The cost of losing when you try brinksmanship

by  Tyler Cowen in

From the essential Robert Costa on Twitter:

Some more info from Senate R convos: Sen Dems are pushing for Reid to include seq fixes in any deal, think GOP is on ropes, shld push

Petard, hoist, etc.  “Seq fixes” by the way means fixes to the sequester, or in this case more government spending.  If you play threat games and lose them, you don’t simply end up back to where you started, rather you become vulnerable to the threats of the other party.  That is yet another reason why these threat games are dangerous.

Costa by the way is the guy to follow on this whole mess.

Comments

Dan Weber

what could possibly go wrong

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Adam J Calhoun (neuroecology)

Also from Costa:

Across the Capitol, tea party caucus Republican Rep. John Fleming of Louisiana said there was "definitely a chance that we're going to go past the deadline" http://m.apnews.com/ap/db_289563/contentdetail.htm?contentguid=eRj1H69D

Wheeeee

The Objective Historian

So what?!?!?

No default; there is income to pay the principal and interest on debt and then some. Maybe you have to give people 70% on the dollar of social security, end food stamps, forget federal salaries or something. That is implied debt, but not actual debt.

I say default if Dems won't negotiate and be strong; sow the wind, reap the wirlwind, fight the good fight and have faith.

joan

There is 200 billion in T bills that are due between Oct 17 and Nov 1. They can be refinanced without increasing the debt but who will buy them if the government is not paying their bills.

8

Who wouldn't buy them? A government collecting billions in tax revenues is paying out 10% in debt financing and keeping the other 90% cash, creating scarcity of U.S. dollars and "risk-free" assets? Foreigners will pile in to grab them solely for the ability to hold U.S. dollars.

mulp

Yep. all the banks and money market funds will happily factor all the payables of all the government contractors not being paid by the government, and all the personal debt not being paid by the public and private employees not being paid by the US Treasury.

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David Wright

I am not as blithely confident as 8, but I don't think the right answer to this question is obvious. I do believe that the administration would prioritize payments to bondholders. (Yes, I know they say they couldn't, but as Felix Salmon says, the same people who are currently incentivized to say they couldn't would be highly incentivized to do just that in the event.) And at some level showing your creditors that you would rather pay them than your own grandma is confidence-inspiring. Of course there is the whole uncertainty and financial chaos aspect, but such circumstances also tend to favor treasuries. I regard the whole experiment as rather interesting, albeit far to dangerous to run.

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Wallace Forman

Yet another post implying Republicans chose a threat game. As if partisan political negotiations were not inherently a threat game.

Steve Roth

Yeah well there are threats and then there are threats...

http://www.youtube.com/watch?v=AjPBp6DOwgU

E.G. Lim

As a foreigner who admires the US Constitution, I am scratching my head why it is not obvious to the American people/punditry/media that Reid/Obama chose to shut down 17 percent of the government. Hence this whole thing about blaming the Republicans for the shutdown is astonishing and irrational. I see Obama/Reid as the recalcitrant, inflexible part of the equation, when negotiations should have been the order of the today. Have to say I have never seen somebody like Obama before--as President--a very petulant leftist.

To say the shutdown and debt ceiling are off limits (Larry Kudlow today) is to put the last nail into America's fiscal coffin, it seems to me.

Jim Clay

I'm an American, and I'm right there with you, E.G. I'm becoming more and more convinced that either I'm crazy or there are a lot of irrational people out there.

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john personna

Well if you ignore each and every Republican who mentioned their forward planning for a shutdown/debt threat you might feel that way.

Also, MR should try some kind of outreach to reduce echo chamber effects.

Until then, cross read The American Conservative.

derek

Both sides figured they could get something out of it. Some Republicans think that maybe some spending cuts or some Obamacare delays. The Democrats seem fixated on trying to gain the house back.

I like it. I like it when politicians are scratching each others eyes out. And when they are miserable and unhappy. I love it when bureaucrats wonder if they will get a paycheck.

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prior_approval

'I love it when bureaucrats wonder if they will get a paycheck.'

Well then, you must be hating this, seeing as every single person in Congress involved in shutting down the government voted to ensure that all federal employees will be paid, in entirety, for not working.

Not one federal employee is wondering about being paid, though they are wondering when they can go back to work - there is a lot of data to be collected and distributed so that commentators can piggyback on such things as unemployment surveys, for example.

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john personna

Derek, the clean CR was a very fair offer. It was not some Democratic Party wish list.

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Steve Roth

Suppose the Dems said "We're shutting down government unless Republicans agree to a ban on all handguns."

The Republicans say no, and refuse to budge. The Democrats accuse them of refusing to negotiate.

Who's to blame for the shutdown?

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TMC

How about both groups agree to spend x, then one insists on spending much more, then calls it a 'clean' bill.

