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Archive for July, 2011

Budget Battles

Posted by penuruloki on July 13, 2011

We’re about two weeks into our state government shutdown here in MN, and there’s a lot of talk flying around nationally about the debt ceiling issue. So how does it look from the ground level?

As long as Republicans hold firm, things look fine. See, they were elected by private sector working class voters to reign in government. The hardship stories dug up by the local liberal media are mostly of government workers missing their full-sized paychecks. You can likely add to them the prospective lost dues of their unions (I have no idea how dues are handled, or if unions are still collecting them somehow; I doubt it). In other words, the people suffering through the shutdown are liberal constituents.

Dayton chose to have a shutdown. The legislature was willing to pass what could be agreed upon, and was willing to use temporary measures while the rest was sorted out. Dayton was the one that insisted on an all-0r-nothing deal with no exceptions and a full shutdown. He’s trying to hold workers hostage to get the deal he wants, but his hostages are his own voters!

The workers who are struggling weren’t voting Republican before, so their anger costs Republicans nothing! Dayton is the one with votes to lose here, and he’s doing a fine job trying to alienate his supporters. The Republicans can afford to let the shutdown last as long as it has to. There’s no reason for them to give up anything to get a deal now! Avoiding a shutdown would have brought benefits, but post-shutdown, the Republicans can only lose by granting concessions.

Nationally, things are more complicated. No one wants a default, but it isn’t clear there needs to be one. There are other means of raising revenue than issuing debts (selling assets for example). Even if there is delayed repayment (the .gov would repay debt with interest when the matter does get resolved) and higher interest on new debt, are Republicans likely to be up in arms? Tea Partiers want less debt and less spending. Making it harder to borrow really doesn’t scare them. They want it to be harder for the government to borrow (hence the ceiling).  It’s the Democrats that want to preserve big government that should be scared of debt problems. Republicans have already made it clear that they will not accept higher taxes in a debt ceiling deal. Trying to force a crisis to get what they want isn’t going to work. The fact that the public is already rolling back liberal power in the face of total failure on economic issues only makes that more clear.

The bottom line on both issues is that the Democrats have a lot more to lose by pushing things to a crisis than the Republicans do. Republicans just need to stick to their positions and not let Dem tactics get them unbalanced.

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