Tuesday, July 26, 2011

Estamos Jodidos en California. . .

Okay, title is something of an inside joke.  Back during my political activist day, a friend of mine used to do a spot-on impression of California Governor Gray Davis - stilted language and all.  Then to get huge laughs, he'd talk in Spanish as if he was the Governor, and we would all laugh our asses off.  Stupid I know, but to get Davis' uberwhiteguy pitch while speaking in Spanish was hilarious.

Anyway, in case you haven't bothered to look it up, "estamos jodidos" means "we're fucked."  And not just in California (that was the hat tip to my Gray Davis impersonating friend), but the whole country is about to be fucked. Big time.  Our Congress is about to let the United States renege on its debts for the first time E-V-E-R.  That's right kiddies, ever.  Thing about it - during the first years of the republic, we paid our debts.  When the British were kicking our asses and burning down Washington, D.C., we paid our debts.  During the horrific violence of the Civil War, and the extreme financial crisis that was the Great Depression, we paid our debts.  So why can't we pay our debts?

Because Congress won't pass a stupid bill to raise the debt ceiling so that the U.S. can borrow money to pay for the crap that Congress requires the U.S. to pay for.  Got it? No?  Okay, put it this way - go to a restaurant, order a bunch of crap, and then when the bill comes out, tell the restaurant you're only going to pay with the cash in your pocket, and not bust out the credit card.  Do you think the restaurant will mind if the cash in your pocket only covers 50% of the bill?  Yeah, it will.

And so will the people who are supposed to get paid by the Federal government by this time next Wednesday.  But since no one can beat the Feds into paying (except maybe the military, who may or may not be paid), the only thing our creditors can do is raise interest rates on everyone else.  For someone like me, who's looking to buy a house, I am about to get fucked.  But guess what, everyone is going to get fucked.  The higher interest rate will create a ripple of inflation throughout the world.  Or, to put it in economic terms, failing to raise the debt ceiling is going to create a supply shock while we're going through a demand side recession.  Kinda ironic that this would be done by supply-siders.

Make no mistake, unless something radical changes, there will be no deal.  John Boehner, facing an increasingly hostile freshman class, knows that any debt ceiling deal will cost him his Speakership.  The Tea Party, meanwhile, wants so badly to prevent Obama from getting reelected that its willing to destroy the country.  As Josh Marshall of Talking Points Memo put it, this is a game of chicken where one car doesn't have a driver.

And before we go all "a pox on both your houses," let's keep in mind that this fight has nothing to do with the deficit or the national debt.  Failing to raise the debt ceiling will actually increase the deficit substantially.  But even then, Obama and the Congressional Democrats have gone well to the right in hopes of forging a compromise.  The Republicans, who have become slaves to their own base, simply cannot and will not make a deal.  Hell, even John Boehner can't even pass his OWN plan.

So, in the nasally voice of Gray Davis, I say "Estamos Jodidos en los Estatos Unidos. . ." Ugh.

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