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Zach

Well, here's why I blame the Republicans.
In order to avoid a shutdown, we'd need a continuing resolution of some kind to pass both houses and get the president's signature. Let's consider a "clean" CR, (i.e. a budget that doesn't defund Obamacare.)
President Obama supports this. As do the 52 Democratic senators. As do all 200 House Democrats and 22 House Republicans. So we have the president, a majority of senators and a majority of house members all supporting a clean CR. Why do we still have the shutdown then, if we have all the votes necessary to avoid a shutdown? Because Speaker Boehner refuses to let a clean CR come to the house floor. Is it astonishing or irrational that I blame him and the Tea Party?

Andrew'

No, you are just buying the Democrat version. Well, I don't know if it's astonishing or irrational.

There is already a "Dirty" bill to end the shutdown (one that eliminates a bad tax from Obamacare and does whatever else it does).

In an outcome determined by negotiation, either side that chooses not to negotiate can blame the negotiations of the other side for holding up negotiations.

You just happen to be one of the people Obama is banking on.

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BC

Most Democrats and Republicans also believe that NIH cancer trials and the FAA should be funded. House Republicans passed clean bills to fund both, and the Dems blocked both. See for example, [http://politicalticker.blogs.cnn.com/2013/10/02/reid-gets-fiery-over-question-about-shutdowns-effect-on-clinical-trials-for-kids/]. So, it appears that both parties are tactically withholding funding to achieve other political aims or, to use Democrats' language, "holding funding hostage".

The difference is that the apparent consensus that Republicans are to blame itself is emboldening Democrats to prolong the shutdown since the Democrats now perceive that they have the most to gain politically from the shutdown. Hence, we see the Dems blocking all of these clean bills to restore popular spending and now, apparently, even moving beyond calling for a clean full CR and debt ceiling raise.

Some people seem to believe that whomever is to blame for a shutdown at one point in time, say the 1990s, must be forever to blame for any shutdown until the end of time. In reality, the party (or parties) to blame may change over time. It's whomever perceives themselves to be gaining from the shutdown. I have not seen many indications that Dems believe that they are losing.

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BAM4

BC, please learn to use 'whomever' properly or don't use it at all.

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john personna

Even ignoring the obvious game strategy in dirty (partial) funding bills, it is a real pig in the poke what they would add up to. No changes to food stamps? Or a never ending cascade of changes?

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Andrew'

What would they add up to?

Do they forebode something, or are we having this debate because we are already here?

I'm on record: There is no more give and take. It's on.

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E.G. Lim

I am really puzzled by this clean CR nonsense. The Dems are violating the law that they enacted (Budget Act; in the 1970s) I think they have to pass a new budget, not wholesale fund whatever went on the year before. By acquiescing to this CR stuff, the Boehner House has effectively passed the 2009 stimulus every year since! It is the road to fiscal hell. The House has to appropriate each spending bill, is the way I understand it.

I think it is dishonest to say the Republicans caused the shutdown. Elected House representatives have the right to fund spending bills; they funded the CR but not Obamacare. Dems can refuse to go along. So, it's a political fight, as it should. The media is doing a real disservice painting the Republicans as the ones shutting shutting down the govt. Ideologically, it may make you feel good to say it's the Republicans' fault, but it is intellectually dishonest. The media is really a huge disappointment in terms of informing the public of the issues--scary.

For instance, this whole thing about the Republican moderates trying to negotiate entitlement reform while at the same time surrendering to fund a new massive entitlement, Obanacare, is seriously disturbing; surreal is overused. But nobody is talking about this, including that NBC guy, Kudlow.

Waiting for Obamacare to implode on its own seems to me a fantasy--too many enablers all around including those same Republican moderates, implicitly, at the margin.

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john personna

Let's remember that if Boehner allowed a full House vote, the clean CR would pass, or an incremental change would pick up a few votes and pass. Let's also remember remember that a Republican rule change in preparation for the shutdown made it double extra certain the full House could not vote.

If you are on the Right and want to honestly say you are not holding shutdown or default hostage, call for that vote.

Don't block it and pretend this is someone else's shutdown.

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Jan

And one thing our constitution doesn't have is a hard limit on spending or balanced budget amendment, like some other countries. You can admire that part of it or dislike like. I am mystified by your interpretation of the current events.

E.G. Lim

I admire the checks and balances in the Constitution--see above. It's a political fight, as well it should be. It's the substance of the fight that should be covered in depth, not this "who's responsible for the shutdown" or "who's responsible for the threat?" Obama/Reid, voted in by the people, come from the hard left; Cruz/Lee also voted in by the people, come from the constitutionalist right-wing. So, it's a fight. I like Cruz/Lee's issues because Obamacare is a massive new entitlement and absurd (crazy?) for what I think is the best healthcare system in the world. The media should be doing a retrospective on all the lies propagated on behalf of passing Obamacare but does not, for ideological reasons.

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mulp

Well, the House is operating as if the in a general election, only Republican get to vote because allowing Democrats and non-declared to vote would not elect a Republican.

The Senate passed a "clean CR" without Republican objection, which will pass the House once Speaker Boehner brings it too the floor for a vote.

Under Senate rules, the House bill was defeated and amended by votes and returned to the House where the Speaker will not allow a vote. A motion to force a vote needs only 17 Republicans in the House, and once on the floor, it is unlikely to fail to pass.

