If you feel like you’ve become nothing more than a ball of silly putty being twisted, stretched, shaped, and molded only to be wadded up, wiped out and started all over again for the amusement of the person who owns you…welcome to the middle and low-income families struggling to survive in the economy of the United States of America.
No sooner did we circumvent one fake fiscal disaster at the eleventh hour as Barack Obama and Congress agreed to keep most tax rates from rising, than we find ourselves quickly approaching an actual fiscal disaster being used by an obstructionist GOP as a weapon of financial mass destruction by threatening to destroy the full faith and credit of the United States just to claim a political victory. Superpower? Try superstupid.
In roughly five weeks, the Treasury Department runs out of legal authority to borrow funds to pay the bills that the same GOP approved, or failed to deny, to begin with. Failure to raise the “debt ceiling”, President Obama has warned, would force the government to default on its obligations. Republicans say they need some sort of “leverage” to drag a spendthrift president to the negotiating table.
I won’t debate the blatant hypocrisy coming from the GOP; a party whose President allowed the worst attack on mainland America in history, started two wars that had nothing to do with the attack, was unsuccessful in bringing the perpetrator of those attacks to justice, and stole the money from the Social Security Trust Fund to fund the wars that were based on lies. Then, just to put the icing on the cake, he gave out two rounds of tax cuts that did NOT stimulate the economy and now his party has the nerve to call President Obama, who inherited the whole mess, a spendthrift for trying to keep the sinking ship he inherited afloat.
What I will argue is that the debt ceiling that this same bunch of hypocrites is trying to use to blackmail their way into more disastrous policies, is a sublimely peculiar and simple parliamentary procedure that they have tried before only to box themselves into a corner that backfired on them and caused the entire world to doubt that because of these yahoos, we can’t even make sensible decisions about our own country, much less be the de facto world leader we once were.
What Were We Thinking?
Believe it or not, the idea of a debt ceiling made sense. Until roughly a hundred years ago, Congress approved U.S. bond issues one at a time. Between 1917 and 1941 it consolidated those approvals into a single debt limit. So the debt ceiling, which was adopted in 1917, did have a purpose once—it was a way for Congress to keep the President accountable. Congress used to exercise only loose control over the government budget, and the President was able to borrow money and spend money with little legislative oversight. But this hasn’t been the case since 1974. Congress now passes comprehensive budget resolutions that detail exactly how the government will tax and spend, and the Treasury Department borrows only the money that Congress allows it to.
Until this batch of anti-American confederates, (in this instance, staunch believers of a state’s right to do as it pleases despite enjoying the perks afforded them from the rest of the country) the debt ceiling has been little more than an annoyance. But as American politics has become more polarized, it has become to resemble a financial WMD to be lorded over anyone who doesn’t acquiesce to the political whims of the GOP. They just love it when they can play superpower with 1 percent of the population doing the fighting for them; they just don’t like taking care of the Americans that won’t offer up their servitude, or the sick or the elderly, or those other pesky problems that running a real country involves.
In the summer of 2011 Republicans openly used the threat of default to try and force President Obama and Democrats into a deficit-cutting deal that included only safety nets for the poor, the unemployed and the elderly. The incident prompted one credit-rating agency to strip America of its triple-A rating.
Republicans, furious that in the recent tussle over the “fiscal cliff” they were embarrassed one time after another as the public sided against their threats causing them to accept tax increases with no spending cuts to show for it.
Republicans feel like they can exact their revenge, despite the very real damage it would do to the country and are openly bragging about looking forward to causing real pain over the debt ceiling fight. Democrats, other than the calm resolve of a second-term President Obama, have been floating crackpot responses such as having the Secretary of the Treasury issue a $1 trillion coin (which is legal, but bizarre to even suggest) in order to cicumvent the debt ceiling or by convincing President Obama to invoke the 14th amendment to the Constitution, which they interpret forbids default under the Constitution.
Failure to raise the debt ceiling would force immediate spending cuts of the magnitude that has wreaked havoc on the UK and the Euro zone. It would also deprive doctors, pensioners, contractors and millions of others of money needed to meet their own obligations, setting off a chain reaction of defaults. Even a few days’ default could severely rattle the global financial system, which relies on Treasuries in immeasurable transactions which almost certainly incite investors to dump their U.S. Bond holdings, driving up interest rates.
Outlived It’s Usefulness
But the real problem is that the debt ceiling long ago outlived its usefulness. Congress already has the final say over the budget. The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s certainly no debt limit mentioned in the Constitution.
The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he’ll end up violating the debt ceiling.
If Republicans throw a tantrum and wage another fight over whether America should meet its legal obligations, they will reinforce the impression that the country can no longer be trusted. For the U.S. to default now, when investors are happily lending it money at exceedingly reasonable rates, would be analogous to shooting yourself in the head for failing to follow your diet.
Of course for now, the Republicans love the debt ceiling: it allows them to pontificate against borrowing more money (which voters hate) without having to vote to cut any specific programs or raise taxes (which voters also hate), while hopefully confusing the general public just enough to keep their low-information supporters believing that they’re representing their interests. It also turns the national debt into front-page news, centering the attention of voters and politicians; a move they mistakenly think promotes accountability. In reality, debt-ceiling votes merely perpetuate the illusion that balancing the budget is simple.
But recklessness does equal power: that’s why Eric Cantor, the House Majority Leader, and John Boehner, the Speaker of the House, have implied that they’re willing to go the distance this round (in part by suggesting that their fellow party members will force them to) but also that they can be persuaded to do the right thing.
If we somehow end up with a halfway sensible budget deal with this Republican attitude it will be the result of luck, not design. Instead of figuring out ways to raise the debt ceiling, we should simply go ahead and abolish it. The U.S. economy has plenty of real problems to deal with. We shouldn’t have to wrestle with ones we’ve created for ourselves.
If any other country was acting like the spoiled brats in the Republican Party, those same Republicans would be clamoring that the offending country was a threat to the rest of the world and should be severely punished.
In this instance I happen to agree. If they cause another threat to the U.S.’s ability to compete on the world stage, the Republicans should be severely punished.