Proxy Fights

Let’s say you get yelled at by your boss and you stand there and take it. When you go home and (metaphorically) kick the dog, that’s a proxy fight. You don’t want to fight the real right, so you have a placeholder instead. This happens all the time through history. Nations fight in Korea and Vietnam because a war on Communist Russia itself will end in nuclear annihilation.

For all the doomsday talk of the debt ceiling, it is merely a proxy fight for the budget itself. In fact, it’s a fight over last year’s budget. A few months ago, Tea Party supporters were outraged when tens of billion in “cuts” in the FY2011 budget amounted to merely $352 million in real budget reduction. Then there’s the current budget, which exists either in Paul Ryan’s plan or Barack Obama’s imagination.

The Federal government has the ability to issue debt, but has a limit that requires Congressional approval to raise. States don’t generally have this luxury, but they will issue bonds in a similar fashion. The debt limit increase itself is based on the amount overspent in the federal budget, so much of it is baked in the cake anyway. While some people play politics with the vote, like the half term Senator from Illinois, it’s generally accepted that you have to pay the piper, or at least borrow money from the Chinese to pay the piper.

In true proxy fight fashion, the Republicans chose to avoid having their asses handed to them in a budget fight right before the campaign season. Plus, there’s the lingering memory of the government shutdowns in 1995. The result would be the same anyway. When we run out of money, doors will close.

Think of the debt ceiling like a credit limit. We get to raise the limit as we see fit, so think of it like Donald Trump’s line of credit after he declared bankruptcy. Right now, it’s like a home equity line of credit, where the amount is based on our annual income (the GDP). Since we only have the one credit card, we use it to pay for everything. We have the minimum payment, since we rarely pay down the balance on the card. We have our security system (defense) and our retirement plan (Social Security). We have health insurance payments (Medicare). There’s mandatory spending like utility bills and car payments. We also have some discretionary spending like those fancy Scotch and Waygu beef parties.

Some expenses are more important than others, but they are all bills to be paid. If the credit card company gets wind that we are avoiding creditors, they’re going to raise our interest rate. The easiest solution is to spend less. Gaining income is tough, especially in this economy.

The current negotiations over the debt ceiling are, in fact, budget items. We are creating the budget for FY2012 right now. That’s why this fight is so contentious. The Democrats managed to go two years without a budget. This time, they have only a few months. For all the bickering, we are right back where we were the day the debt ceiling increase vote failed. The ceiling has to be raised in order to spend more money. If the president ignores the ceiling, the Republicans will have the moral high ground to block every budget submitted by his party.

The credit line will end. Maybe not today, maybe not tomorrow. But soon, and for the rest of the administration.

About 1539days

I'm like a word a day calendar for executive disasters.
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83 Responses to Proxy Fights

  1. 1539days says:

    You guys should let me know if there’s a scheduling system for posts. Most of mine go up at 10pm EST at my site.

    • votermom says:

      I don’t know if there is. I usually have my posts in draft since I do them in wordpress, then if I don’t see anything scheduled to go I’ll just publish.

  2. Lola-at-Large says:

    Good post, days.

  3. WMCB says:

    Good post. In the end, the debt ceiling battle is a side issue. Because we WILL hit that debt wall, and our budget will get “balanced” whether we want it to or not. If we don’t do it ourselves, the bond market will do it for us. Not the ratings agencies, but the market itself.

    There is no way out of this without pain. None. And if we don’t start some major budget-tightening now (not this pissy stuff they keep playing around with of bending the curve over 30 years), then we are going to hit that wall with no plan how to survive it, other than printing money until we Weimar ourselves.

    • Dario says:

      Printing money is not an available option because the minute bond investors smell inflation, the interest rate demanded from the bonds, skyrockets, drying up all borrowing. The purpose of inflation is to pay loans with a cheaper currency, but professional bond dealers don’t play that game. The Weimer inflation was not happenstance. After WWI Germany was forced to pay the Allies, and as Wikipedia says:

      In order to pay for the “passive resistance” in the Ruhr, the German government began the hyper-inflation that destroyed the German economy in 1923.

