The price of averting a debt payment crisis


Congressional Republicans are threatening to shut down the government unless Obamacare is defunded.  But the real danger to the government’s functioning, as blogger Steve Benen pointed out, is the refusal of the Republicans to raise the debt ceiling unless their demands are made.  These demands are shown in the graphic above.

These demands are basically the Mitt Romney presidential platform, which the American electorate rejected a year ago.   All of them, in my opinion, are bad for the country.  But if I’m wrong about that, then let the proponents enact laws through the regular lawmaking process.

The fact that the Republicans have a majority in Congress at all is due to the way congressional districts are drawn.  Democratic congressional candidates last year got a million more total votes than Republican candidates.

I don’t know what the effect of refusing to raise the debt ceiling would be.  It seems to me that the Federal Reserve Board could solve the problem by creating money to buy up the excess debt.  Maybe this would set a bad precedent.  In any case, I don’t expect this to happen.

One of the big assets of the United States is the world’s confidence that our government debt will be repaid.  To the extent this is damaged, it could add untold billions in the government debt service costs and maybe even undermine confidence in the U.S. dollar as the world’s reserve currency.  Risking this is deeply irresponsible.

The criticism that is made of President Obama is that he refuses to compromise.  But the ordinary meaning of the world compromise is to give up something in order to get something in return.  There is no question of compromise here—only the question of whether and to what degree he will give in to threats.

Six years ago, we had the same political situation that we do now, in reverse.  Republicans occupied the White House and had a majority in the Senate, Democrats had a majority in the House of Representatives.  Congressional Democrats never threatened to close down the government or damage the credit rating of U.S. Treasury bonds in order to get their way.  Nor, for that matter, did Senate Democrats insist on a 60-vote majority for routine business.

When I studied political science in college in the 1950s, I was told of the superiority of the pragmatic American political culture to the ideological French and Italian political parties, who pushed ideology to the limit regardless of consequences.  But that was then.  This is now.

Click on A debt-ceiling ransom note takes shape for Steve Benen’s whole article on The Maddow Blog.  Hat tip to Kevin Drum.

If I were more paranoid than I am, I would think that Republican leaders are conspiring to make President Obama seem good by comparison.

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