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The Economist wrote:



No way to run a country

The Land of the Free is starting to look ungovernable. Enough is enough
Oct 5th 2013

AS MIDNIGHT on September 30th approached, everybody on Capitol Hill blamed everybody else for the imminent shutdown of America’s government. To a wondering world, the recriminations missed the point. When you are brawling on the edge of a cliff, the big question is not “Who is right?”, but “What the hell are you doing on the edge of a cliff?”

The shutdown itself is tiresome but bearable. The security services will remain on duty, pensioners will still receive their cheques and the astronauts on the International Space Station will still be able to breathe. Some 800,000 non-essential staff at federal agencies (out of 2.8m) are being sent home, while another 1.3m are being asked to toil on without pay (see article). Non-urgent tasks will be shelved until a deal is reached and the money starts to flow again. If that happens quickly, the economic damage will be modest: perhaps 0.1-0.2% off the fourth-quarter growth rate for every week the government is closed. The trouble is, the shutdown is a symptom of a deeper problem: the federal lawmaking process is so polarised that it has become paralysed. And if the two parties cannot bridge their differences by around October 17th, disaster looms.

Battles over spending are nothing unusual—indeed, Congress has not passed a proper budget on time since 1997. But this battle represents something new. House Republicans are blocking the budget not because they object to its contents, but because they object to something else entirely: Barack Obama’s health-care reform, a big part of which started to operate this week (see article). Their original demand was to strip all funding from Obamacare. In other words, they wanted Democrats to agree to kill their own president’s biggest achievement. That was never going to happen. As the deadline for a budget deal approached, Republicans scaled back their demands. Instead of defunding Obamacare, they said that its mandate for individuals to buy health insurance (or pay a fine) should be delayed for a year.

The bane of budgetary brinkmanship

That may sound more reasonable, but it is not so, for two reasons. First, delaying the mandate could wreck the whole reform. Obamacare sits on two pillars. Everyone is obliged to have insurance, and insurance firms are barred from charging people more because they are already ill. If only the second rule applies, the sick will rush to buy insurance but the healthy will wait until they fall ill before doing so. Insurers will have to raise premiums or go bust, making coverage unaffordable without vast subsidies. Obamacare will enter a death spiral and possibly collapse. For some Republicans, that is the goal.

The second reason is that Republicans are setting a precedent which, if followed, would make America ungovernable. Voters have seen fit to give their party control of one arm of government—the House of Representatives—while handing the Democrats the White House and the Senate. If a party with such a modest electoral mandate threatens to shut down government unless the other side repeals a law it does not like, apparently settled legislation will always be vulnerable to repeal by the minority. Washington will be permanently paralysed and America condemned to chronic uncertainty.

It gets worse. Later this month the federal government will reach its legal borrowing limit, known as the “debt ceiling”. Unless Congress raises that ceiling, Uncle Sam will soon be unable to pay all his bills. In other words, unless the two parties can work together, America will have to choose which of its obligations not to honour. It could slash spending so deeply that it causes a recession. Or it could default on its debts, which would be even worse, and unimaginably more harmful than a mere government shutdown. No one in Washington is that crazy, surely?

Step back from the edge


America enjoys the “exorbitant privilege” of printing the world’s reserve currency. Its government debt is considered a safe haven, which is why Uncle Sam can borrow so much, so cheaply. America will not lose these advantages overnight. But anything that undermines its creditworthiness—as the farce in Washington surely does—risks causing untold damage in the future. It is not just that America would have to pay more to borrow. The repercussions of an American default would be both global and unpredictable.

It would threaten financial markets. Since American Treasuries are very liquid and safe, they are widely used as collateral. They are more than 30% of the collateral that financial institutions such as investment banks use to borrow in the $2 trillion “tri-party repo” market, a source of overnight funding. A default could trigger demands by lenders for more or different collateral; that might cause a financial heart attack like the one prompted by the collapse of Lehman Brothers in 2008. In short, even if Obamacare were as bad as tea-party types say it is (see Lexington), it would still be reckless to use the debt ceiling as a bargaining chip to repeal it, as some Republicans suggest.