      • 1539days says:

        We’re already printing money as part of quantitative easing. Right now, our credit is as good as our creditors. China has an interest in a good US economy, because we are a major market. Still, the trend is away from US currency. Even if we still keep out AAA rating, the demand for US bonds is getting weaker.

        • Dario says:

          We were printing (it’s over) and Inflation is tame. QE2 threw money to the financial institutions and they invested the money in commodities. It was a planned inflation because Bernanke didn’t want deflation. It didn’t work. The inflation we saw in oil, and other commodities have retreated. Only higher wages can bring a more permanent inflation. With people out of work in the millions and pressure on wages, inflation should remain subdued.

      • WMCB says:

        Deficit-spending forever is predicated on the idea that someone will finance that debt for you forever. If they decide not to, you are IMMEDIATELY screwed. The contraction in the economy that we should have allowed to happen in a controlled way, several times over the past decade, will happen all at once. BOOM.

        We cannot afford the amount of govt spending we have. Period. We actually never could, but we got to ignore that inconvenient fact so long as someone was willing to issue us endless credit.

  4. WMCB says:

    OT, but since I already made by Perry/Rubio prediction as the GOP ticket, I thought I’d mention it. I’ve seen a lot of scoffing at Perry as easily dismissed as just another TX governor. I think those people are dreaming. For those who think Perry is like Bush, think again.

    This guy knows how to fight, and is nothing like Bush in who he is. Don’t underestimate him. There is a lot of steel underneath that slick “playing the game” politician persona.

    Perry grew up poor as dirt on a TX farm. His parents didn’t even own their farm, they were freaking tenant farmers. And poor south texas crappy dryland farmers to boot. He grew up working his butt off from the time he could walk, scraping a subsistence living in the blazing sun, bathing in a washtub and crapping in an outhouse.

    This is not Mr. Silver Spoon, Big-Daddy-bought-me-a-ranch GWB. People who grew up like Perry grew up, and made it out of that hell, have a brand of smart that has nothing to do with I.Q.

    That’s not an endorsement. Just a word to the wise that those writing him off as “just another Bush” have completely misread this man.

    • 1539days says:

      Rick Perry is the son of a share cropper?

    • angienc says:

      Hmm, I don’t know much about Perry, except for the closet-gay rumors which the Left seems to be spitting out full force (and which probably mean are not true). But I just wiki’d him & he went to Texas A&M. Ha! The TPTB must be shitting a brick at the possibility of an Aggie “polluting” up the WH — I think Haah-vard or Yale are de rigueur for that gig.

    • ralphb says:

      Here’s another prediction. If the ticket is Perry/Rubio, they’ll plant a cowboy boot up Obama’s butt big time. Maybe spurs and all.

      • WMCB says:

        Uh huh. I have some issues with Perry, but I don’t underestimate him. If he gets on a ticket with Rubio, Obama is toast. It’s about the jobs, stupid.

        My district is one of the largest in the country, is majority Hispanic, and encompasses about 2/3 of the Mexico border. We voted in Hispanic businessman Francisco Canseco in 2010, getting rid of a longtime Dem, Ciro Rodriguez.

        If the Dems think they have a lock on the Hispanic vote with immigration scares, they are dreaming. Hispanics want jobs too.

      • foxyladi14 says:

        can’t wait to see that.. 😆 😆

  5. yttik says:

    I think it’s worse then a proxy fight, I think campaign season has begun. These people are posturing so much, they aren’t getting anything done. And Obama, that was just pitiful, taking his whine to the American people.

    I’m all for a transparent government, but I’m starting to wonder if we shouldn’t sequester these politicians like we do with juries. No talking to anybody, no press conferences, just post a guard at the door until they get the job done.

  6. Lola-at-Large says:

    Government Considers Ways to Rent Foreclosed Homes : http://online.wsj.com/article/SB10001424053111904233404576458300001332210.html

    WTF? Why didn’t they just use the bailout money to pay down mortgages in the first place? People could have stayed in those homes. They just gave free money away to banks and Wall Street. WTF? God, I so hate Washington.

  7. Dario says:

    Let’s say that the Republicans get their wish and we get a massive spending cut. Does anyone think that the cut won’t send the economy into a recession when we’re on the edge? I say, yes.

