Do House Republicans Have Maximum Leverage?

John Dalt at GaltStock Research has an article I think you will be interested in on the debt ceiling, and has given his permission to reprint. Most of you will agree that Republicans will not serve the best interests of this country by raising the debt ceiling, even with comparable cuts, and shame on us if we believe cuts can be comparable – or permanent. In an email Dalt said, saying Republicans have “maximum leverage now, is an understatement.” The “maximum” part of that leverage is, of course, refusing to raise the debt limit and insisting on spending cuts.

Note that in the third paragraph of John’s article he quotes Obama theorizing that Republicans think he is “stupid.” Dalt says he has not heard that term applied to the president, but, of course, you and I have. To be clear, John’s last name is “Dalt,” but the name of his website is Galtstock. There is a disclaimer that Galtstock is not affiliated in anyway with Ayn Rand’s John Galt or Ayn Rand, but he provides a handy link to aynrand.org.

Intractable Negotiators
by John Dalt, Galtstock Research

Moody’s warned on June 2, 2011 that it “would consider cutting” the U.S. credit rating. Moody’s placed a time limit on the negotiations to make substantial progress on negotiations to raise the debt ceiling until mid-July.

Treasury Secretary Geithner went to Capital Hill and met with first term lawmakers. The House Republicans in the freshman class are fire breathers on raising the debt. Geithner said he had a “good meeting.” Representative Kristi Noem said, “Secretary Geithner doesn’t get it…we are not going to give this administration a blank check to spend even more.”

You may not know any of the freshman republicans that were elected with help from the ‘Tea Party.’  It would be amusing to let them handle the negotiations with the White House.  President Obama has played his hand on certain changes he will not accept.  After the negotiations for the last continuing resolution, he told an audience on a campaign stop he asked the republicans “Do you think I am stupid?”

That has never been a term I have heard applied to the president.  But are the republicans?  What would happen if the republicans were intractable with their demands?  Who would blink?  Why not go for broke?  Look at the two sides, one wants to shrink government, one wants to grow government.  Doing nothing shrinks government.  One side does not have to move to accomplish their goals.

When you look at the negotiations in this way, any concessions by the House are done voluntarily.  If the Senate and White House do not pass and sign the House’s legislation, who is to blame if the debt ceiling is not raised?  If you think this is extreme, just remember the reason  our government is in the present condition it is in.

Rahm Emanuel said, “Never waste a good crisis?” Now, the shoe is on the other foot, and the republicans have a crisis that allows them to move their agenda. Why should they negotiate? Did Nancy Pelosi negotiate? Harry Reid? President Obama?

The end result is the government shrinks.

In business dealings over the years, I have had to deal with people that were intractable with their positions. The choice becomes clear after a few meetings. Either do business their way, or don’t do business. One simply has a decision to make.

If House Republicans do not follow this path, they allow the President to claim credit for any improving economic conditions during the coming Presidential campaign.  The only path to victory for our country and the elections in 2012 is to destroy his ideology, now.

A good start would be a House resolution instructing the Treasury Department to take no more ‘extra-ordinary measures’ concerning the debt limit and the Administration to begin shutting down the government, spending only money received until raising the debt ceiling is resolved.

Would someone please explain this to House Speaker Boehner?  Any concession is voluntary.  They are not going to like or respect you in the morning!  Get over it.

End John Dalt article.

Learn more about John Dalt and his services here.

Another great political cartoon by Steve Sack at the Star Tribune.

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  • Borrowing from the government employee pensions to ward off debt ceiling problems sounds like a form of check kiting. Geitner and the Obama admin should be ashamed. They cannot spend this money. They have not been authorized by congress to do so and their overspending is a national disgrace, not to mention a usurpation of congressional powers.

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