Although the debt ceiling fight isn’t over yet, it is now clear it won’t be the excuse President Obama wanted to justify quickly jamming through an austerity grand bargain. As much as Obama desperately tried to use this artificial crisis to justify cutting Social Security and Medicare in a secret deal, that opportunity slipped through his fingers.
Just because our most popular social safety net programs escaped this current round of shock doctrine doesn’t mean the basic formula won’t be recycled in the near future to justify cutting these programs.
It appears that the pieces are already being set up for the next round of forced austerity via fake crisis. This next time, instead of the debt ceiling it will be a possible bond rating change that our political leaders will point to as the “crisis” that “forces” them to vote against the clear will of the electorate.
The pieces are such: The rating agencies are laying out the narrative that we are on the verge of a downgrade. You have the bond rating agencies, mainly Standard and Poor’s, getting shockingly involved in the political process. S&P is basically threatening downgrade unless certain politicians get their way. Most perplexing, they are actively picking and choosing between two remarkably similar proposals that would both reduce the deficit and raise the debt ceiling. They are establishing a very heavy handed pattern.
In addition, both Speaker John Boehner’s and Senate Majority Leader Harry Reid’s debt ceiling increase contain some form of the Catfood Commission II that will report in six months. It is a super committee whose recommendations will be a fast tracked through Congress, getting an up or down vote. Since it is in both plans, it is more than likely that any agreement will contain some form of the Catfood Commission II.
From there it is easy to see how the next “crisis” could easily play out.
Right before or after the Catfood Commission II issues its report, the rating agencies will make the boldly political threat that failing to pass this specific package will negatively impact our bond ratings. They might not say it that directly, but it will be the inherent reality. Since the Catfood Commission II deal can’t be amended or filibustered, it will be the only game in town. The rating agencies only have to say a package must pass soon to effectively mean this package must pass now.
Avoiding that “crisis” will become the common bludgeon used to get members of Congress to vote for a backroom deal that was subject to neither public debate nor the regular legislative process. You will have members using excuses like, “I didn’t like this deal, but I wouldn’t risk our bond rating.”
As a result, Congress will be able take actions the electorate doesn’t want, but with the “crisis” and its bipartisan nature giving them the cover they need to subvert basic political accountability.




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As always, Jon, i am humbled by your insight. Of course, S and P’s insane babbling about a US credit downgrade makes perfect shock doctrine sense. They wouldn’t have the balls to pull this stunt off if someone didn’t already give them the green light. The fact that they’re asking for 4 trillion in 90 days means it can’t be tied to the Bush tax cuts – which will never go away.
The only question is: Who gave S and P the green light? Obama or Geithner?
well I think this shows the british never really left, and they have been controlling the US from their City of London, Banking HQ offices for a very long time
I think there is a budget fight coming up as well that will give Obama and Republicans another chance to screw us.
The CRAs should be decodified… and put on trial.
This explains why ‘Bammie didn’t touch these ratings agencies with DOJ investigations and prosecutions when it was clear they were in cahoots with the banks to rate their mortgage backes CDS and other worthless junk very highly. You would think after fraud like that they would get something, the jaundiced eye at least. Well, I guess when you work for the same MOTU’s you really can’t call them out. Way to go ‘Bammie!
“…it is more than likely that any agreement will contain some form of the Catfood Commission II.”
Is there some way we can work in a few acts of disobediance, a couple million-person marches, and an election between here and there?
And maybe a new candidate on the dem side just to make it fare…
Doesn’t that assume the “boss” doesn’t know what his “underling” is doing?
I can’t think of a reason to vote for the folks who have betrayed you. I mean if it’s the teaparty vs. the guy who is going to sell you out to the teaparty, the tea party should win on points for competence and integrity.
The change we’ve all been waiting for, Obama, was not a Democratic President using an “artificial crisis to justify cutting Social Security and Medicare in a secret deal.”
If ya didn’t get this from The Pen:
At least make your Voice/Fax heard.. My family and I have already sent their faxes will you?? It is real easy to use… Even a Caveman could do it!!!
nahant
It’ll be different this time. The first catfood commission recommended that grandma be forced to eat catfood. The second will recommend that grandma be made into catfood. We should really call it the Soylent Green commission. If we’re going to cut the money we squander on the nonrich, the only rational solution is to shorten lifespans; and if you’re going to do that, it would be a shame to waste a potential nutrient, which even if it may be a tad low in proteins, fats, and calcium, could certainly be used to fatten hogs.
that is assuming you think O is the boss. timmy like O get their orders from above and timmy is a full and paid up member of the central banking cartel
We have seen this pattern so many times now whether it involves wars or the financial institutions, that you would think people would recognize the pattern. It’s the usual scare tactics of “CRISIS” to take away civil liberties, public assets, and any semblance of “democracy”.
Good to see you are thinking about this. We need some solution for those non productive people and the old ones. Next we will work on the worthless people who aren’t working.
yes, lather, rinse, repeat.
Please go read this related diary!
CALL TO ACTION: No Super Congress!
Only if we know which one is the other’s boss…
Frankly, I think they’re both in on it. I’m just curious who actually picked up the phone and gave the order. It’s my inner Arthur Schlessinger who’s actually curious… hazard of being a history geek.