    A recession means lower revenues for the federal government. The deficit again balloons. You get the picture. The rich who have made the money since Reagan, don’t want to pay more taxes, and the middle class can’t pay more. I don’t see that the deficit is the problem, but the symptom of our problems which is an expensive Pentagon that knows no country that doesn’t want to occupy.

    • yttik says:

      I don’t think spending cuts are going to send the economy into a recession. For one thing, we’re already in a recession. But mostly I still think the economy’s problem is attitude, anti business policies, people’s fears, the uncertainty.

      Obamacare is big cloud hanging over people’s heads. To this day, nobody really knows what’s in the bill or how it will effect them. Small businesses know a few things and none of them are good.

      Yes, defense spending is like a huge black hole that we pour money into. It is expensive and totally out of proportion. I don’t support it at all. However, defense spending itself probably creates quite a few jobs and stimulates the economy. It also doesn’t really contribute to that uncertainty on a personal level that is hitting so many small businesses.

      • Dario says:

        I don’t think spending cuts are going to send the economy into a recession.

        It depends where the government makes the cuts. Cuts in infrastructure, for example, can be a negative to the economy, whereas cuts of payments to Pakistan would have little impact here. As to cuts to defense, it’s the same. Bringing the troops back to the U.S., is a negative if the troops are sent home, but not if they are sent to a base in the U.S. Cutbacks in the building of weapons is a negative to the economy if the arms are built here. Not all weapons are built here. The one cutback that would be very negative to the economy is cuts in SS and Medicare because most of that money gets plowed into the economy.

        • yttik says:

          Yes, it certainly matters where exactly the cuts are made. It’s just that so much of the spending that is designed to “help” the economy is making things worse. Road work, for example, is currently digging up the streets in front of businesses and making it impossible for them to bring customers in. That’s what’s happening in my neck of the woods. We created a few temporary jobs in road work but we ran several shops out of business in the process.

    • Three Wickets says:

      I think Washington is mainly trying to send the right signals to the markets, whatever the long term outcome and consequences, but they’re making a mess of it. In any case the private sector is paying attention to the Fed and commercial markets here and abroad. Government can only do so much. Businesses will probably find their way (or not) on their own for the most part.

  8. Dario says:

    Agreeing with 1539days post, what we see is a proxy fight, and therefore the wrong fight. The debt limit is about paying the bills that congress has already committed to pay when the budget is passed. The Republicans are reneging on payments that the past congress appropriated. That’s not a way to run a government. The budget is the proper place for the fight about how much to spend for what.

    • WMCB says:

      The budget is the proper place for the fight about how much to spend for what.

      Yes, it is. Unfortunately, the Democrats have abdicated their responsibility and tried to duck out of that fight for well over 2 years now, by refusing to produce a budget.

      • Dario says:

        True, and I’m happy the Republicans are giving Obama a heartburn, but I also see that the proxy fight is out place. The Democrats were incompetent, but they were thrown out of the house, and the Republicans are in charge of the house, and have lots of votes in the senate to get a budget that’s to their liking. That’s where the fight ought to be.

        • 1539days says:

          This is where Republicans have something of an upper hand. If there is no debt limit increase, the government has to stop spending. They were able to steal from government pensions until now, and those have to be paid back, but it’s getting into real money. Remember, just because money was allocated for something doesn’t mean it has to be spent.

  9. Mimi says:

    I think there are several proxy fights going on. Obama completely sidelined the Senate. The entire Senate, both Republicans and Democrats were furious with the little tyrant. The House Democrats were purposely left out and excluded from stunts that Obama was trying to pull with Boehner. Then there was the proxy fight with Cantor who Obama was trying to dominate to show Boehner who as smarter (Boehner is a little slow in my opinion, not stupid however).
    both parties in both chambers have had enough of his sneaking around and lying to their counterparts.

    Obama is basically a junior high mean girl clique rat trying to dominate the gang. Boehner in essence told him yesterday that he isn’t invited to the party and he is stuck with the ugly, stupid boyfriend (the press) that no one else wants. Hence the emotional, nonsensical meltdown euphemistically called a press conference where his press pals commiserated and lobbed softball supportive questions to the aggrieved mean girl. Obama and the press are children and have been sent to timeout.

