Republicans Now Own the Economy

Posted on August 3, 2011 by Matt Osborne

It’s going to suck for a while. Corporate America is planning to lay off more people and call the savings “profit” because demand has diminished since the Recovery Act stimulus ended. As many as 1.4 million jobs are now threatened by reduced federal expenditures thanks to Republicans’ debt limit shenanigans, which might also include a rating downgrade for US public debt that would cost American taxpayers $100 billion a year. Without a doubt, Republicans claiming victory right now have insured economic consequences for us all: we’re on the cusp of the much-ballyhooed “double-dip recession.”

And Republicans are claiming victory, which means they will own every bit of the hardship. From here until Election Day 2012, unemployment and malaise are the consequences of voting for teapublicans. Both party and movement will wear this millstone around their necks as they sink. Of course, they will try to put it off on Obama; but the facts are the facts. This is what they wanted, and well may it profit them. Rachel Maddow’s “Boehner-is-bad-at-his-job” hypothesis actually holds true across the board, and it’s not because he’s a special Republican. It’s because the GOP had no real strategy for what to do after returning to power. They had a four-step plan:

  1. Make noise, stoke fear
  2. Win back the House
  3. ???????
  4. Victory!

It’s the same plan they have for dealing with the giant, hot potato they’re holding right now. In other words, they have no plan. The terms of negotiations this fall will favor the president: Republicans must come up with revenue on top of assuming the Bush tax cuts expire after 2012. The federal gas tax may have to go up, or excise taxes; but the specifics are less interesting than the fact Republicans will be forced to own a tax hike somewhere. If they don’t, Medicare providers (read: doctors who donate against the health care law) and the Defense Department (read: contractors) will take the hit, and neither of those is a win for the GOP.

Obama had a lose-lose situation last week. Now that the lose-lose situation belongs to Republicans, firebaggers are calling it “capitulation” when the deal could be more accurately compared to laying out rope that lets a man hang himself.

Adding: for a preview of what kind of pressure Republicans will face, check out Leon Panetta:

Defense Secretary Leon Panetta warned that hundreds of billions in proposed military budget cuts could cripple the fighting force, and vowed to work closely with Congress to avoid that outcome.

About Matt Osborne

Veteran blogging the culture wars from Alabama. Video journalist, mash-up artist, aspiring novelist, and metalhead. Expect bunnies, geekery, dark humor, and snarky empirical analysis to annoy idealists of all stripes. You can follow me on Twitter, but be ready 'cause it might get loud.
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  • http://ae911truth.info boloboffin

    Revenue will be an interesting needle to thread, though. The baseline from whic Extra Congress — sorry, the Joint Committee — is working assumes all the Bush tax cuts expire. Any tax reform package from the Joint Committee must match that level of revenue first before beginning to tackle the $1.2 trillion target.

    So revenues will have to come from something other than income tax reform. You mention a few — federal gas tax, excise taxes. But any such tax hikes are already prebranded Democratic. Democrats want to raise revenues, not Republicans. Republicans want to cut spending. We just spent three month reinforcing that brand identity.

    So own it or not, the Republicans will take the awful economy and say, “Democrats forced us to raise your taxes in this lousy economy!” And the electorate will believe them.

    I am not looking forward to the 2012 election.