What can be done? In the short term, House Republicans need to get their priorities straight. They should pass a clean budget resolution without trying to refight old battles over Obamacare. They should also vote to raise the debt ceiling (or better yet, abolish it). If Obamacare really does turn out to be a flop and Republicans win the presidency and the Senate in 2016, they can repeal it through the normal legislative process.

In the longer term, America needs to tackle polarisation. The problem is especially acute in the House, because many states let politicians draw their own electoral maps. Unsurprisingly, they tend to draw ultra-safe districts for themselves. This means that a typical congressman has no fear of losing a general election but is terrified of a primary challenge. Many therefore pander to extremists on their own side rather than forging sensible centrist deals with the other. This is no way to run a country. Electoral reforms, such as letting independent commissions draw district boundaries, would not suddenly make America governable, but they would help. It is time for less cliff-hanging, and more common sense.
Keep in mind what we have to lose if all this goddamn nonsense ends with us no longer being the world's reserve currency. If Obamacare is doomed to fail, let it fail in 2016.

More importantly, recognize that the nutty, overblown attacks on Obama's very modest reforms are actually a problem.

I understand that listening to a bloviating moron ranting about how it's the End of America if Obama isn't stopped is more fun than listening to someone saying "well, I don't think this is a good idea, but it probably won't be a disaster," but be real, the latter is possibly true, the former is utter bullshit.

I didn't like most of what GWB did as president, but I never called for the democrats to shut down the state and stop paying our debts to stop him. We need to get back to reality before we really do make ourselves look too crazy to enjoy all the benefits we enjoy from having such a powerful, economically stable nation.
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That ship has sailed already; the deed just hasn't been doen to fix a replacement.

To give an example, I used to have to pay rent in US dollars, a lingering effect of an inflationary crisis here in the 1980's. At one point in (I think) about 2006 or 2007, the bottom dropped out of the exchange rate as the US dollar spiraled down. I'd been pressing my landlord for a fixed price in shekels but he was reluctant. After this, we negotiated a price. No nobody here does rent that way, even though it used to be standard. People are less afraid now to be stuck with dollars than they were, but the local currency is viewed as far more reliable.

Were it not for the euro's own crisis, I expect the global makets would have shifted to euros by now.
 
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R. Frazier
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whac3 wrote:
That ship has sailed already; the deed just hasn't been doen to fix a replacement.

To give an example, I used to have to pay rent in US dollars, a lingering effect of an inflationary crisis here in the 1980's. At one point in (I think) about 2006 or 2007, the bottom dropped out of the exchange rate as the US dollar spiraled down. I'd been pressing my landlord for a fixed price in shekels but he was reluctant. After this, we negotiated a price. No nobody here does rent that way, even though it used to be standard. People are less afraid now to be stuck with dollars than they were, but the local currency is viewed as far more reliable.

Were it not for the euro's own crisis, I expect the global makets would have shifted to euros by now.
I agree that we've already fallen a ways, and we've been given a reprieve by the lack of a viable alternative, but I think that we still have plenty further to fall if we continue to act like a bunch of morons over every little dispute.
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rylfrazier wrote:
The Economist wrote:



No way to run a country

The Land of the Free is starting to look ungovernable. Enough is enough
Oct 5th 2013

AS MIDNIGHT on September 30th approached, everybody on Capitol Hill blamed everybody else for the imminent shutdown of America’s government. To a wondering world, the recriminations missed the point. When you are brawling on the edge of a cliff, the big question is not “Who is right?”, but “What the hell are you doing on the edge of a cliff?”

The shutdown itself is tiresome but bearable. The security services will remain on duty, pensioners will still receive their cheques and the astronauts on the International Space Station will still be able to breathe. Some 800,000 non-essential staff at federal agencies (out of 2.8m) are being sent home, while another 1.3m are being asked to toil on without pay (see article). Non-urgent tasks will be shelved until a deal is reached and the money starts to flow again. If that happens quickly, the economic damage will be modest: perhaps 0.1-0.2% off the fourth-quarter growth rate for every week the government is closed. The trouble is, the shutdown is a symptom of a deeper problem: the federal lawmaking process is so polarised that it has become paralysed. And if the two parties cannot bridge their differences by around October 17th, disaster looms.

