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The Debt Ceiling is all about PR gone mad

One of the things with PR is that like with anything in life you can take it too far. You can become to myopic, focusing too much on micro-publics and neglecting that those publics are surrounded by other publics, which while they may not be core to you can become a voice that influences the publics you do care about.

I know, that sounded a bit complicated. In english, basically your primary audience might be Bill, and Sally might not matter to you in the least. So you focus on Bill, ignoring any impacts your actions and words might have on Sally, because after all, who cares about Sally right? The problem however, is that if you piss Sally off enough, she starts fighting back and that starts to change the way Bill views what you are saying.

This is what is happening with the debt ceiling fiasco in the US. Everyone started out by focusing on their core publics. So Tea-Party Republicans took the 'do not raise the debt ceiling' stance, moderate Republicans said 'raise it, but no new taxes', moderate Democrats said "raise it, give us new taxes, but we'll give you spending cuts', and liberal Democrats said 'Raise it, tax the rich and no spending cuts."

So there are the four basic positions floating around out there. Each one of those positions is 100 per cent a function of PR.

The debt ceiling is an issue unto itself. It is not, I repeat, NOT interwoven with all these other issues of taxes and spending. Yet, everyone is using it as an opportunity to take an ideological stance and dig their heels in.

The debt ceiling is nothing more than the equivalent of your credit card company raising the limit on your credit card from $10,000 to $12,500. Of course it's not good that you need a higher credit card limit so that you can pay off your other credit cards that are maxed out, but the increased limit itself isn't the problem, the debt is the problem (and raising or lowering the credit card limit doesn't change that).

I have credit cards that keep increasing my limit every year even though I never come close to my limit and always pay my cards off in full every month. So raising my 'debt ceiling' is irrelevant, just because my debt ceiling is higher doesn't mean I'm actually going to go out and put myself in that level of debt.

So the ceiling and the debt are too separate issues, yet they have become fused for political purposes.

Which is why all of this is nothing more than political theatre, fueled by PR campaigns. They could easily raise the debt ceiling and then figure out how to get the debt down afterwards. The only reason they are trying to do both at once is because Republicans (rightly or wrongly) see this as an opportunity to push for smaller government (which you obviously must have if you cut 3-4 trillion out of the budget).

But the actually thing causing panic in the market is that they won't actually raise the debt ceiling. Now, of course they will, but they can't come right out and say that because then they would have no leverage to push for the thing they really care... how to balance the budget in the future. And Obama is no saint in this, he got out there early and started dropping phrases like he can't guarantee peopel will get their social security cheques and that the military might not get paid (I mean, that's just over the top scare tactics).

So basically what you get is a group of politicians scaring the crap out of the American population AND investors. The damage it causes is real. The markets have tanked over three per cent this week for absolutely no reason. In fact, quarterly earnings were good, so the market should have gone up (but it went down instead).

Three per cent might not sound like much, but someone who is retired and has a million bucks invested in stocks would have found themselves $30,000 poorer this week for absolutely no reason other than politicians are using the nations debt issues to play politics.

This political fighting is also the reason (I think) a lot of businesses have been hording cash. The politicians (and yes, I blame Obama for at least 50 per cent of this) have failed to come up with a plan to deal with America's debt long term. Printing money and stimulus spending (while necessary in the short term) is not in itself a plan - it's more like a hail mary - and if it doen't work it destroys the dollar and leaves America in ruins through hyper inflation.

But the problem is that no one can actually approach the situation from a common sense perspective because they are all too busy acting out their PR plans. They have to stick to their talking points and positions that their base elected them for.

The issue they will face shortly though is that while Bill and Sally may be in different camps, if you throw them both in to poverty, you'll find that they start to find common ground. At which point, your talking points won't mean much.

This is the path the US is heading towards. This game of russian roullette is going to ultimately leave a lot of dead bodies at the table (metaphorically speaking). Because just about everyone in Washington is focused on PR and not on what needs to actually get done.

Now, this is normal for politics, and there's nothing all that wrong with it normally. But when it gets this out of control and hyper partisan, to the extent that markets are hurt for absolutely no reason and the business of the people (unemployment, commodity costs, etc.) is completely ignored, then you've entered the land of insanity.

And insanity is bad PR.

Sanity would be raising the debt ceiling THEN having this big ideological fight over how to get the debt down. Insanity is hurting your own country for no reason just because you want to prove a point.

I like a lot of folks from all over the spectrum. I'm a fan of Michael Moore, but I'm also a fan of Ron Paul. To me, while they are on opposite ends of the spectrum, they each seem to want to reach the same end goal. Just that one believes government is the solution and the other believes government in inept and should just get out of the way (big gov versus small gov).

But you can have compromise. I think Michael Moore and Ron Paul, negotiating at a table, would find it quite easy to find common ground because both would understand that burning down the house was not an option. That you're better off getting half of what you want than nothing at all.

And because they both had the same end goal in mind - ie. a better standard of living for Americans - they would be able to compromise and explain to their constituents why such compromise in the long run was the best case scenario.

This is why this current debt ceiling crisis is nothing more than PR gone mad. People are not appealing to the overall good of the country, but rather simply to their electoral base. The house is on fire and they are sitting across the table from each other, each saying to other "You really should get up and call the fire department. But if you get up, just so we are clear, then I win."  So instead, they just sit there as the house comes crumbling down around them.

And it's all for the sake of PR... an opportunity for them to reinforce with their core publics that they are who they said they were, whether they be for small gov or big gov.

At the end of the day, this simply goes to show that we have learned nothing over the past 10 years. That 9/11, the Iraq war and the mini-depression (fine, recession) have changed nothing in Washington.

And so the drama will continue far beyond this (manufactured) debt ceiling crisis. We'll be stuck in this PR madness for the next year until the next presidential election.

Essentially these politicians are going to continue to stare each other down while the house burns. What many of them are failing to consider is the possibility that their publics might shift out from underneath them in the mean time. And such a shift might happen not just under Bill, but under Sally also. We saw that happen to the Liberal party in the last election... the looked down to find that the earth they were standing on had completely disappeared, leaving them shocked and stunned at how their core publics simply abandoned them in the blink of an eye.

The ultimate consensus in the 2012 election may end up being 'Throw them all out of office'.

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