And the fact it will pass with all the Democrats and a few (17) Republicans is the reason the Speaker can not allow the vote to occur because that would end the shutdown, and possibly Boehner time in Congress.

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Ryan Vann

Meh, there have been something like 18 ceiling hikes in the last 20 years or so, and most of them included some sort of negotiations (in the form of a bill) that was promptly disregarded. I can understand why the GOP thought this time wouldn't be any different.

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adam

that's not what 'fixes to sequester' means--they aren't talking about raising spending. They're talking about either swapping the entitlement cuts in the obama budget for certain 'sequestered' spending and providing more flexibility to agencies to decide how to allocate the sequester (rather than just having the across-the-board cut to everything). They're not talking about more spending (and they're also not talking about more revenue, which I don't know why D's would agree to entitlement cuts without that).

mw

Shhhh! Tyler's trying to make us angry!

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Tyler Cowen

Adam, that was one round ago (or more), right now they are in fact talking about boosting spending.

mulp

The Republicans could simply pass the clean CR that has been sitting in the House for two weeks that the Speaker won't bring up for a vote because it will pass with only 17 Republican votes.

Over two hundred Republicans would be able to claim they stood against Obama and voted against the reckless budget at sequester levels which passed only because 17 leftist Republicans betrayed America.

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John Thacker

Right now they're talking about boosting spending. Steny Hoyer in the House was always talking about boosting spending, and so has a pressure wing of liberal Ds. (Who don't want to cut entitlement spending either.) It's just a wing, right now the leadership isn't going for it, but it's what they're pushing for.

The "flexibility" argument was never something that was going to happen. Sequestration opponents always talked about the badness of across-the-board-cuts, but the House long ago passed a bill to give flexibility to the President (and McConnell proposed a bill in the Senate.) Sequestration opponents killed it, because they don't want something that makes the cuts less painful.

John Thacker

Here's an article from another source indicating that, yes, wanting to exceed the spending levels agreed to in the Budget Control Act is a sticking point.

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John Thacker

Hints that Republicans may end up playing ball on sequestration emerged this week. House Budget Committee Chairman Paul Ryan (R-Wis.) hinted that he would be willing to trade sequestration relief for entitlement reforms. Democrats aren’t ready to make that exchange yet because they view it as imbalanced, and because they want to get through the current crisis first

Swapping the entitlement cuts for the sequestration spending cuts is Paul Ryan's idea. The Democrats see no reason that they have to compromise, since they're winning, as reported on HP as well

Andrew'

Are Republicans really worried about nickles and dimes?

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John B. Chilton

I like how the link to "are dangerous" goes to Korean google image page for World War I. Tyler's in Korea.

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John Thacker

On a more positive note, the House just voted yesterday to direct its conferees on the farm bill to accept the Senate's bipartisan Coburn-Durbin crop insurance means testing (above $750k AGI). (Bipartisan in the truest sense, very balanced support on either side, the conservative and liberal wings joining to beat the center, who dislike the means tests.) The bipartisan farm caucus that is the Agriculture Committee in the House kept that provision out of the House bill, but Paul Ryan went above the Committee to get the House to state that it preferred to yield to the Senate on this issue rather than insist on its own bill. (A bit unusual- Collin Peterson (D-MN Sugar beets) complained.) (In fact, the House amendment actually goes further than the Senate, saying that the means testing from the Senate should happen without the Senate's delay.)

On less positive bipartisan news, two-thirds of Democrats joined with two-fifths of Republicans in the House to support sugar import controls, per usual, in another farm bill vote. Collin Peterson won that one.

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AlanH

It doesn't matter what the daily polls say today. There is no election tomorrow. What matters is what 51% of the voters in each congressional district believed happened, when they look back on it in 2014.

It is so easy for people to cheer on, or opine, that things as they are should continue as they have. We're paying the price now for not passing, decades ago, a constitutional limit (a la Germany) capping spending growth.

There isn't a smiley way out. There isn't an affordable way to keep more than 40 million US poor people happy. They don't save. Their former jobs are no longer needed at the rate of pay they want. The government employee rates and pension increases were based on optimism about "our producers," the private sector. I'm not worried about the solution. There will, obviously, be one. The Dems (I'm indie) want to force through more spending at least through the 2014 elections. We obviously can't afford it without driving some large capital out of the country. Should be interesting.

Jan

And in many districts the only 51% that matters is among the relatively small number of people who come out for a primary election.

An Average is Over situation here. How important is it to keep these people out of poverty, particularly the kids? That is the main question. Also, taxes and means testing.

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mulp

Yet the ones who want a cap on spending growth are the Republicans AFTER they exploded spending AND exploded the deficit and debt because they see no connection between taxes and spending and deficit and debt.

In 2000, the budget projections were for substantial repayment of all the public debt.

Then in 2001 to 2003, spending was increased substantially and paid for with tax cut after tax cut.

When spending is paid for with tax cuts, a Reaganomics invention, increasing spending is a virtue.

