The Spending Cuts Trap For the Republican Party [w/videos]

Lincoln, Greenbacks and Debt Cancellation

Having survived the Fiscal Cliff, Republicans on the Hill are getting ready for the Debt Ceiling fight. President Obama hasn’t been sworn in for his second term, and he already has used his honeymoon capital to club the GOP. Smart observers, among whom none is smarter than Charles Krauthammer, figured early in this process that Obama has absolutely no intention to cut spending, and is using the issue politically as a club to destroy the Republican Party.

In the past couple of weeks, the Administration has floated a view that has shocked conservative voters. In talks with Speaker of the House John Boehner, the President finally got tired of hearing the Ohioan talking about spending cuts and flatly told him, “We don’t have a spending problem.”

To a conservative, who typically knows just how fantastic our debt has become, this is as shocking as hearing someone argue that the heliocentric solar system is false. It suggests an immense disconnection with reality. One starts to put all the talk about how Obama might harbor malevolence toward America into another light. After all, this is the same President whose Party hasn’t proposed a budget in three years. It leaves conservatives searching for opportunities to fight the President on favorable terrain.

The truth might be that this time Krauthammer doesn’t know how right he is. “We don’t have a spending problem” might be an indication that Obama has seen into the basic fictionality of the US debt; that we will never be like Greece, because our sovereign Government has the power to print currency to repay any debt. The United States can never actually default.

There’s no questioning that neither Party has the stomach to be straightforward about spending cuts necessary to “address” the deficit or debt. That the Democrats have no reason to run on spending cuts is obvious. After all, the very basis of the Democratic Party is dividing the country into constituent groups and promising goodies to each. Mitt Romney was perfectly right about this. But Democrats were quite right that Romney, while insisting on cuts, was never very specific about what cuts he would make. The panic involved in going public with cuts was never so egregiously revealed as in the Romney campaign’s treatment of running mate Paul Ryan. On the one hand, Romney did pick Ryan, giving the hope of tough fiscal responsibility. But then the campaign immediately made it clear that it was not going to accept Ryan’s budget. The Romney campaign would run on the Romney budget, the entire advantage of which was that it was vaguely detailed and therefore less subject to demagoguing than Ryan’s, which had already been graphically rendered as a GOP effort to “Push Granny Off the Cliff.”

Republicans are typically responsible people who have inculcated sound financial habits. If you want to get a glimpse of just how deep that understanding is among the sort of person attracted to these habits – and especially being free of debt – start listening to the Dave Ramsey Show on the radio.

For Conservatives, this is a deeply moral issue, touching upon our power to live within limits and to defer present gratification – all the habits that lead to personal economic success, and even personal freedom as a political agent. Conservatives know what you do with a debt. You pay it off, and if you have to live on beans and rice for three years while you do it, then this is only ennobling to one’s character. Conservatives look on debt the way a pro athlete looks at fat. Nothing could be more natural than to apply that thinking to the United States more generally.

The problem is that the US debt is not like personal debt, and those differences need to be paid attention to. Because as things now stand, Obama has set a trap for the GOP, and, in its eager puppy-dog fashion, the GOP is walking right into it. It will take more than ten years to bring the $16 Trillion American debt under control through straightforward cost-cutting means. For as long as that debt lasts, the Democrats will posture as the party that’s fighting to protect your student loans, or Grandpa’s dentures, or food for hungry children. For as long as the debt lasts, the Republican Party will be the party of the haircloth shirt, telling America to eat its vegetables. This is a formula for whittling the GOP back not just to minority status but obscurity. And for what? To impose austerity upon the American people to such an extent that enduring austerity would become the defining characteristic of our generation. Perhaps we should reevaluate this before it becomes electorally defunct. Is the GOP really going to walk the plank in defense of the financial industry’s unConstitutional control of the money supply? Are we willing to gut our defense for the sake of maintaining the status quo, when many times in our history we have essentially hit “Reset”?

This is what the first Republican President did.
It’s how a small 19th Century Federal Government paid for the Civil War. Two videos give a good introduction to this topic:

The best video I can find on this topic happens to be British:

This is something Americans a century and more ago knew much better than we know it today. Today, we take the financial system as it exists as part of nature, and forgotten that it is an entirely human work. Knowledge of the real nature of this system is scattered across our politics, and tends to the wings of each party. Among Democrats and the left-leaning, one finds this knowledge – a truly occult knowledge – among members of the Occupy movement. On the right, one finds it among members of the Tea Party and Ron Paul supporters. Neither is likely to take over its respective major Party. Neither is likely to cooperate with each other, either. Further complicating this subject is that so often, those who hold an understanding it have tended to be disreputable anti-Semites – as though every Jewish shop owner or doctor were secretly governing the world behind closed doors, or are even personal acquaintances with the few thousand people of all backgrounds who do.

Debts do get cancelled. Anyone who makes payments knows this from experience – everything is negotiable. Entire countries have their debts cancelled without the world coming to an end.

President Obama seems to be getting the point that there is something essentially imaginary about this debt. Republicans dare not allow themselves to be caught in the position of being its sole political defenders if doing so means austerity measures for ordinary Americans. Whoever is first to this insight wins the future. Whoever defends the status quo will be consigned to the past.

By Todd Jackson

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