Of course, in order for the US to suffer a debt crisis like they have in Greece, the rest of the world would have to go insane and begin to hate their money. Everyone would have to cash in all their bonds at once, regardless of maturity. For bondholders as a whole, this would result in taking a loss of billions of dollars. So those holding the most bonds would have to have a damned good reason to do it. This would only happen if everyone had some reason to believe that the bonds were worthless -- which, of course, no one does. Ryan's "day of reckoning" is fearmongering. There is no imminent run on America's bank. In fact, if there were, it would be irresponsible of Ryan to talk like this, since it would only serve to weaken confidence in the solvency of his own government. The fact that he feels comfortable issuing the warning so publicly is proof enough that he doesn't believe it. Then again, I suppose it's possible that he does think it's true and he's just an unhelpful idiot. Go ahead and pick whichever explanation suits you best; whether he believes his own nightmare scenario isn't relevant to this discussion.
What is relevant is a simple question; "If the deficit is the problem, what are you going to do about it?" Up until now, Republicans have felt safe offering sham alternatives to Democratic solutions. The GOP hasn't had to come up with anything that would actually work, since their opposition to most legislation has been a matter of political strategy; oppose everything, make Washington completely dysfunctional, then run against a dysfunctional congress by blaming everything on Democrats. It hasn't been especially good for the country, but it's good for the Republican Party and that's what really counts.
In the ideas department, Republicans have only have one product -- tax cuts. How this is supposed to reduce the deficit is a bit of a mystery, although House minority leader John Boehner has given a good try at explaining it.
"You equate the idea of lowering marginal tax rates with less revenue for the federal government," Boehner told reporters who questioned the "less money equals more money" math. "We've seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment, and more people paying taxes. And if you look at the revenue growth over those 30 years, you've got a prime example of what we've been talking about."
"This is practically the reverse of the truth," counters Talking Points Memo's Brian Beutler. "In the years after the Ronald Reagan and George W. Bush tax cuts, economic growth and employment were significantly lower than they were after Bill Clinton's 1993 tax increases."
In fact, the most recent round of Republican tax cuts make up a lion's share of the projected deficit.
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"Lower taxes=more revenue" makes for a nice theory, but no one has ever actually gotten it to work. So, if the deficit really is the problem, you've got to cut something. Something big. Something bloated.
U.S. lawmakers and watchdog groups on Friday called for a dramatic revamp of the defense budget to reverse widening U.S. deficits, including termination of the $382 billion Lockheed Martin Corp (LMT.N) F-35 fighter.
Representative Barney Frank, one of the chief negotiators working on financial regulation reforms, convened a bipartisan task force that identified nearly $1 trillion in budget savings that could be culled from the Pentagon budget through 2020.
"We are looking down the barrel of record deficits that threaten our national security," Laura Peterson, policy analyst with Taxpayers for Common Sense and a task force member, told a news conference. "There's plenty of fat to cut from the military budget without compromising our safety."
The United States currently spends more money on our military than any nation in the world. A lot more. In fact, a crazy lot more. In 2008, our military spending made up nearly half -- 48% -- of all military spending in the world. If Republicans really were the deficit hawks they like to pretend to be, they'd jump right on board here. But, of course, Republicans aren't serious about the deficit. They'd rather have you believe that the relative pittances we spend on social programs, foreign aid, and the commons make up most of the deficit. They'll trim around the edges, cutting back on education, unemployment benefits, and by privatizing whatever they can, but they'll never be able to cut that $1 trillion that way. Especially not if they stick to their tax-cutting fantasy economics. Deficit reduction is just an excuse to attack programs they oppose on ideological grounds.
"[Republicans are] quite happy to borrow hundreds of billions to spend on defense, because they just happen to like spending money on defense," writes American Prospect's Paul Waldman. "They don't find unemployment benefits, or health care, or any of a hundred other things we could spend money on to be particularly worthy, but instead of just saying so, they say, 'Well, we'd love to, but we just can't afford it.' You can't call yourself a 'deficit hawk' if the only programs you want to cut are the ones you don't like anyway."
Whether Ryan or Boehner join in on cutting military spending will determine whether or not they're serious about the deficit. You may be able to argue that the US needs a much larger military budget than other nations (I don't think it'd be a good argument, but that's not the point), but there's absolutely no way you can argue that we need to make up half the world's market. That is just insane.
So those are the choices; trim around the edges and puff yourself up into a phony deficit hawk or take a meat axe to the military budget and become an actual deficit hawk.
For myself, I don't think it's much of a mystery which way Boehner and Ryan will go.
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