I just can’t bring myself to write about this debt ceiling mess. What begins in a farcical congressional procedure likely ends in tragedy for American governance and for so many people.
Below is a guest post by A. Pond, the pseudonym of a colleague who wishes to remain anonymous.
In policy terms, the fundamentals of the debt ceiling story have hardly changed in over a week. Meanwhile, the politics have evolved, but in predictable ways. In fact, considering politics alone, it is a mystery why the leverage the debt ceiling affords has not been exploited many times in the past to the extent it is today.
The debt ceiling debate today is a story of heretofore untapped political power. We now know that politicians of the past have been holding back. Just as the theory of profit maximization offers strong predictions of the economic negotiating behavior of firms, the maximization of bargaining leverage does so in the realm of political negotiation.
Thus, it was clear by the time Obama and Boehner spoke to the nation last Monday night that there was no chance of an “early” compromise on a big and balanced package. The time to turn the manufactured crisis into an opportunity had ended if not that night, then at least several days prior. Having seen the debt ceiling turned into political tool, why should we expect any political leverage to be left on the table?
The urging of policy wonks to do something quickly had no effect. Politics has sucked all the oxygen from the atmosphere, or at least from Washington. It is now inevitable that the clock will wind down toward possible catastrophe: an economy killing default or failure to sustain levels of spending required by law. There’s still time to act, but not much and not with anything other than a rushed half-measure. Will the globe’s leading economy be strangled by its severely dysfunctional politics, a figurative death atop the world?
The situation reminds me of the account in John Krakaur’s Into Thin Air, in which one climber (whose name I cannot recall) sat for hours in a storm near the Everest summit, refusing to descend. From the base below, his team radioed, imploring him to move, to put one foot in front of the other, to save himself from a worsening situation. Eventually the inevitable happened. His oxygen depleted, he met personal catastrophe, a literal death atop the world.
Of course, the US need not experience catastrophe by defaulting on the debt or by failing to make good on its other obligations. Even without action by Congress, the Obama Administration could decide to continue issuing debt, the so-called constitutional option.
Some say this would set a dangerous precedent. Maybe so. But one must view every decision within the context of available options. The alternative is to confirm that the debt ceiling can be taken hostage in a way never experienced before. That admits a tremendous power in Congress, giving that branch a degree of leverage over the economy never before so fully exploited. Is that not a dangerous precedent too? Do we wish to face political debt ceiling threats again, and again, and again?
Keep in mind, if Congress finds the President’s actions so egregious, it has some recourse: impeachment. If the debt ceiling can be taken hostage, any President with an interest in protecting the economy (which we can safely assume is every President there has ever been or will ever be) has no recourse.
I do not understand any argument that implies it is OK for Congress (or one chamber of it) to so easily threaten to blow up the economy. Such a thing strikes me as self-evidently unpatriotic. And, if it is unpatriotic to threaten severe economic damage, isn’t it also unpatriotic to resist the demands that would prevent it?
In brief, this is an argument for removing the debt ceiling as a congressionally-available political instrument. It’s too powerful. Its down-side is too grave. It is so potentially damaging to the nation that it should neither be employed in the service of any demand nor should any demand be resisted at the risk of that damage.
The debt ceiling, if constitutionally valid, is the ultimate trump card, the economic atomic missile aimed at America. Is it valid? Should it be? Does Congress possess the codes to this nuclear weapon? Or in this realm, is the President the commander in chief? If he is, will he act like it? If Congress fails the nation, only by the President’s actions can we learn the answers to these questions.
[Cross-posted at The Reality-Based Community]