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Obama Faced With Sheer Insanity in Debt Talks

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Here's the key passage from Obama's speech last night - the defining argument that separates the reasonable from the insane:

Defaulting on our obligations is a reckless and irresponsible outcome to this debate. And Republican leaders say that they agree we must avoid default. But the new approach that Speaker Boehner unveiled today, which would temporarily extend the debt ceiling in exchange for spending cuts, would force us to once again face the threat of default just six months from now. In other words, it doesn't solve the problem.

First of all, a six-month extension of the debt ceiling might not be enough to avoid a credit downgrade and the higher interest rates that all Americans would have to pay as a result. We know what we have to do to reduce our deficits; there's no point in putting the economy at risk by kicking the can further down the road.

But there's an even greater danger to this approach. Based on what we've seen these past few weeks, we know what to expect six months from now. The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach. Again, they will refuse to ask the wealthiest Americans to give up their tax cuts or deductions.Again, they will demand harsh cuts to programs like Medicare. And once again, the economy will be held captive unless they get their way.

Reasonable, rational and above all, right. John Boehner, on the other hand, had the following to offer the American people:

What we told the president in January was this: the American people will not accept an increase in the debt limit without significant spending cuts and reforms.

And over the last six months, we've done our best to convince the president to partner with us to do something dramatic to change the fiscal trajectory of our country. . .something that will boost confidence in our economy, renew a measure of faith in our government, and help small businesses get back on track.

Last week, the House passed such a plan, and with bipartisan support.It's called the 'Cut, Cap, and Balance' Act. It CUTS and CAPS government spending and paves the way for a Balanced Budget Amendment to the Constitution, which we believe is the best way to stop Washington from spending money it doesn't have. Before we even passed the bill in the House, the President said he would veto it.

I think it's worth repeating here that Boehner's arguments cannot and must not be taken seriously. For someone who remained mute during the absurd spending binge through the Bush years, his moral posturing on debt is simply laughable. Boehner doesn't understand economics, doesn't understand the meaning of fiscal responsibility, and has no place whatsoever telling the President how to run the country.

Boehner would be better suited to dressing up as a clown and doing 5 year old birthday parties than leading fiscal reform in Washington. I know this must sound hyperbolic, but I refuse to engage in the 'two sides of the argument' analysis that respects opinion on both sides. The Republican plan for raising the debt ceiling and balancing the budget is a joke - something so utterly silly no serious economist entertains it.

I don't want to rehash the argument again here, but we know that it is impossible to cut your way out of a fiscal crisis of the magnitude recently suffered by the US. The Republican's insistence that we must dismantle the federal goverment in order to cut costs and get the economy going again is literally mad.

Chez Pazienza sums up my thoughts in a way I only wish I could write:

There's no arguing with the fact that what we all just witnessed outlined in pretty clear terms the dynamic that's been going on in Washington for the past several months in regard to the debt ceiling fight. Obama was not only reasonable, measured and -- I can't believe I even have to say this -- mature, but he made it clear that he was a man so willing to compromise for the good of the country that he's consistently fending off fire from many in his own party who feel like he's somehow selling them out. Boehner, meanwhile, was a petulant, haughty adolescent, someone not the least bit interested in genuine compromise and who's more than willing to forgo honest dialog in the name of cheap theatrics, bad jokes and brutish partisan intransigence because he knows it's what his party demands at this point.

There is a huge amount at stake here, and it looks like the Republicans are serious about burning the country to the ground in order to get what they want. I don't know what Obama is supposed to do here - he genuinely seems to be trying to engage with the Republicans and give concessions he knows his own party will hate. However, there must be a line that he cannot cross, and unfortunately that might just take down his Presidency.

Image by Getty Images via @daylife