Mitch Daniels, back when he was George W. Bush’s budget director, on Meet the Press, about the debt limit:
We’re going to raise it, as a reasonable government must. This is really housekeeping, Tim. This has nothing to say or do with future spending. This simply reflects decisions made in the past, and it ought to be treated as the housekeeping matter it is.
“The housekeeping matter it is.” True then (and shame on Senator Obama and other Dems for behaving otherwise), true now. Yes, the numbers are much bigger now, for a variety of reasons, some of them President Obama’s fault, many of them not. But regardless of that, the core fact that Daniels articulated remains the same: “This has nothing to say or do with future spending. This simply reflects decisions made in the past.” The debt ceiling is not a policy decision; it’s a math problem. The relevant policy decisions are made in the budget. That’s the time to take a stand. Not now. This whole charade is completely bats**t insane, totally wolf-face crazy, utterly indefensible on its face.
I know I’m repeating myself. But this whole negotiation process is a total farce, and a dangerous one at that. Few in the media seem capable of recognizing or articulating this point, but it cannot be made enough. I blame Obama for buying into the GOP’s transparently fraudulent framing of the issue (and, separately, for not seriously addressing the debt sooner, though that’s really a separate question); I blame the GOP for said fraudulent framing, for its utter demagoguery, its willingness to hold the economy hostage, its complete disregard for the good of the country and the global economy; I blame the media for its total and inexcusable failure to do its job and inform the public of the basic facts at issue: what the debt ceiling is, what the actual consequences of not raising it would be, which “opinions” are factually supportable, and which are not (included in the latter category, of course, would be the mathematically and factually illiterate stance of leading GOP presidential contender Michele Bachmann, who, in a sane and functional republic, would be hounded and/or laughed out of public life for her facially indefensible stance that the debt limit should not be raised no matter what); and I blame the voters, We the People, for allowing this transparently bogus bulls**t to continue, indeed encouraging it, nay demanding it, of our so-called “leaders.”
More here (PDF) on the actual consequences of not raising the debt ceiling (which must be judged with an eye on daily cashflow, not just monthly or yearly aggregate revenues and expenditures), and why a literal debt default, while unlikely, is not impossible and cannot with 100% reliability be prevented by Treasury (hint: it’s the markets, stupid). Also this, from center-right economics writer Megan McArdle:
[Hardline conservatives often] retort that there’s plenty of money for debt service, military payrolls, Social Security, Medicare, and Medicaid, and that therefore, people like me are just scaremongering about the consequences of refusal to raise the ceiling. … I don’t think people are really thinking this through. They’ve got this big “spending” basket in their head, but they’re not focusing on the line items.
Let’s say that we refuse to raise the ceiling. Does…prioritization…mean that we don’t need to cut politically untouchable programs?
No. Let’s think through what would happen if we tried to use this plan:
* You just cut the IRS and all the accountants at Treasury, which means that the actual revenue you have to spend is $0.
* The nation’s nuclear arsenal is no longer being watched or maintained
* The doors of federal prisons have been thrown open, because none of the guards will work without being paid, and the vendors will not deliver food, medical supplies, electricity,etc.
* The border control stations are entirely unmanned, so anyone who can buy a plane ticket, or stroll across the Mexican border, is entering the country. All the illegal immigrants currently in detention are released, since we don’t have the money to put them on a plane, and we cannot actually simply leave them in a cell without electricity, sanitation, or food to see what happens.
* All of our troops stationed abroad quickly run out of electricity or fuel. Many of them are sitting in a desert with billions worth of equipment, and no way to get themselves or their equipment back to the US.
* Our embassies are no longer operating, which will make things difficult for foreign travellers
* No federal emergency assistance, or help fighting things like wildfires or floods. Sorry, tornado people! Sorry, wildfire victims! Try to live in the northeast next time!
* Housing projects shut down, and Section 8 vouchers are not paid. Families hit the streets.
* The money your local school district was expecting at the October 1 commencement of the 2012 fiscal year does not materialize, making it unclear who’s going to be teaching your kids without a special property tax assessment.
* The market for guaranteed student loans plunges into chaos. Hope your kid wasn’t going to college this year!
* The mortgage market evaporates. Hope you didn’t need to buy or sell a house!
* The FDIC and the PBGC suddenly don’t have a government backstop for their funds, which has all sorts of interesting implications for your bank account.
* The TSA shuts down. Yay! But don’t worry about terrorist attacks, you TSA-lovers, because air traffic control shut down too. Hope you don’t have a vacation planned in August, much less any work travel.
* Unemployment money is no longer going to the states, which means that pretty soon, it won’t be going to the unemployed people.
These are just the very immediate, very theatrical outcomes. Obviously, over any longer term, you’d have issues from bankrupt vendors stopping work funded with federal highway money, forgone maintenance on things like levees and government buildings, and so forth. Averting any of these things would require at least small cuts in Social Security, Medicare/Medicaid spending, or military payrolls.
McArdle then proceeds to offers this bit of political advice to conservative purists:
Now, maybe you look forward to these outcomes. There are certainly some on this list that I would be okay with. But because I am not delusional, and I did not fall off of a turnip truck last night, I recognize that the American public does not agree with me, and that if any of these things happen, they will freak out and besiege their local representatives. …
[If GOP hardliners] hold out, the only thing that would happen is that they would be unelected in 2012. The tea party is not a majority. If you piss off every single other constituency in the United States, they will gang up against you, and they will win. Welcome to representative democracy. …
Over and over I am beseiged with people saying, “So, what, are we just supposed to give in”, as if convincing me of the moral righteousness of their plan will somehow produce a political coalition that can deliver what they want. But the universe is not here to please us. Being right in some metaphysical moral sense will not make the government any smaller unless you can also deliver the votes.