I’m not good a link and tag research but does anybody have a link to articles from last Dec when Jane and/or David predicted the debt limit hostage ploy that’s going on now. I’m sure I saw articles of that type. They’d make a handy companion to this piece by Jon predicting how the next phony crisis will be staged.
Exactly, this is becoming the standard play now. Fall of 2008 was just the first time they tried something so big and blatant because they were not sure how well Obama or McCain was going to play ball.Remember all the supposed suspension of electioneering due to the financial crisis Now they know the true value of what they bought in Obama thus the S&P is backing his plan.
Now the oligarch know that they can do this every-time and not be called on it by actual law enforcement. Who is going to stop them, the corporate suits in the SEC?
As Krugman pointed out in his recent blog entry, who sends Poor Standards, I mean Standard Poors their income ? you guessed it, Wall street banks and investment houses. So the new big player in the Shocking of America, is a 100% funded by Wall Street group of clowns who rated trashy sub prime bonds with AAA ratings so their buddies at the banks could sell them to school districts in Iowa and small towns in Europe. With that track record Poor Standards has street cred in the great looting of America ongoing crime wave. Also in Krugman’s column, he calls Obama a “conservative moderate Republican.” Finally, someone in the national media identifies the political hoax of the century, I call it Obama’s Great Deception
Obama didn’t get his Grand Bargain. We won, people. Sure it’s only the battle not the war and they’ll try something else, but we made the difference here. All the folk who called and wrote and faxed right across the spectrum – loved that bit about the fax machines running out of paper – yay! Now that’s protest for you.
I hope and believe that it’s not going to change except to go more widespread if any of these Super Commissions start fiddling with social programs now. See, it’s like a bees nest, gonna keep on humming right up to election time.
Don’t touch Social Security except to improve and expand it. We won’t stand for it.
Nice piece.
“Although the debt ceiling fight isn’t over yet, it is now clear it won’t be the excuse President Obama wanted to justify quickly jamming through an austerity grand bargain. As much as Obama desperately tried to use this artificial crisis to justify cutting Social Security and Medicare in a secret deal, that opportunity slipped through his fingers.”
I won’t celebrate til I see what actually happens. There’s a good 6 days till then. It is possible that your conjecture that this sets up Catfood, which will then be used to gut SS, is possible.
But I personally think letting our guards now is a mistake. I think they will try and do anything. And 6 days? Oh ya, plenty of time to “reform” SS.
Suppose they downgraded U.S. debt. Then, the effective interest investors would demand for U.S. government debt would increase.
If the interest gets too large, the obvious solution is to stop borrowing to fund congressional appropriations (rights to draw funds from the Treasury). We have a fiat currency, each appropriation could be self-funding, i.e., we could pass a law that each appropriation must contain a directive to the Fed to credit the Treasury’s account by the corresponding amount.
But Title 31, Section 5112, Item (k) already gives the Secretary of the Treasury authority to mint large denomination platinum coins (say a trillion dollars each) and deposit them into the Treasury’s account at the Fed. And, all government expenses get paid from that account.
I dearly wish you and others would come to grips with the reality that this is NEVER EVER going to happen.
You and others can play it up, bemoan reality and wish it were so and be smug you have an answer, but it’s not REAL!
They will never do this . . . . it’s legal, sure, it’s there, sure.
BUT IT WILL NEVER BE DONE!
Can you find us a way to beat these fucks that’s real?
Please? Me n millions of others are begging for some solutions that are DOABLE!
I’d suggest first of all, major rabble rousing on street corners. We could sell oranges and pencils while we’re at it . . .
Barry was sent in to gut SSI , Medicare and the rest and make sure the wealthy got more and more tax cuts. I won’t be surprised when he backs a flat tax or the Nat’l sales or VAT the GOP is asking for.
and then Ryan said to Bill “we’ve got to get this moving”, and Bill said “Call me”, and then…
If the raising of the debt ceiling gets defeated and the interest rates skyrocket, they won’t have other options.
Yes, I remember that. WTF was a democratic ex-president doing at a Pete Peterson Fiscal-Responsibility clambake?
Oh, yes, we’re talking about a founder of the DLC. Hmmmmm.
Since Ted died its been Bills party. FDR and the Kennedys came from big money. Bill and Barack from very modest backgrounds. The rich guys used government to help common folk and protect them from the ruling class they knew so well. The poor guys got into the upper echelon and promptly started screwing their previous peers.
Its just one party with two heads… the DLC was the Republican takeover.
It’s the other way around, Wall Street via S&P gives the orders to Obama and Congress. They are just puppets.
americanselect.org check it out. We need another party, a progressive party. What we have now are two Republican parties and it seems to me the Democrats have gone so far to the right that they are the greater danger, although they are both horrendous. Look at how well the Tea Party has done, we can do the same thing but not via the Democratic party. I was listening to Denis Kuchinch last night on the Ed Show and thinking, Yes Denis, I agree with everything you are saying but here’s the problem, in the end you will vote to cut our entitlements just like you voted for the health insurance profitability bill saying you had to go along with your party or get shut out. So what good are you? Who needs a person who sees what is right and votes for what’s wrong to stay in office?