And Greenspan did worry that if the Federal debt were reduced to only the trust funds, where would the AAA debt come from as a safe haven for the shadow banks? Thank god Bush budgets made sure there were a large supply of US Treasuries for them in 2008 by running deficits instead of surpluses.

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W.E. Heasley

Politicos through the mechanism of government is a losing proposition.

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Travis

"They don't save."

How you expect someone who makes $35,000 and supports a family to be able to have any meaningful level of savings is beyond me. They live paycheck-to-paycheck and their consumer spending is what drives the nation's economy.

How do you expect my generation to save anything when we owe multiple tens of thousands of dollars in student loans - we're starting the game in a credit hole that has to be filled before we can even think about meaningfully saving.

So Much For Subtlety

That sort of income would have been solidly middle class in the 1920s. And they managed to save. Go to any Asian community and families on that sort of income save.

If they live paycheck-to-paycheck it is because they are feckless. Not because they cannot save.

I agree about student loans, but for God's sake, don't do a Masters degree in puppetry. The student debt is a problem because young people are disproportionately responsible for start ups and innovation. The solution though is not getting rid of student debt, but getting rid of stupid valueless courses. We should seek to drop the percentage of students in all formers of higher education to somewhere between 10 and 25 percent of the student population. With a preference for the low end.

Travis

"That sort of income would have been solidly middle class in the 1920s."

Uh, $35,000 would have been rich in the 1920s.

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Travis

I'm not sure how to respond to your bald assertion that "they managed to save" back then, because it's just not true. 80% of American families had no savings during that period, and 67% of all Americans savings was held by 2.3 percent of the families.

http://amhist.ist.unomaha.edu/module_files/The%201920s%20Economy%20Statistics.rtf

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jerseycityjoan

The costs for things like medical care, education and housing in many places are flying up while wages stagnate or get lower.

And there are a lot of families not making $35,000.

We have fewer people making enough to pay federal taxes, while at the same time the need for government benefits is increasing rapidly.

What are we going to do in 10 or 20 years when far more people who are making $8-$14 a hour today will be that same wage then (adjusted for inflation), not $20-$25-$30 as in the past?

We aren't set up to function with a middle aged population that's largely making low wages.

More needs, more needy, less taxes coming in. A recipe for disaster.

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Z

It is an interesting time for our ruling class. We have one party that is pretty much an ideological party. The Democrats are a bundle of groups bound together by liberalism. The other party is just a collection of groups that are not liberal. Calling the GOP a political party is abusing the terms. The factions in the elected branches are at odds with one another. The rank and file only agree that the liberals are bad. Otherwise they have little representation in the GOP. I guess it is just more "new normal."

So Much For Subtlety

This is just the usual partisan affiliation. If any party has become more ideological, it has been the Democrats. Until the 1970s the Democrats were a large party of pretty anyone who wasn't a Northern WASP. It included not only Northern Blacks and Jews, but also Southern Whites - the ACLU and the KKK.

Since then "bound by liberalism" has come to mean the hounding out of anyone who doesn't toe the ideological line. The Democrats have become much more homogeneous - racists like Robert Byrd were forced to recant or leave. But they have also become much more extreme. You look at the GOP platform in 2010 and it is not that much different from the GOP platform in 1980 or even in 1970. But you look at the Democrat's platform - they actually took out any mention of God or Israel until people complained last time around.

Meanwhile the GOP has become much more ideologically diverse. It still has some of the Northern WASP elites, although not many. It has gained Evangelicals which means much of the South. But in doing so it has become an alliance of very different people - the Evangelicals have little in common with the Country Club Republicans who control the party and donate a lot of money. Meanwhile you have people like McCain who is to all intents and purpose a Democrat.

Travis

Classic projection here - literally everything you're saying about the Democrats is actually true about the Republicans.

"You look at the GOP platform in 2010 and it is not that much different from the GOP platform in 1980 or even in 1970."

Seriously? You think the GOP platform in 1970 had anti-shariah provisions in it, or called for a return to the gold standard, or called for effectively abolishing the EPA? I remind you that it was a Republican president who took the country off the gold standard and signed the EPA into existence.

So Much For Subtlety

Sorry but whatever you're smoking, you need to stop.

I doubt that America had enough Muslims in 1970 to justify an anti-Shariah provision but it is absurd to think any party in 1970 wouldn't have adopted such a resolution if it was even remotely necessary. Although needless to say, there was no need because Muslims weren't allowed to immigrate in large numbers - thanks to those racists in the Democratic party. Nor did the platform refer to Shariah in 2012. You're assuming it did.

In 1980 the Republicans set up a Commission to study a return to the Gold Standard. In 2012 they did not even refer to the Gold Standard, but called for another Commission to study a return to a metallic basis for the currency. Continuity. Not extremism.

Notice nothing you have said in any way proves your point or that I am wrong. The extremism remains that of the Democrats who have gone way out on a limb historically speaking. The Republicans have become much more diverse - things like the Gold Standard are a nod to the Ron Paul group within the party. And the Dems, as I said, have become much more ideologically coherent.

