In the Washington Post Personal Finance section, there’s a helpful guide on “How to prepare financially in case of a debt ceiling crash.” It’s not quite as useless as “duck and cover” during a nuclear war, but it’s close.
This is just the beginning of what promises to be about six months’ worth of doom-and-gloom analysis, Armageddon predictions, and the-sky-is-falling commentary from experts and partisans who see great value in trying to frighten us to death about breaching the debt limit.
There are two schools of thought on what will happen in a few months when the Treasury Department exhausts all of its accounting tricks and is confronted with the fact that the government can’t borrow any more money. At that point, we’re told the United States government will be in default and be unable to completely fund programs like Social Security and Medicare, national defense, and other vital expenditures.
The first school is the “We’re all going to die” school of debt management that basically takes the absolute worst that has ever been predicted about a government default and doubles it. We can’t escape it, we can’t ignore it. A default will end life on earth as we know it, and not even the sacrificing of a virgin transgender (just in case the gods like both boys and girls) will save us.
The second school of debt management, known as the “Pollyanna School of Blissful Ignorance,” posits a debt default being a nothingburger. A few Wall Street types might lose their shirts, but they’re rich and they can afford it, right?
One school or another — or, more likely, something in between — could very well be correct and their predictions come to pass. The problem for prognosticators and commentators is that since the U.S. has never actually defaulted on the debt, no one really knows what the outcome would be.
Democrats want us to ignore the $31 trillion national debt completely and just raise the damn ceiling so they can spend our future tax dollars until our eyes bleed. Republicans want us to pretend that they didn’t add as much to the national debt as Democrats and pay no attention to their silly posturing about being federal debt hawks.
Biden insists on a “clean” increase to the debt limit so that existing financial commitments can be sustained and is refusing to even start talks with Republicans. McCarthy is calling for negotiations that he believes will lead to spending cuts. It’s unclear how much he wants to trim and whether fellow Republicans would support any deal after a testy start to the new Congress that required 15 rounds of voting to elect McCarthy as speaker.
Asked twice on Wednesday if there was evidence that House Republicans can ensure the government will avert a default, White House press secretary Karine Jean-Pierre said it’s their “constitutional responsibility.” She did not say whether the White House saw signs at this stage that a default was out of the question.
“We’re just not going to negotiate that,” Jean-Pierre said. “They should feel the responsibility.”
Then we better get busy building bomb shelters because there hasn’t been a “responsible” politician in Washington since Herbert Hoover, who once said, “About the time we think we can make ends meet, somebody moves the ends.”
But what if the problem isn’t the debt ceiling? What if — horror of horrors — the problem is the $31.4 trillion debt in the first place?
Holding a debt of $31.4 trillion is, quite literally, unimaginable. We may as well try to wrap our minds around the concept of infinity. But we have to start somewhere. And if we’re given a choice between more uncontrolled spending and spending cuts, I know what side I come down on.
Congress has long been aware of the impending budget crisis and could have adequately prepared for it. The small group of Republicans threatening to vote against any debt-ceiling increase has the right idea—that is, to force action now. The longer we wait to rein in debt, the harder it will be to escape a looming fiscal tailspin.
The House GOP should unite around these legislators and adopt a simple dollar-for-dollar approach, offering Democrats $1 of additional debt capacity for every $1 of domestic spending cuts today—not 10 years from now—leaving Democrats to designate what nonmilitary programs to cut. Should people wonder why defense should be exempt, they need only consider Ukraine today and the possibility of Taiwan tomorrow.
The Democrats are in almost total control of the media organs that determine the national narrative on any issue. And Republicans have never shown themselves to have the intestinal fortitude — and political smarts — to outlast and outmaneuver the Democrats in a charged partisan debate like this.
This time, the stakes are a lot higher. Without some mechanism to force politicians to begin getting our budget under control and save the country from wrack and ruin, future generations of Americans will curse us for our profligacy and irresponsible behavior.