    • Mary says:

      I love that!

      I couldn’t help thinking while Obama was having his press conference melt down, that all the talk about his caring about “the people” was nonsense, and that The One was actually just mad that the grownups had given him a timeout.

      It wasn’t about US for Obama. It was all about HIM.

      How dare them, eh? LOL

      • Mimi says:

        Obama is a classic narcissist. When and if he thinks of anyone else it is in the form of what can they do for me and how can I manipulate them. He is not a leader but rather a manipulator. I have thought for some time that he may have some sort of development disorder which appeared in childhood because he acts like a twelve year old often.

        • Mimi says:

          It just occurred to me that Obama has abandonment issues and freaked because someone walked out on him when he was pulling his act like a twelve year old crap. The Republicans are messing with his head big time.

        • Mary says:

          I think you’re right about the abandonment thing–Dad and Mom , and then all the paternal political role models who helped “mold” him.

          Running out to the press (stroke me, stroke me, I’m feeling needy) was stupid, though—-made him look weak, not strong.

          After all, he’s been “left at the altar” several times. Barf.

        • foxyladi14 says:

          8 year old too.. 😆

    • angienc says:

      Very good take. Obama as a high school mean girl crying about not having his calls returned & no date to the prom. LOL! I bet the press doesn’t run a picture of him as a big baby in a diaper like they did with Newt back in 1995 after he complained about where he had to sit on AF1. Don’t get me wrong, Newt deserved it then but Obama deserves it double after that that display yesterday.

      • Mimi says:

        The MSM won’t run anything but the super conservative blogs will. May I suggest to them Obama in a glittery prom dress with too much makeup holding a huge purse with a pug in it.

  10. Krugman’s awake
    http://krugman.blogs.nytimes.com/2011/07/22/conceder-in-chief/

    I’d like to believe that it’s all 11-dimensional political chess; but at this point — after the midterm debacle, after the big concession on taxes without even getting a raise in the debt limit — what evidence do we have that Obama knows what he’s doing?

    Ummm, the “evidence” has been blowhards like you (sometimes) saying so.

    • DeniseVB says:

      Whoa, when you’ve lost Krugman………:D

    • DandyTiger says:

      Notice he prefaces it with how the Repubs are crazy of course, and so it’s really their fault in the end. Of course their agenda would be horrible for the country if they had free reign. Duh. But that’s not the point.

      If Obama didn’t have the Republicans, he’d have to make them up.

      Nope, Krugman’s still on the kool-aid. He’s just seeing a tiny glimpse of reality every once and a while.

  11. DeniseVB says:

    While we were sleeping…..FAA partial shutdown ?

    http://www.nj.com/news/index.ssf/2011/07/partial_faa_shutdown_in_effect.html?flv=1

    Can’t find it in the MSM ?? Mostly local stories so far.

  12. Dario says:

    11 dimensional chess player = manipulator in chief

    Mimi, I see your point.

    • Mimi says:

      He also bargains with things that do not belong to him. Like Social Security and Medicare which belongs to the people who contributed and are contributing to it. It is essentially another proxy fight. The elite thieves want it so Obama steps in as PROXY to offer it up. Obama has offered to sell his neighbors cutting horse for a goat. Not only is it a spectacularly awful deal, it isn’t his to give away with to begin with.

    • Pips says:

      Now, I’ve always been of the opinion that what he’s actually playing is 11 dimensional golf.

      And that my friends, is never a good thing. 😉

  13. WMCB says:

    Just saw a comment I loved.

    Obama is having Clinton dreams in a Hoover world.

  14. Three Wickets says:

    More interesting detail on Obama fundraising.

  15. Three Wickets says:

    New Republic on where Obama was taking the deal..

    And it was a deal that, like Obama’s previous offers, was strikingly tilted towards Republican priorities. Among the provisions Obama to which Obama had said yes, according to a senior administration official, were the following:

    Medicare: Raising the eligibility age, imposing higher premiums for upper income beneficiaries, changing the cost-sharing structure, and shifting Medigap insurance in ways that would likely reduce first-dollar coverage. This was to generate about $250 billion in ten-year savings. This was virtually identical to what Boehner offered.

