The Republicans have painted themselves into a corner on the debt ceiling limit by linking Congressional approval to raise the ceiling to a strict program of spending cuts with no tax increases.
Let’s set aside for one instant the fact that only through tax increases to fund greater spending will we start creating jobs again because, as recent history shows, when rich folk have more money from lower taxes, they keep it for themselves, whereas the government either gives it to people to spend or invests it in infrastructure. And let’s set aside the fact that we now have the lowest taxes in the history of the industrialized West and that lowering taxes these past 30+ years has led to a transfer of wealth from the poor and the middle class to the wealthy. And let’s ignore for the time being that lower taxes have led to the increase in borrowing, which creates safe investment harbors for the rich folk who have the extra money because their taxes are too low.
Let’s focus instead on the sheer lunacy of linking a procedural issue—raising the debt ceiling—with a discussion about the future direction of the country.
The Republicans in Congress have tied themselves so closely to the radically right-wing views of the Tea-partiers that they simply cannot vote to raise taxes or to take on more debt, lest they risk looking like Judas-inspired hypocrites.
So the Republicans have this untenable position of having to choose between the firing squad of taking responsibility for an unnecessary default that would lead to economic chaos and the deep plunge into the sea attached to a 600-pound lead anchor of voting for more debt and maybe higher taxes.
The current way out for Republicans, as expressed yesterday by Senate Republican leader Mitch McConnell, is for Congress to abdicate its responsibility for raising the debt limit to the President. With McConnell’s plan, Congress will have the theoretical ability to overrule a Presidential decision to raise the debt limit, but it’ll be about as easy to do as herding 500 unleashed cats through a forest.
Mitch gives everyone what they want: We avoid a major economic explosion and the Republicans don’t have to vote to raise taxes or the debt ceiling. Everyone can go back to bickering about trivialities while our nation slowly declines into a society of haves and have-nots.
It’s a standard Republican answer that Democrats also tend to favor, especially in foreign affairs: Let the executive branch do it. But if Congress keeps abdicating rights and privileges to the President, pretty soon our legislative branch will have no ability to counteract the desires of the executive and we’ll have a dictatorship in which the dictator is elected every four years from a small circle of those wealthy and connected enough to raise the hundreds of millions of dollars it takes to mince out an endless stream of 9-second and 30-second messages.
The truly distressing note in this opera buffa is the one sung by the general public. According to the latest survey by the Pew Research Center, the country is almost equally divided among those who worry more about the debt ceiling not being raised (42%) and those who worry more about the possibility that raising the debt limit will lead to more spending and bigger debt (47%). (FYI, nothing to worry about there: it will happen!)
The trouble with the survey, like so many, is that it never asks an explicit question, such as, “Do you think the debt ceiling should be raised or do you think the country will be better off risking default?” If asked explicitly, a lot of people might come to the conclusion that Mitch McConnell did: Let’s raise it, but don’t blame me.
The survey does show that many more people are worried about raising the debt ceiling than a few months ago. But still, it’s clear that many Americans are surprisingly ignorant of basic business principles. When you can’t borrow money and you have frequent cash flow needs or are temporarily spending more than you make, then you go out of business or you reorganize in bankruptcy. Bankruptcy stains a company’s, and a country’s, reputation, makes it harder to do business and means you have to pay more to borrow money in the future.
Now maybe you can’t keep spending more than you make, but until you have a plan in place to take in more revenues and/or cut spending, you have to keep surviving as a business and as a country.
So we have to raise the debt ceiling now, regardless of what we do later. That many of us are not aware of that obvious fact results at least in part from the lies and distortions that Republicans have been spewing about the economy for decades.