RM

Then what's all this I am hearing that Reagan would not be the presidential candidate for the Republican party today. Am I hearing wrong?

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Z

I would not call the GOP ideologically diverse. I don't think that's correct as it implies there is something binding all of these groups together. It is the land of unwanted toys. On the elected side, about a third of the party would prefer to be Democrats, but circumstance make that impossible. Only about a third are ideologically on the right, assuming "right" means something other than "bad." Thirty years ago I worked for a Democrat who would have agreed with Ted Cruz 90% of the time, maybe more. That tells you how far Left the parties have shifted.

As for the public, the biggest self-identifying group these days is independent. Studies have made it clear that these folks are a hodgepodge of ideologies that are merely non-liberal. What can bind a pro-pot atheist with a tax reforming evangelical? Or, a pro-life immigration-restrictionist with a Romney Republican? The small government message should resonate with all of these folks and probably does, but neither of the political parties has any credibility on this issue so there's no way to get these folks into a party.

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So Much For Subtlety

RM, how is it possible that I say the platform of 2012 is more or less the same as that of 1980, and in fact I show that it is more or less the same, and you hear that as Reagan being unable to stand in 2012?

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Careless

Then what’s all this I am hearing that Reagan would not be the presidential candidate for the Republican party today. Am I hearing wrong?

I've certainly seen a lot of Democrats make that claim. Give Travis another shot and he might.

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Z

Yeah, you should see someone about that blow to the head you took before posting this. The Democrats used to have guys like Sam Nunn, Clarence Long (the guy who funded the Mujaheddin), Fritz Hollings and so on. Now, you cannot find a single non-liberal in the party. That's the facts. You guys on the Left have a serious lack of self-awareness.

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Therapsid

"But you look at the Democrat’s platform – they actually took out any mention of God or Israel until people complained last time around."

Good. They should have kept them out. In American politics it seems as those two terms have become synonyms.

But of course, as we know, the delegates were laughably over-ruled by the clown, LA Mayor Antonio Villaraigosa, and that Obama made the call to do so.

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Jan

I agree with many of your observations, but for as diverse in background Republicans are these days, they are absolutely becoming more conservative and driving centrist members out of Congress. To me, that shows the party becoming more ideologically monolithic. How many elections did Republicans lose last year because they ran extreme candidates who won the primaries over more moderate options? How many Republicans have left the party--or politics in general--precisely because they weren't conservative enough. Even McConnell is likely to face a very strong challenge this time. They've almost purged all the moderates. Meanwhile, Blue Dog Dems and the like are an influential part the Democratic party. I think "hounding out of anyone who doesn’t toe the ideological line" is more appropriate to R's than D's. I can't think of any Dem hounded out for being too liberal.

BC

Consider the Republicans that are considered plausible presidential candidates in 2016: Paul Ryan, Ted Cruz, Marco Rubio, Rand Paul, Chris Christie to name a few. While Rubio is the leader on immigration reform, Cruz is a staunch opponent. Rand Paul's views on foreign policy and defense are quite different from the others'. Paul Ryan's ideas on entitlement reform did not seem to be uniformly embraced by the entire party. Chris Christie and Rand Paul have differences of opinion, to put it mildly, on NSA surveillance. I think it's pretty hard to make a case that the Republicans are ideologically monolithic. On the contrary, there is an ongoing debate about what Republicans should stand for going forward.

On the Democratic side, my impression is that very few Democrats disagree with the basic sentiments on income inequality and the proper role of government that have been expressed from time to time by, say, Elizabeth Warren and Bernie Sanders. I am willing (actually hoping) to be proven wrong by citation of examples of prominent Democratic leaders that find Warren's and Sanders's ideas fundamentally flawed. The debate within Democratic circles seems to me to be one of tactics and semantics, i.e., trying to avoid having those sentiments labeled as "socialist", "collectivist", or any other term that may make them less politically palatable. Hence, for example, the curious (to me) desire among some to use the label "progressive" in place of "liberal". Debate focuses on packaging of ideas, not the ideas themselves.

There was a time in the past when one might have loosely labeled Republicans as libertarians on economic issues and Democrats as libertarians on social issues. Today, however, while we see much discussion on the growing influence of libertarians in the Republican Party, I am not aware of any analagous discussion about the growing influence of libertarians in the Democratic Party. I take that as a sign that libertarians at least are being pushed from the Democratic Party to the Republican Party, another indication of diversity among Republicans and monolithicity among Democrats.

Jan

I would say that libertarians are indeed gravitating to the R's, but they are really only united with them in their hate for anything government, and opposition to public programs for the poor in particular. However, neither of the Pauls have any shot whatsoever of being the Republican nominee for president. I think Christie, while their best shot at actually winning, will be escorted out of the presidential primary process for being too liberal and "Obama's buddy".

The Blue Dogs are a much fewer in number now, yes, though influential. They are fewer because they were voted out in favor of Republicans. The Democrats are happy to have to have them, but they can't survive in more and more right-leaning districts.