    Medicaid: Significant reductions in the federal contribution along with changes in taxes on providers, resulting in lower spending that would likely curb eligibility or benefits. This was to yield about $110 billion in savings. Boehner had sought more: About $140 billion. But that’s the kind of gap ongoing negotiation could close.

    Social Security: Changing the formula for calculating cost-of-living increases in order to reduce future payouts. The idea was to close the long-term solvency gap by one-third, although it likely would have taken more than just this one reform to produce enough savings for that.

    Discretionary spending: A cut in discretionary spending equal to $1.2 trillion over ten years, some of them coming in fiscal year 2012. The remaining differences here, over the timing of such cuts, were tiny.

    • Dario says:

      That kind of information will send the obots to chug some more koolaid 🙂

      • Mimi says:

        They already have koolaid poisoning and their teeth have turned red from the food dye. People are starting to truly understand they are ghouls.

    • Dario says:

      Krugmans labeled his post, “What Obama Was Willing to Give Away” I think he should change it to “What Obama is Willing to Give Away”. Obama is willing, wanting and waiting to give away the store to the rich.

    • 1539days says:

      If Obama agreed to anything (since it was sourced by a staffer) like this, I think he’d be using it to rally the troops later when he blames the Republicans for taking the country hostage.

    • Lola-at-Large says:

      Screw that, put Warren up! That would make a real difference in Obama’s re-election chances. Nader is something people won’t fall for again. Warren is a real choice. (got no beef against Nader, but that ship has sailed)

  16. OT re the Norway ‘terrorism’.

    That is, the ‘terrorism’ that turns out to be a Norwegian ANTI-Islam nut.

    http://www.salon.com/news/opinion/glenn_greenwald/index.html

    =============

    My summary of some of Greenwood’s points:
    First everyone assumed it must be those Muslims again, because “Not all Muslims are terrorists, but all terrorists are Muslims.”

    The man was caught in the act, the police almost immediately released his name and background, and his internet postings were broadcast. Christian Rightwing anti-immigrant.

    But the Islam bashing went on in the US media. As Greenwood shows well in his Salon article.

    The reaction reminds me of 1963, when everyone assumed that the assassination must have been by Dallas rightwingers — and kept on bashing them even when it turned out to be a communist. More recently, everyone assumed Loughner must have been a follower of Palin — and kept on bashing her even after it turned out otherwise. Pretty soon they were saying she had produced a ‘climate of anger’ that had somehow affected him by telepathy or something.

    • yttik says:

      Do you ever find it odd that we’ve politicized our religious extremists? I mean, extremist Muslims are practically viewed as left wing, while extremist Christians are the right. This morning people are kind of gleefully proclaiming, “see, it was one of yours this time, not one of ours!” It’s kind of sick. Extreme Muslims are not exactly gay friendly defenders of women’s rights, they’re actually nearly perfectly aligned with extreme Christians.

      I read a recent poll that said after Obama killed bin laden, anti Muslim sentiment from conservatives actually decreased, while increasing on the liberal side. It’s like, “my guy shot a Muslim, go my guy, Muslims are bad!” The otherside was like, “meh, Muslims aren’t a big deal anymore.”

      • Well, for me it’s not so much “He’s one of yours, so yours are all bad” as “This proves it wasn’t a Muslim plot, the Muslims are innocent this time. So pls correct your premature statements.” (Not YOU you, of course.)

        I’d probably be shouting it just as loud if he were a Buddhist or an atheist or something. ;-

        Good point about the Bots flipping: Only Obama can kill Bin Laden (without their criticism), or attack Social Security, etc.

      • 1539days says:

        Right wing is a pretty common adejctive for liberals to use against people. Did he oppose Obamacare, like Michael Bloomberg suggested with the Muslim truck bomber?

        Apparently, his 5 year old blog was found, with links to Jihad Watch and Little Green Footballs, which is hilarious since the owner of LGF turned Obot about 3 years ago. There may also be some shenanigans with his Facebook page.

      • angienc says:

        Extreme Muslims are not exactly gay friendly defenders of women’s rights, they’re actually nearly perfectly aligned with extreme Christians.

