Thursday, October 3, 2013

Delusions of Danger

Here we are. It's Day 3. The madness continues. And it's all due to delusions of grandeur.

The G-O-TEA crazies responsible for the Shutdown Shitfest are trying their best to distract everyone from what they're actually doing. They're now trying to deflect blame onto Senator Harry Reid (D). And of course, they're trying to villainize President Obama.

Why are these teabaggers lying about their desired shutdown showdown, especially when they demanded this all along? There, we just answered our own question in asking it aloud. They wanted this. But because they're increasingly getting blamed for it, they're now attempting these desperate gambits to deflect blame onto Democrats.

Oh, and they're trying to deflect blame in advance of the next debacle they will force the nation into if they don't quit this embarrassing temper tantrum soon.

The debt-limit impasse could cause credit markets to freeze, the dollar to plummet and interest rates to rise precipitously, the Treasury Department said in a report released Thursday. A default might prove catastrophic, the report said, and could potentially result “in a financial crisis and recession that could echo the events of 2008 or worse.”

“As we saw two years ago, prolonged uncertainty over whether our nation will pay its bills in full and on time hurts our economy,” said Treasury Secretary Jacob J. Lew in a statement urging lawmakers to act. “Postponing a debt ceiling increase to the very last minute is exactly what our economy does not need – a self-inflicted wound harming families and businesses.”

The report shows that the Congressional debt-limit standoff in 2011 hurt consumer confidence, small business confidence, household wealth and the stock market, with ramifications for lending and the economic recovery.

“A precise estimate of the effects is impossible,” the report says, “and the current situation is different than that of late 2011, yet economic theory and empirical evidence is clear about the direction of the effect: a large, adverse, and persistent financial shock like the one that began in late 2011 would result in a slower economy with less hiring and a higher unemployment rate than would otherwise be the case.”

If the G-O-TEA crazies don't give up their delusions of grandeur soon, we will all suffer the consequences. Oh, and so will the rest of the world. That's why Christine Lagarde, the head of the International Monetary Fund (IMF), is now begging Congress to get its act together and stop the insani-TEA.

"In the midst of this fiscal challenge, the ongoing political uncertainty over the budget and the debt ceiling does not help. The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy.

"So it is 'mission-critical' that this be resolved as soon as possible."

Lagarde's speech followed an appeal by senior figures on Wall Street for a budget to be passed in Washington. Shares opened lower in New York, while the interest rate on one-month Treasury bills rose. Mario Draghi, the president of the European Central Bank, has also warned of the risks from a protracted federal shutdown.

The IMF managing director said America's recovery was being held back by over-hasty budget cuts. "Households are in better shape, the housing sector is looking brighter, and the private sector engine is humming again. And yet, growth this year will still be too low – below 2% – due to too much fiscal adjustment. This should ease up next year, with growth about a percentage point higher."

We've discussed before how and why austerity has held back the robust economic growth we need to fully recover from the last recession. But now, G-O-TEA stupidi-TEA may cause the next recession. And it's all because of their delusions of grandeur.

What started as a silly farce has devolved into real danger. And no matter how much Congressional Republicans try to spin it away, it's happening and it's all their fault.

The G-O-TEA delusions of grandeur have become flat out dangerous. For the sake of global economic security, they need to take their medication, drop the hostages, and end the manufactured crisis... NOW!

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