Battles over spending are nothing unusual—indeed, Congress has not passed a proper budget on time since 1997. But this battle represents something new. House Republicans are blocking the budget not because they object to its contents, but because they object to something else entirely: Barack Obama’s health-care reform, a big part of which started to operate this week (see article). Their original demand was to strip all funding from Obamacare. In other words, they wanted Democrats to agree to kill their own president’s biggest achievement. That was never going to happen. As the deadline for a budget deal approached, Republicans scaled back their demands. Instead of defunding Obamacare, they said that its mandate for individuals to buy health insurance (or pay a fine) should be delayed for a year.

The bane of budgetary brinkmanship

That may sound more reasonable, but it is not so, for two reasons. First, delaying the mandate could wreck the whole reform. Obamacare sits on two pillars. Everyone is obliged to have insurance, and insurance firms are barred from charging people more because they are already ill. If only the second rule applies, the sick will rush to buy insurance but the healthy will wait until they fall ill before doing so. Insurers will have to raise premiums or go bust, making coverage unaffordable without vast subsidies. Obamacare will enter a death spiral and possibly collapse. For some Republicans, that is the goal.

The second reason is that Republicans are setting a precedent which, if followed, would make America ungovernable. Voters have seen fit to give their party control of one arm of government—the House of Representatives—while handing the Democrats the White House and the Senate. If a party with such a modest electoral mandate threatens to shut down government unless the other side repeals a law it does not like, apparently settled legislation will always be vulnerable to repeal by the minority. Washington will be permanently paralysed and America condemned to chronic uncertainty.

It gets worse. Later this month the federal government will reach its legal borrowing limit, known as the “debt ceiling”. Unless Congress raises that ceiling, Uncle Sam will soon be unable to pay all his bills. In other words, unless the two parties can work together, America will have to choose which of its obligations not to honour. It could slash spending so deeply that it causes a recession. Or it could default on its debts, which would be even worse, and unimaginably more harmful than a mere government shutdown. No one in Washington is that crazy, surely?

Step back from the edge


America enjoys the “exorbitant privilege” of printing the world’s reserve currency. Its government debt is considered a safe haven, which is why Uncle Sam can borrow so much, so cheaply. America will not lose these advantages overnight. But anything that undermines its creditworthiness—as the farce in Washington surely does—risks causing untold damage in the future. It is not just that America would have to pay more to borrow. The repercussions of an American default would be both global and unpredictable.

It would threaten financial markets. Since American Treasuries are very liquid and safe, they are widely used as collateral. They are more than 30% of the collateral that financial institutions such as investment banks use to borrow in the $2 trillion “tri-party repo” market, a source of overnight funding. A default could trigger demands by lenders for more or different collateral; that might cause a financial heart attack like the one prompted by the collapse of Lehman Brothers in 2008. In short, even if Obamacare were as bad as tea-party types say it is (see Lexington), it would still be reckless to use the debt ceiling as a bargaining chip to repeal it, as some Republicans suggest.

What can be done? In the short term, House Republicans need to get their priorities straight. They should pass a clean budget resolution without trying to refight old battles over Obamacare. They should also vote to raise the debt ceiling (or better yet, abolish it). If Obamacare really does turn out to be a flop and Republicans win the presidency and the Senate in 2016, they can repeal it through the normal legislative process.

In the longer term, America needs to tackle polarisation. The problem is especially acute in the House, because many states let politicians draw their own electoral maps. Unsurprisingly, they tend to draw ultra-safe districts for themselves. This means that a typical congressman has no fear of losing a general election but is terrified of a primary challenge. Many therefore pander to extremists on their own side rather than forging sensible centrist deals with the other. This is no way to run a country. Electoral reforms, such as letting independent commissions draw district boundaries, would not suddenly make America governable, but they would help. It is time for less cliff-hanging, and more common sense.
Keep in mind what we have to lose if all this goddamn nonsense ends with us no longer being the world's reserve currency. If Obamacare is doomed to fail, let it fail in 2016.

