Skip to comments.Mark Steyn's sober analysis of the debt crisis, and whether the GOP even understand it.
Posted on 03/04/2011 2:03:09 AM PST by Rummyfan
HH: I begin this hour with Columnist To the World, Mark Steyn. You can read all of Marks work at www.steynonline.com. I find him tonight in Canada. Hello, Mark, and good evening to you.
MS: No, no. Im actually in Michigan, which actually isnt in Canada, although in fact judging from what I got into trouble for saying about Detroit, it wouldnt even rise to the standard of Canada. Im in the state of Michigan.
HH: Well, Im glad to hear youre in the Wolverine state. Watch out for rappers driving big, black cars around. This is how we roll. Mark Steyn, I began this week to really hammer Republicans in the House, because they are moving so slow and they lack a message. So Im going to test my concern against yours. Do you think the House Republicans are blowing it?
MS: Yeah. I think November seems a long way away. And I think theyre missing the big lesson of the last two years, which is that the Tea Party, and a broader swathe of the American public who are concerned about, particularly about American spending and the debt crisis, agreed in the last electoral cycle to work within the confines of the Republican Party they had very little regard for. The Republican leadership needed to get that message, because its not going to be good for this Republican party if they say okay, we forgave you for 2006, we forgave you for that, and we gave you a second chance, and now youve burned the second chance.
HH: Now the Wall Street Journal today put out one of these classic polls that begins to show the turning of the MSM tide against budget cutting, saying that less than a quarter of Americans support making significant cuts to Social Security or Medicare. This is one of those manufactured polls, Mark. Theyre going to try and persuade the House GOP and other budget cutters that there really isnt support in the country for cutting budgets.
MS: Well, and it doesnt make any difference. I mean, polls show that more American males would rather date Ann Hathaway than Helen Thomas. But it doesnt mean its going to happen. And in this case, the polls can say what they like. But the fact is, these entitlements are unsustainable. So Americans can tell pollsters that theyre quite happy with 1930s entitlement provisions for Social Security, but it aint going to be there. And the longer it takes you to figure that out, the more likely it is that this country will simply slide off a cliff. And I mean that not entirely literally, but I mean that we will reduce vast swathes of the United States to a third world landscape. This country is broke. Dont go from being broke to being bankrupt. This isnt anything to do with mid-century projections. This is happening now. Weve got maybe a couple of years to turn this around before the world abandons the dollar as the reserve currency.
HH: Now that I believe, and I believe that a lot of Americans, at least a majority of people who voted for Republicans believe that. But what I dont see is that sense of urgency reflected in John Boehner, Eric Cantor and Kevin McCarthys engagement with the media. Have I missed it? Have you seen it, Mark Steyn?
MS: No, no. I dont think so at all. I think theyre toying with symbolic gestures. This House vote on the 1099 provision, where 1099 is one of these tedious bits of government paperwork that the Congress thought it could actually increase the burden that this tedious paperwork imposes on small businesses. But these are, in the end, mainly symbolic gestures. Cutting $4 billion dollars when youve got a budget thats crashing up against $4 trillion dollars is just not going to cut it. And thats, as you say, thats whats missing, the sense of urgency. Theres a kind of complacency about this, as if the canoes just sort of drifting toward the falls, but weve still got plenty of time to paddle for shore in a couple of decades.
HH: Well, I had Sean Spicer as the new RNC communications director on yesterday, and look up, and Im talking to Sean Spicer, and I see Eric Cantor chattering away with Wolf Blitzer. And I asked him, who does Eric think hes talking to? And I wonder, Mark Steyn, none of the House leadership went to the Tea Party Patriots summit, not one of them.
HH: And it makes me think theyre in a cocoon inside of the Beltway.
