Rep. Joe Walsh Defends Not Paying $117,000 In Child Support: ‘This Is Where Real America Is’ By Marie Diamond on Jul 28, 2011 at 12:00 pm

Last night the Chicago Sun-Times broke the story that Tea Party freshman Rep. Joe Walsh (R-IL), who has spent months lecturing President Obama and Democrats on fiscal responsibility, owes $117,437 in child support to his ex-wife and three children. Laura Walsh has asked a judge to suspend his driver’s license until he pays his child support. Despite loaning his own campaign $35,000— and paying himself back at least $14,200 for the loans— Walsh claims he failed to make the payments because he “had no money.”

The tax-bashing congressman campaigned on a pledge to reject the Washington “status quo” and has bragged about his own frugality, claiming he even sleeps in his congressional office to save money. Walsh, who’s been described as “the biggest media hound in the freshman class,” has been a prominent voice in the debt ceiling showdown in recent weeks, making television appearances almost every day to denounce President Obama’s “reckless spending,” which he says has “bankrupted this country.”

“I won’t place one more dollar of debt upon the backs of my kids and grandkids unless we structurally reform the way this town spends money!” Walsh says in one video. But today, when confronted in a CNN interview about his failure to support his own children, Walsh not only refused to acknowledge his hypocrisy but insisted that being a deadbeat dad meant he understood the plight of average Americans:

I know that story just broke, and it’s interesting that it just broke right now as I’m out there trying my best to fight this President and fight the Democrats and solve this debt crisis. But look, I’m the most openly vetted candidate in the world. I have had financial troubles and I talked about them throughout the campaign. This is where real America is.

This is not the first time Walsh has faced scrutiny for the disconnect between his rhetoric and the way he conducts his personal life. In 2009, Walsh lost a condo to foreclosure because he owed more than $300,000 on the property. In April 2010, an investigation revealed that Walshfailed to file his personal financial disclosure form as required by federal election law. When questions about his personal finances dogged his congressional campaign, Walsh once again claimed he wasn’t a rich man, despite managing to pay $3,300 per month for a house in upscale Winnetka.

Walsh also rejected the congressional health insurance plan for his family on principle, much to the chagrin of his current wife, Helene, who had a preexisting condition and needed surgery while the couple was uninsured. (Walsh’s Wikipedia page excludes his first marriage.) But Walsh apparently thinks he can have it both ways — claiming his own indebtedness and failure to care for his family’s needs allows him to understand average Americans, while railing against Washington for irresponsibly racking up deficits. As he put it in a recent interview, “Thank God congressmen like me are here!”

The Atlantic

GOP Base: Spending Cuts Now, or Never

JUL 5 2011, 2:21 PM ET226

One thing that I hear over and over from my conservative interlocutors on the budget is that they need spending cuts right now because they just don't trust the Democrats (or indeed the Republicans) to make spending cuts in the future. If they don't get the cuts now, the reasoning goes, it will be "jam yesterday, and jam tomorrow, but never jam today."

I certainly understand the worry, especially after Democrats and their own leadership pulled the cute trick of enacting a bunch of sham spending cuts in the last round of negotiations. But here's the question: why do you think spending cuts now will be any more likely to stick than spending cuts tomorrow? Anything you enact now, under threat of the debt ceiling, can always be un-enacted tomorrow.

Oh, sure, default would make it pretty hard to borrow money to fund new spending. But what makes you think they won't raise taxes to fund new spending instead? You cannot credibly bind future congresses to your will. If people want Medicare more than they fear tax hikes, they'll get Medicare, and tax hikes. And that is true whether or not you default. Eventually, we will close the budget deficit one way or another. Default does not make it any more likely that you will get your way on government spending. Indeed, it makes it somewhat less likely, because--however justified the tea party may feel--for the swing voters in the center, the proponents of smaller government will now look like The Party of Crazy.

Institutions are important, but in a democracy, there are no institutional shortcuts to credibility. I wrote this years ago about the gold standard:

The lone advantage of a gold standard--and it is a real advantage--is that it prevents governments from inflating the currency. The problem is, this is only moderately true. The government, after all, can always modify its gold standard. Yes, you say, but it will pay a price in the markets, and this is true, but this is the same price it pays when it prints more fiat currency. Such practices do not go unnoticed for long.

As James Hamilton has pointed out, gold-backed currencies, like all money with a fixed exchange rate, are subject to speculative attacks whenever the government's financial position looks weak. Such speculative attacks often require punitive economic measures to fight off, which is one of the reasons that America suffered so nastily from the Great Depression--it raised interest rates in the middle of a recession in order to defend the credibility of its currency.

. . . In short, you don't get anything out of a gold standard that you didn't bring with you. If your government is a credible steward of the money supply, you don't need it; and if it isn't, it won't be able to stay on it long anyway. (See Argentina's dollar peg).

This is also true of the current standoff. You cannot get anything out of a default that you didn't put into it. Don't have the national political consensus to cut Medicare/Medicaid/Social Security? Won't have it after we default, either. Don't trust future governments not to increase spending? Default won't stop them from, say, raiding your 401(k), the way Argentina did with its private pension funds.

Of course, maybe tying the joy of spending to the pain of taxes will make spending harder. But forgive me if I point out that the advocates of this position seem to want to have it both ways; they favor tax cuts because it will "starve the beast", and then they favor default because apparently deficits make spending too damn painless. You can support one of these, or the other, not both; if the latter is true, then the Bush tax cuts were an actively terrible idea that let Congress off the hook for controlling spending.

Moreover, as I pointed out in the earlier post, forcing the Democrats to choose between default and massive spending cuts might backfire, making it more likely that Democrats get a sweeping majority which enables them to do most of the budget closure with higher taxes. Once you've defaulted, there are no backsies; we'll be stuck with closing the budget gap in the middle of a recession and some pretty substantial capital flight, which you can expect to produce a pretty significant further decline in the tax take. Why would you want to take such an enormous gamble? I know, you're convinced it will pay off. But just consider for a moment that you might be wrong. There is surelysome chance that you have miscalculated, genius though you may be. What then?

You may think that people in DC live in a bubble. You may even be right. But the longtime residents of this bubble have all spent a lot of time studying one subject: how people get re-elected. And they all seem pretty sure that defaulting on our debt, or shutting down the Social Security system, are not it. If you worry that you cannot secure a credible committment on future spending cuts now, think about what sort of credible commitment you'll get when there are 280 Democrats in the House.