More importantly, recognize that the nutty, overblown attacks on Obama's very modest reforms are actually a problem.

I understand that listening to a bloviating moron ranting about how it's the End of America if Obama isn't stopped is more fun than listening to someone saying "well, I don't think this is a good idea, but it probably won't be a disaster," but be real, the latter is possibly true, the former is utter bullshit.

I didn't like most of what GWB did as president, but I never called for the democrats to shut down the state and stop paying our debts to stop him. We need to get back to reality before we really do make ourselves look too crazy to enjoy all the benefits we enjoy from having such a powerful, economically stable nation.
In my opinion, the root cause is excessive recent gerrymandering of voting districts. You end up with extremists getting voted in, doing extremist things, and their extremist constituents cheering them on.

Not very democratic, and definitely harmful to the country.
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(encouraged by a couple thumbs up here, I will continue my usual logorrea)

So ideally, Obamacare would have been properly debated before it passed. All sides would have given input, a compromise plan would have been reached (including reading the fracking thing before voting on it), and supposedly it would have been a better law once it passed.

And it would have enjoyed bipartisan support, instead of this "I'm taking my ball and going home" nonsense from the Tea Party.

As it was it reality, as I remember it the Democrats rammed it through, ignoring the Republicans, who actually only wanted to kill it rather than debate it.

As someone said, no way to run a country.
 
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rylfrazier wrote:

Keep in mind what we have to lose if all this goddamn nonsense ends with us no longer being the world's reserve currency. If Obamacare is doomed to fail, let it fail in 2016.

More importantly, recognize that the nutty, overblown attacks on Obama's very modest reforms are actually a problem.

I understand that listening to a bloviating moron ranting about how it's the End of America if Obama isn't stopped is more fun than listening to someone saying "well, I don't think this is a good idea, but it probably won't be a disaster," but be real, the latter is possibly true, the former is utter bullshit.

I didn't like most of what GWB did as president, but I never called for the democrats to shut down the state and stop paying our debts to stop him. We need to get back to reality before we really do make ourselves look too crazy to enjoy all the benefits we enjoy from having such a powerful, economically stable nation.
I can't agree enough on the bit about polarization. I really like some stuff I've seen on mathematically-drawn district lines, but because the very people who would vote in it's approval have positions with permanence reliant on it never coming to fruition, I don't know how it would ever become a reality.

On a similar note, the Electoral College needs to go, or at least be reformed. It's ridiculous that the entire election hinges on enough of the states to count on a blind carpenter's hands, and I like both idea proposing a straight popular vote as well as the idea of dividing up state electoral votes by the state's popular vote instead of all-or-nothing electoral votes.
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darkPrince010 wrote:
rylfrazier wrote:

Keep in mind what we have to lose if all this goddamn nonsense ends with us no longer being the world's reserve currency. If Obamacare is doomed to fail, let it fail in 2016.

More importantly, recognize that the nutty, overblown attacks on Obama's very modest reforms are actually a problem.

I understand that listening to a bloviating moron ranting about how it's the End of America if Obama isn't stopped is more fun than listening to someone saying "well, I don't think this is a good idea, but it probably won't be a disaster," but be real, the latter is possibly true, the former is utter bullshit.

I didn't like most of what GWB did as president, but I never called for the democrats to shut down the state and stop paying our debts to stop him. We need to get back to reality before we really do make ourselves look too crazy to enjoy all the benefits we enjoy from having such a powerful, economically stable nation.
I can't agree enough on the bit about polarization. I really like some stuff I've seen on mathematically-drawn district lines, but because the very people who would vote in it's approval have positions with permanence reliant on it never coming to fruition, I don't know how it would ever become a reality.

On a similar note, the Electoral College needs to go, or at least be reformed. It's ridiculous that the entire election hinges on enough of the states to count on a blind carpenter's hands, and I like both idea proposing a straight popular vote as well as the idea of dividing up state electoral votes by the state's popular vote instead of all-or-nothing electoral votes.
How will we roll back the gerrymandering? I guess it's up to the states to come to their senses, for the good of the country? Will they do this?

