The single most interesting point about today’s “debt ceiling” debate is that over the 10-year forecast horizon that frames for the entire discussion, there is simply no fiscal problem by any conventional definition.  In 2021, the US will likely have a small primary surplus at the federal level – meaning that the budget, before interest payments, will no longer be in deficit.

The really bad budget numbers for the US come after 2021 – but these are not the focus of anyone’s current proposals on Capitol Hill.  Compared with other countries, it is the increase in health care spending, 2010-30, that will ruin us ...

The debate in Washington DC is fraught not because anyone is grappling with the difficult issue of how to control health care costs.  Rather the tea party wing of the Republican party is intent on insisting on near term government spending cuts, as a condition of supporting any increase in the debt ceiling.

It seems increasingly likely that some version of this libertarian tax revolt will carry the day. The resulting fiscal contraction will slow the economy and result in fewer jobs being created.  It does nothing directly to address the looming budget issues beyond 2021 – there is no “down payment” on the table, just measures that are tangential to rising health care costs.
 

As someone who understands the pressures and difficulties you have been going through, I want to say, “Congratulations.” You won, and so did the country.

Absent some major miscalculations, within the next few days there will be official acknowledgement of what has already happened.

At the beginning of the debt-ceiling debate, a realistic, optimistic outcome essentially would have been this: The Republicans would take the initiative and put their plan before the American people. The debt-ceiling increase would be accompanied by corresponding spending cuts. There would be no new taxes. You would drive a hard bargain in the face of unrelenting presidential and Democratic demagoguery — some of it on national television — drawing the attention and focus of the American people to the truth about our country’s fiscal and economic situation. Sure, people would initially ask, “Why are the Republicans now willing to take this thing to the wire when a debt-limit increase has usually been pro forma?” But at the end of the day, more Americans than ever before would understand what is going to happen to us as a country if we continue our current path.

In this optimistic scenario, President Obama’s duplicity would become apparent, and he’d be politically diminished as a result. With his eyes firmly fixed on his own reelection, his political journey would take him from first, calling for a budget with billions in new spending, to second, demanding a “clean” debt-limit bill with no cuts, to third, a proposal for a “big deal,” including vague promises of trillions in spending cuts, to fourth — in order to ensure that such a deal was never accepted — making a demand for billions in additional “revenues” over and above what he previously agreed to accept.

Still, you would stand firm. The president would have miscalculated, a strategic blunder that, along with his petulance, left him marginalized. Obama would make a transparent scramble to get back to the head of the parade. There would be last-minute plans and rejections, but, at the end of the day, the president and the Senate Democrats would reveal that they are willing to do almost anything to push the debt-ceiling limit past the next election, thereby avoiding having to face the electorate again on this issue.

My friends, within the next few days, all of this will have happened. I respectfully suggest that you rake in your chips, stuff them in your pockets, and tell the dealer to deal the next hand.

continued....

From Robert Borosage, this morning.

Ezra Klein, from the NY Times today, linked to at WashPost online.

Here's a good one to share with all your Tea Party/GOP BFFs and acquaintances railing about "Obama's deficits", letting them know you don't recall hearing them say anything about the debt when Bush was in office and the Republicans controlled both houses of Congress.  

It's a good day for America as gay couples in NYC line up to marry.

I am so very happy for them, and for us all. As one of the participants said, "love wins out!"

• Hong Kong: $121.9 billion (0.9 percent)
• Caribbean banking centers: $148.3 (1 percent)
• Taiwan: $153.4 billion (1.1 percent)
• Brazil: $211.4 billion (1.5 percent)
• Oil exporting countries: $229.8 billion (1.6 percent)
• Mutual funds: $300.5 billion (2 percent)
• Commercial banks: $301.8 billion (2.1 percent)
• State, local and federal retirement funds: $320.9 billion (2.2 percent)
• Money market mutual funds: $337.7 billion (2.4 percent)
• United Kingdom: $346.5 billion (2.4 percent)
• Private pension funds: $504.7 billion (3.5 percent)
• State and local governments: $506.1 billion (3.5 percent)
• Japan: $912.4 billion (6.4 percent)
• U.S. households: $959.4 billion (6.6 percent)
• China: $1.16 trillion (8 percent)
• The U.S. Treasury: $1.63 trillion (11.3 percent)
• Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion.

"So reads a headline from this morning's Washington Times, and while it does me no good within the 'vast right-wing conspiracy', I am inclined to agree with them, though the Devil as they say, is in the details.  What Larry Korb, John Podesta and Barney Frank all have in common (besides presenting a pretty reliable bellwether of what NOT to do on most things) is that they approach DoD as if it were an ATM, sitting there chock full or money just waiting to subsidize the rest of the economy.  Their collective desires to denude DoD of nearly $1 trillion spring not from a sense of what is best for the national defense of the US strategically, but primarily from the standpoint of how to find money within the existing discretionary budget to keep from making real choices on entitlements.

