Just minutes before a major White House meeting begins over the debt ceiling negotiations, it's my bet that Republicans will be unwilling to accept revenue-raising measures in exchange for major spending cuts and entitlement reforms. At least not for now.
The debt ceiling deadline is August 2nd, and a U.S. debt default could “shock” and destabilize the entire global economy. That's what International Monetary Fund Christine Lagarde warned today on ABC's “This Week” news program. She emphasized that she can not imagine this actually happening.
A default would be bad for everybody, especially the U.S. economy. If no agreement is reached by the deadline, the U.S. dollar may plummet and interest rates could skyrocket. The Federal Government says just a 1% rise in interest rates could cost taxpayers $973 billion over the next 10 years. Obviously, no one wants that to happen, not even Republicans - at least not any sane Republicans.
The Republican party, however, looks anything but sane. The 2012 GOP race is headed by Michele Bachmann and Mitt Romney. Bachmann, who is now the official Iowa frontrunner, is known for her many factual inaccuracies. Her latest gaffe: confusing actor John Wayne with serial killer John Wayne party.
Donald Trump distracted the electorate for months while amazingly waging a fake campaign based on the premise that Obama wasn't a U.S. citizen. The Tea Party has hijacked some of the headlines from somewhat normal people like Mitt Romney, but Romney's troubles are just beginning.
Although Romney is ecstatic that his main competition seems to be Bachmann, his real problem is that although it is a good strategy for him to lay low and continue to let Bachmann make herself look like an idiot, eventually he will have to stand on his own merits. So far he's been spending most of his time distancing himself from the one program that he accomplished that got something done: the Massachusetts health care reform. The fact that Obama's plan is similar to Romney's original plan would be good for Romney if he was a Democrat, but this and other inconsistencies in Romney's record make him a good bet to lose in a general election against Obama.
Making the Republican party look even worse is not just potential offbeat candidates like Sarah Palin and Rick Perry, who has gone on the record as saying he would have Texas secede from the U.S. The Republican party now has to deal with the embarrassment of David Duke, the white supremacist who says he's considering throwing his hat in the ring.
The economy as a whole is a dark cloud hanging over the White House and the reelection, and they know that. But the Democrats are pointing out that they were handed a disastrous economy by the last administration, and they are taking steps to correct it. The first step is solving the debt crisis, and House Speaker John Boehner and Congressional Republicans are standing in the way. Talks broke off Saturday night over the issue of tax hikes. Republicans want tax hikes off the table, and as negotiations begin again tonight, Obama has made clear he will not budge on this issue. So what we have left is continued gridlock, and with time running out.
So far, the world has not lost faith in the U.S. economy. Our stock markets are strong and our companies continue to thrive. But as this dangerous gridlock grinds Washington to a standstill, it is easy to see the American public becoming fed up with talk-radio rhetoric and political grandstanding. The Republicans seem intent on playing games with the creditworthiness of America, and this is not only a terrible policy, but also political suicide.
Even before the lastest shocking employment numbers, recent polls showed Obama's approval ratings plummeting when it comes to creating jobs. According to a June Bloomberg poll, Obama had a dismal 38% approval rating, with 57% disapproving. That can only encourage Republican presidential candidates, and they have indeed pounced on these job numbers with ads claiming “things have gone from bad to much worse,” and other variations of this theme.
Normally, with the economy in such disarray, Obama would seem easily beatable. But the Republican party has put together a rogues gallery of weird candidates, from Trump to Bachmann, all the way to the possible candidacy of well known racist David Duke.
The debt negotiations won't end today, but they will end. It is not only in the interests of the U.S., but the rest of the world. The August 2nd deadline is fast approaching and default is not an option. And when it's all over, Obama will continue his steady approach to governing the country, and the Republicans will be trying to disassociate themselves from right wing nutjobs like David Duke.