Time to End Manufactured Debt Crisis

Great editorial by the Sacramento Bee on this manufactured debt crisis. 

Some highlights:

"The gamesmanship that has taken Congress and the White House to the brink of defaulting on the nation's debt is a classic contest of chicken, compounded by miscalculation and reckless chutzpah."

"The time for posturing and tactical maneuvers has long passed. The vast majority of Americans want their leaders to end this manufactured financial crisis, now, and not just with stopgap measures."

"GOP freshmen campaigned for office on pledges to shrink the government and not raise taxes. Many feared they will lose primary fights in 2012 if they don't honor those pledges. "

"Moreover, any reasoned discussion about reducing federal deficits must confront how the federal government created them in the first place. On this point, House Republicans are suffering from amnesia.

As the record shows, President George W. Bush inherited a surplus when he took office, and could have maintained those surpluses had he acted prudently. Instead, he pushed through tax cuts that cost the government $1.8 trillion between 2002 and 2009. He also plunged the nation into two wars that cost nearly $1.5 trillion during that period. "

"Those two actions were the drivers of a ballooning federal debt over the last decade – far more than Bush-era discretionary spending, Wall Street bailouts, Medicare drug benefits and the 2008 stimulus. And guess who voted for the wars and tax cuts? John Boehner, Paul Ryan, Mitch McConnell and other Republicans were among them. "

"When Obama took office, he added to the federal debt, but hardly on the same scale as Bush. Obama's new policies – stimulus spending, health care reform, stimulus tax cuts and non-defense discretionary spending will cost $1.44 trillion by 2017. But that is far less than the $5 trillion that Bush racked up, according to an analysis published Sunday by Teresa Tritch in the New York Times. "

"Although Obama has been at times condescending in dealing with the GOP, he's rightly demanded a balanced approach toward reducing deficits. Had House Republicans seized the "Grand Bargain" that Obama seemed ready to endorse, they could have claimed victory for the steepest federal spending cuts in a generation, all for the price of modest increase in revenues. 

By walking away from that deal, House Republicans have heightened the chance of two ugly scenarios:
1) A stopgap measure that will put off for six months a more permanent decision on the debt ceiling, causing further damage to financial markets and the U.S. economy.
2) A default, which at one time seemed like crazy-talk but now, by Aug. 2, is within the realm of possibility."

You can read the complete editorial here.