How then, do I agree with them?  Well, I believe that a roughly $600B base budget for defense is unquestionably too much.  How can I say this?  Because I watch the sausage get made, and I see the inefficiency.  Not Bob Gates inefficiency, mind you, where bureaucrats chase around overhead reductions that invariably will have to be reversed at some point--but inefficiency born of cowardice.  And in this case, it is cowardice wrapped in the fuzzy mantle of 'Jointness', wherein as long as no service deigns to make its case more loudly than the others, none has to make any really tough choices.  And as long as the Services aren't making noise, OSD doesn't have to referee any unseemly behavior.

Yes indeed--there's a conspiracy of silence at work in the Pentagon, an omerta-like code that promotes unity above strategy, duplication above decision, and conformity above economy."

[hat tip to The Dish which includes this graph:]

After five car-free years, I am finally considering buying a vehicle. But which kind of car is best for the planet?

Yeah, yeah, I am well aware of the fact that the most environmentally sound decision would be to not buy any car at all. But there are some things that bikes just can't do. They can't haul big stuff (though I've schlepped some impressive-sized things on my bike). And the bike can't get me to North Carolina or New Jersey, the respective native lands of my partner and me, unless we plan a few extra days of travel. And while I like living in Washington, DC, I do occasionally want to get out and see a tree or two.

I've gotten conflicting reports about whether it's better to invest in a hybrid or opt for an extremely fuel-efficient conventional auto instead. It's not an easy question to answer, since much depends on your driving habits, where you live, and what kind of money you have. The sticker price of most hybrids is still a major barrier—I work at a nonprofit magazine and my partner is an academic, so a $10,000-plus difference is significant to us. And most of our car trips are longer ones, meaning we wouldn't see quite as much advantage from a hybrid as people who use it to commute daily in a relatively small area.

Everyone is entitled to opinions. But facts are facts. And [Arthur Brisbane] the public editor’s column about our June 26 story on shale gas economics gets many of them wrong. As a result, the column’s conclusions are, quite simply, misguided and unsupported.

The column said, for example, that our story needed “more convincing substantiation.” What this ignores is the data we assessed from over 9,000 wells, the S.E.C. document review of two dozen companies, and the dozens of industry emails we published. It overlooks the several dozen interviews with experts we conducted, the several-hundred page online document reader and a follow-up story with dozens more emails and documents from federal regulators echoing industry concerns. It would be tough to find a news organization that has explored these financial issues more thoroughly and documented them more extensively.

The column claims that our story needed “more space for a reasoned explanation of the other side.” And yet our story directly quotes eight pro-industry voices and includes input from over a dozen more in the online document readers, with detailed annotations. In the story and the document reader we went to great lengths to explain the nuances, clarify and calibrate wording to show what the emails did and, just as important, did not say.

The column fails to mention that Mr. Brisbane looked into numerous specific allegations about the stories, including claims that The Times might have been manipulated by sources who aimed to profit from shorting shale gas, and found every single one of those allegations to be factually baseless and entirely unsubstantiated.

It ain't Warren, but he looks like he is more than a fine pick for the position. From Warren's statement on the hire:

Today, the President announced his intent to nominate Richard Cordray to serve as the first Director of the CFPB. Rich has a proven track record of fighting for families during his time as head of the CFPB enforcement division, as Attorney General of Ohio, and throughout his career. He was one of the first senior executives I recruited for the agency, and his hard work and deep commitment make it clear that he can make many important contributions in leading this agency. He will make a stellar director. I am very pleased for Rich and very pleased for the CFPB.

Of course the Republicans have vowed not confirm any nominee.

The town of Quartzsite, AZ, population 3,466, is in disarray after a video showing police hauling away a citizen for speaking at the town meeting podium went viral. The woman was saying that the town council had been violating open meeting laws.

It was the second citizen arrested at a Quartzsite town meeting in two weeks (here's the first). Tensions have been simmering in the town ever since the council raised sewage and water rates in order to help meet budget shortfalls. Citizens got upset after there was a disagreement over whether the town council meetings were being held in full accordance with open meeting rules. For instance, whether all all the meetings were accessible by the public and whether there was sufficient public notice given as to their dates and times.

After butting heads repeatedly, the council fired the mayor and declared a state of emergency. The council put the police chief in charge of everything and decreed that open meeting laws were suspended.