The Warrens and the Bernies are sort of like the Democrats' Pauls. The ideas are there, but everyone concedes there is no way in hell big liberal ideas have any chance right now and a lot Dems don't really agree with their more extreme views anyway. Take the medical device tax. There are many Democrats who have actively lobbied for repeal and would get rid of that thing in a second.

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Careless

Jan, you're talking about levels of pragmatism vs idealism in the Democrats, not a difference in ideology. You're describing a monolith.

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Jan

No, certain contingents within the Dems have different and farther-reaching priorities than others. That's what I was explaining.

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Z

If by more conservative you mean less conservative, sure. The only people who make these claims about the GOP are liberals racing for the cliff. Everyone else sees a general drift of both parties to the left. As to those "blue dogs" I'll just note their numbers are a third of what they were a decade ago. Many were forced to walk the plank for ObamaCare and then left politics or were voted out of office.

I will say this. Reagan could not run and win today. For starters California is to the left of China. Reagan never could have been elected there now. Second, he would be tarred as a right wing tea bagger of the most extreme kind by the GOP leadership.

lxm

I find this amusing.
Obama is center right.

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Jan

Right. Reagan could not be elected now because he was willing to raise taxes and signed a permissive abortion law in California. Too liberal.

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Brandon

"Everyone else sees a general drift of both parties to the left."

lmao

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Jacob A. Geller

On September 29, Tyler argued that the Republican strategy was not irrational, in fact he called it "public choice theory in action." He reasoned that the GOP might get something out of this fight, like a repeal of the medical devices tax, which could conceivably be worth the short-term political cost. That reasoning was wrong then and it's clearly wrong now. The GOP's strategy never made any sense at all, because there was no way Obama could or would ever reward it with a repeal of the medical devices tax nor anything else. Tyler was trying to be the reasonable center, trying so so hard (bless his heart) to make the GOP's strategy look even remotely reasonable, but no, the truth is much simpler: they misread both the economics *and* the politics, and took the country down with them for no gain whatsoever, a rare but real Pareto inefficient outcome.

PS - I do not think the GOP will survive challenges from the right during their primaries, either; even from that perspective their strategy makes no sense. Now they will have to cave in to a clean CR (with perks) AFTER drawing huge amounts of attention to it and taking double-digit hits to their approval ratings. The politically rational thing to do would have been to rip the bandaid off quickly and pass a clean CR while railing against spending and debt over and over again on national television, like they always do. Their base would have eaten that up.

david

He might give on the medical devices, since there is some opposition to it in the Democratic segment. It may only ever have been there to make the CBO cost assessment numbers look better back in 2010, but that's no longer relevant now. And letting the GOP try to spin a Democratic policy win as their own would be great.

Jacob A. Geller

Greater than simply letting the failure of the Obamacare exchanges be Issue #1?

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Andrew'

Maybe they don't understand, but maybe you don't either. What if they don't care about their approval ratings or if they know their approval ratings are destined to fall. This has always been between the moderate Republicans and the Tea Party.

Jacob A. Geller

See a) my second paragraph above and b) Tyler's post. This strategy has been a loser for incumbents.

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tt

WWTKD ? what would the Kochs do ?

prior_approval

Well, there is this - 'GOP-aligned business groups such as the U.S. Chamber of Commerce, the National Federation of Independent Business, and others played a key role in helping elect dozens of conservatives to the House and Senate. Now that these conservatives are trying to drag Congress into multiple confrontations that could do untold economic damage, however, the groups that played such a big role in shaping this Congress are none too happy with the forces they helped unleash.' http://www.washingtonpost.com/blogs/plum-line/wp/2013/08/19/business-groups-arent-too-happy-about-tea-party-mania-they-helped-unleash/

Ooops - that article is from August.

In the present, there is actually this - 'Trade groups such as the U.S. Chamber are also discussing an unprecedented step: supporting more moderate candidates in primaries. In the past, the groups have gone to enormous lengths to support mostly Republican campaigns — but only to beat Democrats, not other Republicans.

Until this week, many in the business community have been standing on the sidelines, trusting that the GOP, to which it has been allied for decades, would work out its internal squabbling. But with some companies already seeing a drag on their businesses from the shutdown, executives are getting involved far beyond the usual menu of interests such as taxes and regulations.' http://www.washingtonpost.com/business/economy/in-budget-and-debt-fight-white-house-finds-unlikely-alliance-in-business-community/2013/10/11/5840060e-32a0-11e3-8627-c5d7de0a046b_story.html

The Tea Party was always just a front group - and now, its paymasters are deeply, deeply unhappy. Did I say paymasters? I meant constituents.

Andrew'

Or, if they aren't in control now of the tea party that suggest they never were in control.

Nah, I'm sure your preconceived notions are correct...

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jerseycityjoan

These are three entirely voluntarily -- although they don't feel that way to us -- ways that we misspend over a trillion a year.

1. We overspend on medical costs. I am not talking about "death panels" here. I mean we spend so much more than other First Wolrld countries on the same things.

