The battle for the soul of the GOP … Who’s more influential in the Republican Party – the so-called Tea Party, or Wall Street and big business? The answer will be critical in the weeks ahead as the House decides whether to raise the limit on the nation’s debt. – Syndicated column/Dedham Transcript
Dominant Social Theme: Even radicals need to be sensible when it comes to raising the debt ceiling.
Free-Market Analysis: Robert Reich (left) has written a splendid article called “The battle for the soul of the GOP” (see article excerpt above). He writes that the battle is between the GOP old guard and Tea Party types. Guess which side the diminutive socialist/left wing powerhouse – former Secretary of Labor for Bill Clinton – comes down on? We’ll tell you below.
Certainly, Reich understands the importance of what’s going on; his analysis is presented with flair and wit. A self-admitted brilliant person, he cuts through the complexity both from an economic standpoint and a political one and comes up with sensible analysis. He begins by explaining what the stakes are. To continue paying interest on the federal debt and avoiding a default, he writes, the government will have to cut spending by about 35 percent, or about $3.8 billion a day.
After explaining the numbers, he puts it into human terms. This is very important. Politicians are always told to present things in ways that touch the emotions. He writes, “Seniors expecting Social Security and Medicare checks will be in for a rude surprise, as will military personnel and other government workers expecting to be fully paid. Meanwhile, America’s creditors are likely to become spooked about the risk of not being repaid in the future. As a result, credit markets could go into free fall. Interest rates would skyrocket. The dollar would plummet. This would be a nightmare for Wall Street and big business, which depend on smooth-functioning credit markets.”
Now that Reich has established the gravity of the situation, it is time to explain the political ramifications. He does this incisively as well, explaining that the issue of raising the debt ceiling has become hostage to Republican infighting: “The so-called Tea Party Republicans – including all of those elected to the House last year plus incumbents fearing primary fights with Tea Partiers – say they won’t raise the debt limit unless Democrats agree to their demands.”
a12iggymom's Blog 