        Word. Two sides of the same coin. Which just proves my maxim that GOD and RELIGION have nothing in common.

  17. Lola-at-Large says:

    If the blogging-powers-that-be want a new thread, I’ve got one in the queue about Rep. Wu. I would recommend pairing it with a pic of Wu in his tiger costume: http://www.google.com/search?q=Wu+tiger&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&ie=UTF-8&tbm=isch&source=og&sa=N&hl=en&tab=wi&biw=1333&bih=532

    • votermom says:

      Lola, I think you can publish it whenever you feel it’s ready. To insert a pic, copy the url of the one you like and use the thingy for “insert image” / “from url”.

      • Lola-at-Large says:

        It doesn’t allow me that option. I am not able to use the photo feature (don’t know html well enough to put it in that way) and I can only “submit for approval”.

        • Lola-at-Large says:

          It is ready to go otherwise, though. Sorry I’m so helpless!

        • votermom says:

          That’s wierd. Myiq might knwo why.
          For this one I’ll try to put the pic in and public it for you.

        • Lola-at-Large says:

          Thanks. I assume I got limited privileges because I haven’t blogged with you all before. I’m okay with it. I can work my way up in the trust department. 🙂

        • votermom says:

          Lola, there are 2 versions — one has a longer blockquote than the other. Which one do you want to go with?

          I doub’t if there is any difference in access – it’s more likely to be some kind of wp wonkiness.

        • Lola-at-Large says:

          Weird. Sorry. I didn’t change anything in the block quote. Just make sure the version you use says “Wu says the incident was consensual” directly under the block quote.

          I looked, and it looks like the second version may be an auto-save from when you were looking at it. I’ve amended it so the autosave version should be gone now.

        • Lola-at-Large says:

          Sorry to create extra work for you, VM!

        • votermom says:

          No problem.
          I wonder if things will fix themselves the next time you log in to wp. If not we should ask the klown.

        • Lola-at-Large says:

          Will do. Thanks again for the help.

    • Lola-at-Large says:

      Forgot: Feel free to edit as necessary. I tried my best to be very careful, but I trust the judgement of fellow bloggers here.

  18. Dario says:

    h/t Zero Hedge

    Layoffs, Layoffs Everywhere You Look There Are Layoffs

    This summer the pace of layoffs seems to be accelerating all over the nation.  Just check out what has been happening over the past few weeks…

    -Lockheed Martin has made “voluntary layoff offers” to 6,500 employees.
    -Detroit is losing even more jobs. American Axle & Manufacturing Holdings has told the remaining 300 workers at its manufacturing facility in Detroit that their jobs will be ending in early 2012.
    -Layoff notices have been sent to 519 employees of Milwaukee Public Schools, and more than 400 open positions are going to go unfilled.
    -The Gap has announced that up to 200 stores will be closed over the next two years.
    -Cisco has announced plans to lay off 9 percent of their total workforce.
    -Chicago Mayor Rahm Emanuel says that 625 city employees will be losing their jobs as a result of cutbacks.
    -Pharmaceutical giant Merck recently dumped 51 workers from an office in Raleigh, North Carolina.
    -Perkins has revealed that they will be closing 58 restaurants.
    -This week, Goldman Sachs announced that they will be eliminating 1,000 jobs.
    -Cracker Barrel is rapidly reducing staff at its headquarters.
    -Telecommunications and web marketing firm Crexendo has announced that it will be laying off about 30 percent of its workforce.
    -Borders has announced that they will be shutting down their remaining 399 stores and that 10,700 employees will lose their jobs.
    -Now that the space shuttle program has ended, thousands of NASA employees will be losing their jobs.

    • votermom says:

      What an Oconomy.

      Now that the space shuttle program has ended, thousands of NASA employees will be losing their jobs.

      That’s the one I can’t understand – why end the program? It’s not like they are supposed to generate profits. What a waste.

      • DeniseVB says:

        I remember as a kid Kennedy starting the space program to inspire us and take our minds off of air raid drills and the scary Russians.

        It took Obama to squash it like a bug, and probably pay Russia, and other countries, to let us go up with them. Pay them lots and lots of money 😦

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