2. We overspend on defense. Much of our money is spent protecting other First World countries. After all we've spend on Iraq and Afghantistan, we were still stupid enough to put in a new base in Australia, paid for entirely by us, I believe, to protect various "Asian interests."

3. Legal Immigration -- Senate immigration bill proposes to double future legal immigration. If we can afford to take care of all these extra people, then I guess we are all wrong and we have no deficit and there really is a money tree in the White House lawn. Otherwise, this is plainly an further escalation of our determination to keep wages low for Amerians and keep costs low for businesses. American corporations will repay our kindness by continuing to charge us the same prices or higher, and continue to look for ways to take advantage of their American customers and the American government too.

Excessive medical costs -- excessive military spending -- excessive immigration -- we'll know we're really serious about change in America when we're ready to attack these three things. That will mean we want to free up more money to spend on ourselves and our needs. It will mean we are ready to tell the users and parasites taking advantage of us that we've had enough. Cutbacks while the parasites are still sucking us dry won't do any real good.

AlanH

Joan, I agree with your comments on the three spending foci. I would note the challenges:

On medical spending physicians largely support increased spending of other people's money, which the poor and elderly identify as spending on them. Both parties seem terrified to oppose the 25% cut in Medicare physician pricing or the flattening of growth rates in the number and cost of high-end treatments provided by the government to people who won't be paying for them either through taxes, or directly, or through unsubsidized premiums.

An odd alliance appears again with immigration: The 'country club Republicans,' small employers, seem to value cheap labor as much as vote-seeking democrats do, just as long as the taxpayer (not the employer) funds the immigrant's benefits.

Defense: Our remarkable current military position, the carrier battle groups, the hundreds of facilities in dozens of countries, the extremely expensive air-force and naval aviation...seems to be the price of maintaining dollar supremacy. The military efforts abroad recycle some of our dollar privilege into foreign economies while at the same time providing a huge distribution of high-earner tax dollars to all the men and women serving either in the forces or in civilian adjunct services, both technical and pink collar.

Overcoming those odd coalitions of self-interest is going to be extremely difficult. How can it not require a major revamp of the core coalition structure of the republican party?

jerseycityjoan

AlanH,

I was speaking about the things we are doing to ourselves that are killing us financially.

While I'd love to see the Republican Party pick up on these ideas, I didn't mean to suggest that they should be the ones to change and not the Democrats.

Both parties, in their different ways, are stuck in fantasy worlds and have been for many years, in my opinion.

It is telling to see how our peer nations can speak of our hot button issues as just another issue. The UK has been dong that this past year about military cutbacks and immigration. Has there been disagreement, yelling and anger over there over these issues? Yes. But they continue on speaking about them in terms of what is good for the country, what the people want, etc. Our politicians and our elite in general, however, remain all twisted up over what they tell us and themselves we "owe" people in othe countries -- some of those First World countries. They are also all twisted up over trying to balance their commitment to the betterment of people in other places with their commitment to the betterment of their big financial contributors.

We Americans don't stand a chance, we are so far back in line. Nothing's left for us.

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jerseycityjoan

"Overcoming those odd coalitions of self-interest is going to be extremely difficult. How can it not require a major revamp of the core coalition structure of the republican party?"

You are quite right but it is absolutely vital that this happen in both parties. We have to get the dead weight off of us. Post-recession America just can't afford to throw away trillions a year. We just don't have it. And at this oint, we have neglected our own people and our own needs for too long.

I should mention there are some things that our military does for others that I think are valuable but should not be paid for by us alone. Can we get some of our parasites to become contributors for the common good? We'll see. First of all, they 'll have to be convinced that Uncle Sam isn't going to sacrifice himself for them anymore.

Therapsid

Who are these parasites? Be specific.

Stop throwing around inflammatory code words and be concrete.

Anyway, if you really believe our political elites are tossing away American capital, then start asking why that is. They're not *that* stupid.

Qui bono? If you're able to answer that question, you'll realize it's not just a problem with your so-called "parasites".

jerseycityjoan

There are so many that I cannot name them all.
The people who encourage and demand our unnecessary spending and unnecessary commitments people in other countries via the excessive military spending to protect other rich countries who can defend themselves and excessively high legal immigration.

Our elites don't care about us because they consider themselves "citizens of the world" -- that is, until they want something. How can such elevated people be so concerned about a continuously refreshed pool of cheap labor? Because after so many years of using immigrant labor, they have become used to it and feel the financial rewards of exploitation are their due.

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Claude Emer

It's not accurate that we're engaging in wars and other non-specific activities around the world because our politicians think we're citizens of the world, or the world so needs us and whatever else we hear everyday on TV. We're protecting our interests, simply put. We're ensuring the supremacy of the dollar as mentioned above.

The problem is our democracy apparently can't survive our politicians telling us directly that the reason we installed this dictator or assassinated that other one or fight wars in places we can't find on a map is that our economic and political supremacy and frankly our economy would have been threatened otherwise. So politicians resort to pulling at our heart strings rather than appealing to our reason because it's a proven, time-tested method to garner support. Are there miscalculations? Absolutely, but that doesn't take away the big picture. Think about how much our economy depends on things we build and use or export.

