Rep. Paul Ryan, chair of the House Budget Committee, is raising the threat of a US credit default early next year.
The debt limit, which President Obama hopes will be raised by congress in January, is once again being targeted by Republicans as a bargaining tool for implementing a tea party wish list of pro-big business policies and deeper austerity measures.
On Tuesday, Republican Paul Ryan of Wisconsin, said on Hugh Hewitt’s radio show that forcing President Obama to approve the Keystone XL oil pipeline in exchange for raising the nation’s debt limit is fair game.
Ryan also wants more debt reduction and entitlement reform, which is the current phraseology for cuts to Medicare and Social Security that pave the way for privatization. Of the popular government programs. Repealing Obamacare was also on Ryan’s wish list.
But perhaps the most dangerous part of the Republican plans are even deeper austerity measures that the Washington Post calls an agenda that would lead to another Great Depression.
“The Republican Party continues to organize itself around the kind of austerity agenda that, should they obtain enough power to implement it, would cause another recession immediately, possibly a very bad one,” according to Ryan Cooper in the Washington Post.
With the federal deficit falling rapidly the obvious question is when does lagging job growth take priority over cuts?
Government is not powerless when it comes to growing the economy. Spending, even government spending, ends up circulating through the economy. That money then makes its way back into the Treasury through income and payroll taxes.
There is more than one way to shrink the deficit and it seems that Ryan and the Republicans are strangling job creation with the same failed austerity measure that has suffocated Europe. The same policies will not yield a different result just because they are implemented in the US.
Although compromise may be a “dirty word” among the tea party crowd, in this case, a mix of revenue generated by payroll taxes would accomplish the goal of deficit reduction, minus the pain of austerity measures.
More importantly, Republicans need to learn from their October mistake and not repeat it. Just because you don’t like the government doesn’t mean you should shut it down or deliberately push it into an unnecessary credit default. A self-inflicted recession or depression is not going to accomplish the stated goal of deficit reduction. And it won’t make voters eager to hand power to the candidates that made “stupid” the party platform ahead of the 2014 elections.