MAY 17, 2023 – Apart from chronic environmental issues bearing down on the entire planet, the most acute potential crisis facing the world right now is the effect of Congressional failure to raise (or better yet, abolish) the artificial cap on U.S. Government debt. This is one of the dumbest of all wholly avoidable, self-inflicted torments.
In addressing the debt-ceiling issue, one must separate it by about 10 miles from the much larger and far more substantive, potential problem of the federal deficit. To link the two, even purely as a negotiating ploy, is as non-sensical as it is non-sensible. It’s like one spouse saying to the other, “I’m not going to send in our monthly car or mortgage payments unless you agree to quit buying bread and beer.” In the first place, the car and mortgage payments are existing obligations; buying or not buying beer or bread won’t reduce the burden of those existing debts. Second, with or without beer or bread in the house, really bad things will happen following a default on those obligations: cratered credit score; car repossession; mortgage foreclosure and eviction. Third, those really bad things will affect both spouses.
To the extent the current square-off between McCarthy and Biden is viewed as a game of chicken, Biden can be perceived as playing with fire too, except what’s lacking is moral equivalency: Continued bread- and beer-binging won’t bring consequences as immediate and consequential as defaulting on household car and mortgage obligations.
All of which takes us to the Republicans’ stated objective: deficit reduction. Here’s where they stumble badly. So badly that what shines through isn’t deficit reduction but quite a different agenda altogether, namely, a swipe at poor people (to give FoxProp more red meat to shout about) and assurance to super-rich people/donors that the Republican Party has their backs (“No new taxes!”). Oh yes, and no increased support of the IRS for beefed up audits—costing an estimated $120 billion in lost revenues over the projected 10-year deficit reduction period—a rather large bone tossed to Republican owners of cash-businesses, who underreport income.
Anyone who can read a pie-chart and has seen one depicting federal spending knows full well that if military spending and Social Security and Medicare, along with tax increases, are “off-limits,” meaningful reduction of the federal deficit can’t be achieved without full-on evisceration of all other federal programs. Good luck subsidized farmers! Good luck hurricane victims! Good luck air-travelers! Good luck motorists traveling the Interstate and all other U.S. highways! Good luck people who want to visit National Parks! Oh yeah, and good luck poor people! – To name but a few rather large groups that will be very much out of luck.
In short, House Republicans are as disingenuous as their constituents are inconsistent. Thanks to FoxProp red meat marketing, “out of control spending” is the flavor of the day—and, Republicans hope, of the next election cycle. But at the same time, the military, Social Security, Medicare and “no new taxes” are permanent flavors of every election.
None of which is to minimize the significance of a burgeoning federal deficit. Yet, a deficit by itself, even a big one, isn’t by itself the problem. It’s how the size of our outstanding debt is—and will be—perceived by global credit markets; what effect the matter of interest on that debt will have on our ability to service it (forgoing expenditures on other needs); what the inflationary impact will be from rising debt—bearing in mind that federal spending and borrowing are hardly the exclusive cause of inflation.
But I’m pontificating from the quietude of an armchair. Our democracy is hardly “quietude in an armchair.” It’s a noisy bazaar of ideas and impressions; impulses and reactions; mountains of data but also heaps of incomplete information and wholesale grab-bags of misinformation. And of course, shouting from the stalls are all brands of hucksters, hawkers, shouters and charlatans. Self-anointed high priests gather there too, as well as . . . the people who make or break the whole affair: we the consumers of it all.
Call the bazaar, “commerce,” just as we call America, “democratic.” May buyers and sellers at the bazaar be happy with their bargains, and may we Americans be lucky in the decisions made by our elected representatives.
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© 2023 by Eric Nilsson