If we really want things to be different, we should start by acknowledging the ugly truths, then we can come up with relevant solutions. Every heard of balancing the budget by cutting foreign aid, all 0.7% of it?

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8

Democrats have one ideology: gimme free stuff. If the free stuff ever stopped flowing, they'd be at each others' throats because they are a mix of special interest groups with very little in common. Lots of the GOP voters want free stuff too: the Boomers think they are owed SS and Medicare. They think they are more entitled because unlike the many Dems who paid $0 in taxes, but get back $100, they paid in $100 in taxes, so they deserve $200 back.

What's funny is the people who think this is going to end well.

Brandon

So true! XD XD XD

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Andrew'

They waste half our money. They frisk us and steal our communications. They've demolished any international goodwill we had. They've either done these so they could gut the constitution, or they gutted the constitution so they could do these. Even their least important ideas lie somewhere between useless and making things even worse. The end is coming fast or even faster.

What are exactly we going to lose?

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Tom West

If enough people backing enough congressmen believe that 'we have to destroy this country in order to save it', then it will get 'saved'.

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Joe

A quote from Costa's Blog:

"Reuplicans who say talks are breaking down because of BCA tinkering are being disingenuous. We are not backing away from the short-term CR at $988 billion we already passed. The plan all along was to pass a short-term CR, get past the debt ceiling, and then debate spending levels for 2014. Both parties knew that, so for Republicans to imply that our refusal to preemptively accept $988/967 billion for all of 2014 is a change in position is just flat-out false, and they know it."

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Rich Berger

Tyler-

I hope you are following Costa this afternoon. Do you still think he is the guy on this issue?

Jan

Ha ha. His reporting has been very good, but today he is the mouthpiece for conservatives who swear that breaking in and hanging out at the WWII Memorial is a big story and gives them momentum going into the next week. Also, Lindsey Graham gave him an exclusive that he will require a vote on the Vitter amendment (to take away congressional staff's health care contributions toward the exchanges) along with any debt deal.

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Brian Donohue

I continue to scratch my head over your elliptical comments here. I love this blog and think it's great, but you are wrong on this, almost pusillanimous.

The American people suffer cognitive dissonance- the idea that what's going on right now should be guided by day-to-day polls or political pot-shots is ludicrous. Again, if all you beltway geniuses are so enamored of public opinion, let us be guided by the wisdom of crowds on the issue of full back pay for furloughed/vacationing employees. The stark gulf between business as usual in DC and the simmering rage out here is enormous, but you can't even see it.

Andrew'

He's practicing positive public choice here. Sometimes he slips into normative positive public choice, but I don't really see it here.

If the Republicans "lose" and Obama doesn't back down, the Republicans still capture a few more minds who see a negotiation as a two-way street and notice that yet again Obama has done everything based on politics.

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ThomasH

The most important fix is to eliminate the debt ceiling. When negotiating with a hostage taker, it is not enough to give up his hostage, he has to incapacitate himself from further hostage taking.

Andrew'

Then the most important thing is to keep it.

We could make the government not fail-to-disaster in the case of the debt ceiling, but that is the Democrat's hostage.

We could debate spending, and have to, because we don't have zero-based budgeting for new programs-- Obama didn't have to propose where he'd get the money from (other than taxpayers and poor people who can't afford insurance).

So, it's fine to debate spending as an aggregate. That YOUR government chooses to threaten default and close parks is not OUR fault.

Jan

I just saw Captain Phillips. The most important thing is to make the hostage takers see that they can't win and that the world is against them. We have gotten that far. Now all we have to do is convince them that it is not worth it to kill themselves or the hostage as we reel them back into reality.

Careless

of course, they've both taken hostages at this point. That's why the Democrats won't let the Republicans pass other things in the meantime: they'd eventually fund everything but Obamacare. It's like the hostage negotiators are threatening to shoot any hostage that comes out of the building if the hostage taker doesn't send them all out at once.

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Brian Donohue

Yeah, this pretty much sums up the attitude of the clueless and petulant left, which Tyler is so curiously willing to indulge here.

The thing about this cognitive dissonance of the American people- it's a big problem for both parties, and the country. As 2013 has progressed, it's becoming clear to me that Democrats are less willing or able than Republicans to bridge the gap between THEIR narrative and the ugly reality that is by now familiar to everyone in Washington.

It's a tough needle to thread, but the President appointed the Simpson-Bowles commission several years ago, and 11 of 18 commissioners approved the recommendations of the commission. Considering that it's nothing but a big bowl of spinach, it's remarkable to achieve 55% agreement on something like this. Now, it's grown-up time- get to it.

Brian Donohue

oops. 11/18 = 61%.

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Andrew'

What kinds of assholes threatens default because they can't plan a few debt issues ahead? Well, our government, the banks, criminals, and sociopaths...but I repeat myself.

Noone has to default because they are approaching a debt limit.

If you do, y'er doin' it wrong.

Jan

Nope. They can't and shouldn't have to consider fancy tricks to avoid default. It's all bullshit.

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