GOP to Press for Social Agenda in Debt Ceiling Negotiations
by Charles Lemos, Thu Apr 21, 2011 at 06:03:37 AM EDT
One day after being named to a presidential task force to negotiate deficit reduction, House Majority Leader Eric Cantor fired off a stark warning to Democrats that the GOP “will not grant their request for a debt limit increase” without major spending cuts or budget process reforms.
The Virginia Republican’s missive is a clear escalation in the long-running Washington spending war, with no less than the full faith and credit of the United States hanging in the balance.
In the most recent budget battle — over a six-month spending bill — Republican leaders carefully avoided threatening to shut down the government. Now, Cantor says he’s ready to plunge the nation into default if the GOP’s demands are not met. People close to Cantor say that he hopes to make clear that small concessions from Democrats, including President Barack Obama, will not be enough to deliver the GOP on a debt increase.
You can rest assured when the GOP talks about "major spending cuts," they really mean elimination of the social safety net of programs like Social Security, Medicare/Medicaid, and Unemployment Insurance that the American Liberal Republic of 1933 through 1969 had the foresight to enact. Major spending cuts is GOP-speak for the repeal of the 20th Century.
The Republicans are playing a dangerous and irresponsible game that will have global repercussions should the debt ceiling not be authorized. It is seems bizarre but today's GOP seems so willingly ready to collapse the global economy to test economic theories that were discredited repeatedly throughout the Age of Economic Liberalism, the 115 year period from 1815 through 1929 that saw the rise of industrial capitalism and laissez-faire state.
Financial panics struck the global economy in 1819, 1837, 1857, 1873, 1894, 1907, and 1929. It was only through the financial regulations and the social insurance programs that began to be enacted in response of the last of these great crises that the modern world took shape. This world has been under threat since the rise of Reaganism but not even Ronald Reagan was foolish enough to risk a collapse of the established world order.
The argument to "just let markets function" assumes political stability and social peace. But a system where the gains are concentrated among a few winners, as they have been in the US now for 30 years, won't remain stable. The experience of Latin America has been very clear. In periods where there is a narrowing of social inequality, there has been marked social peace and cohesion. But when the region flirted with either laissez-faire capitalism or its bastardized descendent of neo-liberalism, the region has convulsed.
Buckle up, we're in for a bumpy ride.