The fight over the debt ceiling has been over for about a month now, but the implications of the surreal tragedy continue to linger.
We know about some of the consequences we can clearly identify — the first-ever downgrade of U.S. debt; roiled financial markets; growing uncertainty about the stability of the American system — but there are other considerations below the surface. Republican pollster Bill McInturff made the case last week that the scandal “dealt a devastating body blow to public confidence in the economy and government.” In the Wall Street Journal today, Gerald Seib has a related piece about “the importance of the summer’s debt negotiations” and how they “affected Americans’ confidence.”
Jon Chait connects the dots.
The debt ceiling hostage crisis was a political catastrophe for both Obama and Congressional Republicans. He came away looking weak. They came away looking crazy. The episode, though, had more than political ramifications. It had economic ramifications. Confidence in the economy — the number one conservative explanation for economic weakness — took a real and justified plunge.
The Republicans pursued a strategy that torpedoed the economic recovery, and, indeed, may well bring about a double-dip recession. Voters may punish House Republicans at the polls in 2012, but they’re at least as likely to punish Obama. That Republicans may gain the White House on the shoulders of a Republican-induced recession offers lessons about the incentive structure of our divided system of government that are frightening to contemplate.
That’s exactly right. Congressional Republicans were fully aware of the risk and catastrophic results of the game they chose to play, but they played it anyway. They even knew the political/electoral threat, but didn’t much care, at least in part because the GOP assumed it would cost President Obama dearly, and it has.
To use a Cold War metaphor, Republicans were presented with Mutually Assured Destruction, and concluded, “Yep, we can live with that.”
Indeed, even now, GOP leaders intend to force us to go through the same strategy, over and over again, into the future.