I wish I knew more about the theory behind the Electoral College. I presume there are reasons why it's been kept until now. Or is it just blinkeredness - an anachronism that no one has bothered to fix? It does seem like popular voting might be better, given our current messed up system.

The thing they always told me in school as that the Electoral College was the last bastion against a possible Hitler getting elected. Presumably even if the populace lost its collective head and voted in a Hitler, the electors would apply more cool reason and put in a more reasonable candidate. But what would the populace do at that point? Revolt and king the Hitler anyway, a imagine.

 
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darkPrince010 wrote:
I can't agree enough on the bit about polarization. I really like some stuff I've seen on mathematically-drawn district lines, but because the very people who would vote in it's approval have positions with permanence reliant on it never coming to fruition, I don't know how it would ever become a reality.
Wouldn't actually be that hard, really. First off, nobody votes on approval of redistricting. The states decide, independently, how to do that on their own.

The Census decides how many seats in Congress each state gets, and the state then decides how to draw up its Congressional districts in alignment with the number of seats they have to fill. Note that the House members that would gain/lose seats aren't involved in this process - typically, it's the state Governor who controls this.

So, theoretically, all that needs to happen is have the citizens of the nation sweepingly elect independent or third-party candidates to their state governorship (not THAT hard to do, all things considered - at least, compared to Federal changes) who can then re-draw district lines to their heart's content along more sensible lines than "most likely to favor the national party I'm a member of".
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R. Frazier
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I believe we're working on that in California. The big problem is that everyone's basically in favor of it other than basically all politicians.
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tesuji wrote:

How will we roll back the gerrymandering? I guess it's up to the states to come to their senses, for the good of the country? Will they do this?
God I hope so, but I believe to hope for the best, prepare for the worst. Unless we get a massive influx of non-entrenched senators at the same time* who are willing to make this kind of change, I don't know that it would ever happen. State-by-state might work, but I see a severe risk of having one generation of rep's work undone by the next, guided by the entrenched reps from other states.

*Surprisingly as I think about it, the Tea Party was actually in a surprisingly good position to do exactly this. Shame they had other priorities, otherwise they could have done a great deal of good.

EDIT: Ah, I was mistaken on who draws the district lines (I was under the impression it was the representatives themselves). Can the third-party governor redraw all the lines if there was no increase in seats, or is s/he only allowed to redraw in such a way as to add new districts?
Quote:

I wish I knew more about the theory behind the Electoral College. I presume there are reasons why it's been kept until now. Or is it just blinkeredness - an anachronism that no one has bothered to fix? It does seem like popular voting might be better, given our current messed up system.

The thing they always told me in school as that the Electoral College was the last bastion against a possible Hitler getting elected. Presumably even if the populace lost its collective head and voted in a Hitler, the electors would apply more cool reason and put in a more reasonable candidate. But what would the populace do at that point? Revolt and king the Hitler anyway, a imagine.
Nope.

From everything I've ever seen, heard, or read, it was basically a form of insurance for rich landowners from the whims of the unwashed masses. It was the assumption that the elector (Who tended to be a rich white man with rich white manly interests at heart) could override the populace if they so felt, with only a very rare few exceptions.

At the time of the drafting of the Constitution, it was a necessity as the tech required to tally the votes of thousands of people across the thirteen colonies was impossible in a timely fashion. Now, with the advent of the internet and electronic voting, it's really just a relic of a bygone age, and results in weird anomalies like Obama winning 51% of the popular vote but 61% of the electoral votes (Still glad he won, but even I can see that's an eyebrow-raising difference).

I've also seen interesting discussions about the idea of dissolving state lines, as a similar argument was made that they existed merely because of the bookkeeping convenience back in the horse-and-buggy days. It does bear some interesting points, especially when you look at the oddity of the vote of a person for Representative in Rhode Island has a much higher proportional weight than that of someone in California or Texas. A very valid counterpoint is that it helps make sure the interests of people in low-population states don't get trampled by those in high-density areas, but I still think it's a fascinating idea to consider.
 
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