund in two ways: (1) as the balance of an internal federal accounting concept, and (2) as the accumulated holdings of the Social Security program.
For internal accounting purposes, certain accounts within the U.S. Treasury are designated by law as trust funds in order to properly track revenues dedicated to certain purposes (or expenditures). There are a number of trust funds in the U.S. Treasury including those for Social Security, Medicare, unemployment compensation, and federal employee retirement. The monies in the Social Security trust fund in the U.S. Treasury are owned by the U.S. government, which can (by changing the law) raise or lower revenues to the trust fund, or payments from the trust fund.
It is hard to keep track of the position of the Norquist Party as it is both attacked and supported herein. But it is of little matter to me as the republicans in the House are attemting a coup because they have placed their oath to Norquist ahead of their oath to carry out their duties to the nation. By failing to act, they are effectively negating the fairly legislated obligations of the United States by fiat of one branch of Congress. This is unprecendented and borders on the unmentionable. To me, raising that possibility as a negotiating tactic is reprehensible enough and even when the ceiling is raised, these members of Congress has shown themselves to be unfit for office.
Brian Kirwin,
Social Security is supposed to be a separate trust fund. But I thought federal fuel taxes went into the highway trust fund? If transportation cuts are on the table, why isn’t Social Security?
I will admit that the Social Security trust fund has bonds to draw down on while the federal highway trust fund has been subsidized from the general fund. However if we are going to cut back on the minimum level of spending on highway maintenance and construction below the level of revenues guaranteed to the trust fund?
Perhaps it is going to come down to a Supreme Court decision on the meaning of the clause contained in the 14th Amendment: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
Are debts (and revenues received) authorized by law required to be paid to the trust funds during times when total revenue for all expenditures required by law exceed revenues authorized by law?
I guess these finer points of law argued before judges is why some lawyers make so much money.
@Brian.
After rereading my post, I didn’t specifically answer your query. President Obama’s warning was perfectly appropriate. After Aug. 2, the Treasury will be forced to operate on a daily cash flow basis: Each day, it can spend only what it collects that day.
Wally, that sounds like a quick way to get a balanced budget with no delay and the messy business of having a bunch of states having to approve it. I say we take it for a test drive and see how it works.
Tim J:
Unfortunately, default ramifications and consequences will in fact raise taxes due to the inevitable increase in interest rates. Alternately, of the five options for averting default, Senator McDonnell’s Senate proposal will most likely be invoked. It will require a two-thirds majority in the House to render a defeat. The votes aren’t there.
You show me one instance where Eric Cantor voted AGAINST raising the debt ceiling during his tenure in Congress and I just might call him a grown-up.
So Wally, what you are saying…”default ramifications and consequences will in fact raise taxes due to the inevitable increase in interest rates.” is a win-win for both sides. The Democrats get their tax raise and the Republicans get cuts and a balanced spending.
Things change fast, and Cantor has gone from the leader of the coup to a has been in about two weeks. Now that experienced senior leadership has shown the way, Cantor has ben shown to be simply an opportunist, one who tried to take advantage, and now his extremism will need to go back on hold. Of course I never thought he was the grown up in the room, just a guy not yet ready for prime time.
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