A missed opportunity in a self-created crisis

Raising the debt limit should not be an issue.  In fact, raising the debt limit is one of the the most mundane and routine things the government does. Until now.

Now we are facing a self-made crisis.  Whether that crisis is a result of a decade of unchecked spending and ill-advised tax cuts as some claim or a product of government gridlock as other say, it is a problem we created.  And now we are only a week away from running out of money.

Despite the fact that this is a self-made crisis, it is still an opportunity.  For all my roasting of the Tea Party, they are right that we do need substantial, long-term budget cuts.  This is an opportunity to enact some of those cuts.

We are on the verge of missing the opportunity.  Tea Party intransigence is really the only obstacle.  Democrats have reluctantly agreed to cuts in entitlement programs and normal Republicans had agreed to revenue increase through rewriting the tax code.  In fact, the deal was more than Republicans should have hoped for, prompting a former Republican House leader so say, "My God, declare victory."

But that didn't happen and we are inching closer to August 2nd, the date when the government will have to decide which bills it will pay and which it won't.  There is no good scenario; even if we raise the debt ceiling, the current political situation does not lend itself to a deal that would put us on the right track.  We need substantial cuts and substantial new revenue and neither seems likely.

Democrats for their part hate to see entitlement cuts even a little bit even though, as John Boehner put it last night, those programs won't exist for his children if we don't make changes to them.

However Boehner and his Republican counterparts are propagating a myth that has been worn out for decades - that low taxes lead to economic growth.  This manipulation of Reaganomics ignores the facts of Reagan's presidency as well as Clinton's presidency.  Bruce Bartlett, a former advisor to President Reagan blames the Bush tax cuts for the current recession.  Yes, low taxes stimulate growth but they are not the be-all-end-all to the economy.  Somehow this has become Republican doctrine even though the man given credit for it didn't believe it.  President Obama invoked Reagan in his speech to America last night, pointing out the President Reagan did raise taxes and called on wealthy Americans to pay their fair share.

It is not too late to escape this self-made predicament, but more importantly it is not too late to take advantage of this situation.  President Obama and John Boehner made their cases last night in the latest round of sparring, but both men know the reality of the situation and both are willing to make the necessary compromises.  The problem is the Tea Party whose members have taken a good idea and completely lost sight of what needs to be done.  If those members of the House can be convinced that their position is disastrous for America - which it is - then perhaps we will take advantage of our self-made crisis.