MS: Yeah, and I think the cocoon, actually, isnt up to speed on this, because I think if you listen to the way the conversation in the Beltway is going, theyre saying well, yes, perhaps we do need a spending cut here and a spending cut there, cutting the Great Lakes Restoration initiative, or whatever the Presidents big idea is. But we also need to increase revenue by putting up taxes. Theres no, all the evidence shows you cant get revenue up beyond about 19% of GDP. So if youre spending 25% of GDP on government spending, you cant increase that with revenue. And thats the problem when John Boehner and the Republican leadership just talks to Wolf Blitzer and the New York Times and all the rest of it. Theyre not actually even asking the right questions. And I think this will, I think that this is very dangerous as we go into the 2012 cycle, that the Republican leadership is already demonstrating how far out of touch it is.
HH: I agree with that. Now why is it that a Scott Walker, and especially in Ohio, nobody notices this, but yesterday, the Ohio State Senate passed a deeply important bill about reducing collective bargaining rights, far more significant than whats happened in Wisconsin, because its guaranteed now of passing. What do Kasich and Walker know that the Beltway Republicans dont?
MS: Well, I think because generally speaking, the closer government is to the people, the more real it is if things are working well. So theres more chance of fixing some of these problems at state and country and municipal level. I think one of the problems with the government of the United States is that they, over the last few decades, is theres been this colossal expansion of national government, national legislation, national agencies, national regulations. When youre seen in Washington, you must feel like a kind of emperor. Youre sitting there everything has, you know, zeroes upon zeroes stuck at the end of it, youre legislating for 350 million people, and I think too many of these guys think its sort of still 1950, and American is the last superpower standing, and it will always be that way. And thats whats so depressing about Washington. Washington is like entering a time warp. It has no idea of the severity of the crisis, and how the world is already beginning to move on to the post-American era.
HH: Did you chance to read or hear Donald Trump on with Rush talking about the challenge from the Chinese yesterday or the day before, Mark Steyn?
MS: Yeah, I love the way every time he slammed a different nation state, whether it was the Chinese or the South Koreans, he said Ive worked with these guys, I sold them some unwanted apartment development for $300 million dollars or whatever. And theyre lovely guys, but theyre, I dont blame them for what theyre doing, for taking advantage of us. And I thought in that sense, actually, he has the kind of making, in a crude way, of some sort of political message there.
HH: Well, it was the echo of John Connally in 1980, saying to the Japanese you can park your cars on the dock, and we are not going to import them. Thats not the way to deal with this, though. I kind of think of him as the Aaron Burr of 2012. But the fact that Trump is out there and resonating, and Rush likes to hear it and it sounds good tells me that what hes filling is a vacuum for blunt talk that the D.C. Republicans, the Beltway GOP, just doesnt understand is everything in this cycle.
MS: Yeah, but just to go back to what he was saying, I mean, he did say, and my understanding of what he was saying is that he didnt blame the Chinese and the South Koreans, and everyone else, for taking advantage of us.
HH: No, he didnt. Thats right.
MS: I mean, basically, we cant blame the Chinese. What theyre doing, but Beijings point of view, is highly rational. What the rest of the world is doing, from the rest of the worlds point of view, this is suicide. Theres no point looking for scapegoats. This is national suicide on a scale that no nation in history has contemplated.
HH: Mark Steyn, last question, do does anyone inside the Beltway stand up and say to you, when you hear them talk, I understand what you just said, is it Paul Ryan, is it anybody, Tom Coburn, communicates to you effectively that they understand this?
MS: Yeah, I think the other day, I saw a couple of freshmen Congressmen who were elected in November, who certainly do understand it, and were specifically elected on a platform to address these issues. But the somnolent party leadership in Washington has basically just climbed back into the Bob Dole suits, and the whole idea is theres no urgency, theres no crisis. Okay, the numbers dont look great for 2030 or 2040, but lets not rush into anything. And that just aint going to cut it.
HH: Are you disappointed Mitch Daniels is not going to run, and John Thune have gotten out?
MS: Well, I think theyre, I think they have seen that actually, the House GOP is perhaps creating the circumstances in which Obama will be able to secure some kind of reelection. And I think a lot of these guys have just figured out that the way things are going, from their point of view, theyd rather wait for 2016. The question is whether America can wait until 2016.
HH: Mark Steyn of www.steynonline.com, thank you, Mark.
