Diane Swonk, chief economist for Mesirow Financial and an economic advisor to the Congressional Budget Office and the Federal Reserve Board, appeared on MSNBC yesterday to talk about the debt-ceiling crisis created by Republicans. Analyzing recent events, she seemed flabbergasted by the political recklessness. (thanks to reader S.D. for the tip)
For those who can’t watch clips from work computers, Swonk explained, “Coming back from Europe, the Europeans just can’t believe we’d be so foolish as to decidedly squander away our debt rating in such a frivolous manner. This just doesn’t make any sense whatsoever.
“Right now, financial markets in the U.S. are giving this a 0% probability of happening. With all the time I’ve spent in Washington, although everyone believes it’s just inconceivable, those who don’t agree it’s inconceivable are the Congresspeople we need to actually vote on it. And that’s what really is disturbing: they’re the ones who are unconvinced that there’s any problem out there.
“Everybody else is saying, ‘This is just so horrible. There’s no way they could possibly be this stupid.’ Well, I’m not sure. They could possibly be so stupid.”
Asked how economists can explain reality to those who don’t want to raise the debt ceiling, Swonk went on to say, “I don’t even know how to explain it any more clear to them…. This is something you just don’t play with.”
It got me thinking about how I might try to explain this to someone outside the United States. Why would American officials, on purpose, choose to stop paying America’s bills? Why would these officials want to deliberately undermine the country’s credit rating? Why would elected lawmakers, who presumably like their country, risk an economic crash on purpose? Why would American voters elect such lunatics?
Alas, I’m not sure how I’d answer any of these questions from an outsider looking in. The best I can do is try to explain that there’s a deep strain of madness that’s overcome one of our major political parties, and it’s an illness that puts us all at risk.