You have to hark all the way back to the blog “The Looming Debt Ceiling Fight”, posted at this site on January 3, 2013, to understand why this latest entry is entitled “Here we go again”. The fact is, this coming February, it will again be the Constitutional responsibility of the US Congress to pay bills it had already accumulated by raising the debt ceiling. And, once again, congressional Republicans have stated flat-out that will not oblige unless they are granted concessions by President Obama. So we are headed towards another showdown with the same two sides pitted against each other.
As every credible economist has made clear: This is no small matter. If we default on our debt obligations, we damage our credit rating, lower lender confidence in us who jack up interest rates on money that they loan us. Financial markets around the world will feel the shock and predictably, our own domestic markets will tumble to the detriment of millions of Americans’ retirement accounts. In aggregate, such a disastrous turn of events would chop the legs out from under our still-plodding recovery from the great recession of 2008; a recovery that has been predicted to pick up more steam going into 2014. Indeed, it’s that very same forecast that most recently caused the Federal Reserve to begin cutting back on its quantitative easing program; a promising sign to be sure.
So that there is no misunderstanding, here is a fable that pretty much fits what congressional Republicans are about to try to pull off. The names of those involved have not been changed since there is no need to protect the guilty: Paul Ryan, Rand Paul, Ted Cruz, Mitch McConnell and members of the House Tea Party caucus like Louie Gohmert, Steve Stockman and Michelle Bachmann all troop into a bar and order a round of drinks, announcing that they intend to run a tab. That first round is followed by a second, and then another. The group then informs the bartender that they have no intention of paying unless they are provided with a fourth round of drinks on the house.
No sane proprietor who values his own financial wellbeing would cave to such a demand. A year ago, President Obama didn’t either, and he has already asserted that he has no intention of changing from that posture. Fully justified, he will not negotiate with economic terrorists and that is exactly what the aforementioned Republicans are.
You have to wonder why these same GOPers are running this “game” again? Last year’s showdown caused their approval rating to descend to dungeon-level depths. The most plausible answer to this question is that their grassroots constituents are demanding it and will vote to turn out of office, anyone who fails to fall in line and do their bidding. That those same blocs of voters would insist on risking economic calamity is likely a product of their abiding distrust of the federal government and economists in general; i.e. “There is no calamity waiting to happen”.
So, long as our Congress is populated with Republicans who lack the guts to stand up to the naysayers and tell them the truth, we will see this debt ceiling debacle play itself out over again over again.
This will be my last blog of 2013. Everyone have a merry Christmas and a happy new year. I hope you’ll stay with me in 2014.
1. Recall the time-honored verity which holds that insanity is doing the same thing over and over again and expecting a different result.