Steyn is being very generous when he says we have 2 years as the world’s currency reserve. It might take that long to implement it, but the decision to TRY has already been made by various players in the game.
I think he’s right, that the GOP leadership doesn’t “get it”. Sadly, the media seems immune to grasping the problem as well, which is amazing, because they would be some of the first to scream bloody murder at losing their wealth.
Various people here have said that GOP needs time to cut the budget. From what they’ve been saying and doing, I don’t think time is the issue. They don’t get it. They won’t really try. I don’t see a happy ending here.
I suppose he would rather our elected officials just pull a Wisconsin. Throw up their hands, flee the capitol, and run around their districts with vulgar disgusting signs.
I’m beginning to wonder if we’ll soon have military coups in Western Democracies, in order to simply survive.
Steyn puts it in a nutshell for us.
You are absolutely right. There are plenty of faithful Republicans on this site who will defend what Republican leadership is doind in D.C. There is no sense of urgency among them. They are so proud of cutting $60 billion dollars, while the deficit is $1.6 trillion for the year.
Perhaps the majority of Americans won't be happy with drastic budget cuts. And perhaps the cuts wouldn't get past the Senate, or past Obama's veto. But if you don't try, you won't have any excuse when the whole house of cards collapses. And the collapse is imminent. The only ones who will be able to hold their head up high will be those who called for drastic cuts, no matter how unpopular those cuts were.
I think we’re the ones who don’t get it. The politicians know we’re screwed.
I would support that. Shut down the government for real. Not just a temporary shutdown due to lack of funding. Board up the windows and doors. Throw a going out of business sale and call it a day.
I will be amazed if the USD is still the currency reserve by December of this year.
Sometime between the end of June and the end of December, reserve currency status will be de-facto ended. The USD will then devalue by 80%.
Yes, 80%! This is because the debt-per-taxpayer on the current debt comes to about 24,000 a year. The highest conceivable level of personal taxation that can go into repaying that is ~ 10%, so the average wage must rise to 240,000 a year. Which is a ~ five fold increase from todays average wage of 45000 USD.
Do not be in (USD) cash after June 30th. If you are then at some point you will be wiped out.
Perhaps a little perspective is needed:
A million seconds is 12 days.
A billion seconds is 31 years.
A trillion seconds is 31,688 years.
So GOP, tell me again what BIG deal 60 Billion is.
No longer having the worlds reserve currency is a big deal but not that big a deal. No longer having the worlds reserve currency with a debt to GDP ratio greater than 100% is a very big deal, we’re-going-to-have-to-let-grandma-die level of big deal. I give that three to six years.
Even the freshmen think balancing the budget in 7 years is good enough. They are wrong. There will be some sort of crisis in the next seven years and that will sink us unless we have the discipline to live within our means now. Note that the time from the 1994 to 2001 was seven years.
Note that a lot of our US Debt bonds are short term bonds. We got a better interest rate that way. As they roll over, our debt will climb way higher.
Fine, shut down the government but don’t expect the leftists to sign onto our budget demands. Not going to happen.
You don't follow my meaning. I'm not saying shut it down as a temporary tactic. I'm saying SHUT IT DOWN---permanently.
You have an effective turn of phrase, LOL.
For the thread: I fix upon June 30th because that is when QE2 is slated to end: the markets have already priced in QE2 ending on that date.
Only it will not end. The US will not have sold assets nor meaningfully addressed its spending by that date - because Obama is still President. Therefore QE2 MUST carry on under some guise or other.
Nobody will buy treasury bills under a QE_infinity regime, and the interest rate cannot be significantly increased without geometrically increasing debt service payments. So the current high (70%) takeup of bills by the Fed will move towards 100%.
Once QE_infinity begins: Foreign Governments will look for ways to distance themselves from use of USD as a reserve - not because they hate America, but out of simple self-preservation.
The timing of how quickly that happens is pretty much a guess. I think it will happen between June and December. Others give it a year or so. But for all we know the currency will begin to de-reserve and de-value on the 4th July.