Wall Street and the Debt Ceiling


By Mr. Curmudgeon

GOP House Speaker John Boehner talked a good game during his visit to the Big Apple. Speaking before the Economic Club of New York, Boehner said, “Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase.” He further demanded Democrats agree to $2 trillion in cuts before House Republicans give the green light to increase the nation’s debt limit.

Boehner pledged that the GOP will not allow tax increases because that “will hurt our economy… We do not have a revenue problem,” insisted Boehner.

If Boehner thought he had a sympathetic Wall Street audience, he was mistaken. Bloomberg News countered Boehner’s claim that the Obama administration’s stimulus spending was hampering real job creation. “His [Boehner’s] contention is at odds with the Congressional Budget Office finding last August that the stimulus package increased the number of people employed by between 1.4 million and 3.3 million and cut unemployment by between 0.7 percentage point and 1.8 percentage point.” The CBO failed to mention that these are primarily government jobs.

Mickey Levy, chief economist at Bank of America told Bloomberg the markets “will be nervous” until the debt limit issue is settled. “Both sides know they will not stop servicing the debt,” Levy insisted.

When Pete Peterson, founder of the private equity fund Blackstone Group, expressed concern at the House Tea Party contingent’s refusal to raise taxes, Boehner quipped, “I love you to death, Pete, but I don’t think taxpayers should be paying your Medicare premium.”

President Obama and the left like to portray themselves as defending the “little guy” against the “fat cats” who stingily refuse to allow Progressives to spread their wealth around. The ugly reality is that a symbiotic relationship exists between big government and big business (those select few institutions Washington deems “to big to fail”). Bailouts, short-term low-interest loans, government purchases of corporate bonds and sweetheart government contracts assure the progressive state many friends and, more importantly, fat cat campaign contributors.

Remember British Petroleum? After the Gulf oil spill last summer, the president said he was looking through BP’s corporate structure to find “whose ass to kick.” It worked. According to POLITICO.com, Obama received a $77,051 contribution from the international oil conglomerate.

Republican talk-radio hosts tell us that big business is our friend. That what is good for corporate America is good for America. What they fail to realize is that big government, which distorts nearly every aspect of our society – from the value of US currency to the value of an unborn life – has transformed our financial and business monoliths into pathetic entities who rely on government handouts and regulatory protections against competition.  

The markets are worried Speaker Boehner will carry through with his threat not to raise the nation’s debt ceiling. They should relax. The establishment GOP House leadership has already said it intends to allow Washington’s spending machine to borrow even more money from China. Establishment Republicans don’t want to rattle the markets whose Dow and S&P components need government to service US debt to China in order to keep Wal-Mart packed with cheep goods manufactured with Chinese slave labor…. in another twisted symbiotic relationship.

Tea Party America has its work cut out for it. Arrayed against it are powerful interests determined to maintain the suicide pact of today’s debt-saturated status quo: Big Government bureaucracy, the two-party Progressive high priests of The-State-Is-God cult and the corporate welfare-queens who receive billions in taxpayer dollars, some of which is funnel into the campaign coffers of their bipartisan Washington benefactors.

As it turns out, the “fat cats” Obama derides and establishment Republicans defend are, in reality, the Progressive’s best friend.