We Need A Plan for the Debt Ceiling Crisis, Not More Politics
As the endless political posturing continues, we all can understand that the debt ceiling game of chicken draws ever closer to real and substantial problems – as much over the threat of default on the government’s ability to pay bills as on the actual arrival of that fateful day.
Clearly, we’re missing the Big Compromise that may pop up at the last moment – after politicians from both parties, but particularly the extreme Republican House caucus wrings the last drop of would-be electoral advantage.
Still, Treasury Secretary Janet Yellen is doubling down on the real dangers starting two weeks away that will strike services, financial markets, everyday prices, and an unprecedented undercutting of U.S. power in the world.
While information abounds freely about the expected impacts of not resolving the debt ceiling, there has been little public reporting to date about what exactly government agencies are doing to implement the effects of a meltdown or even the results of a slowed inability to pay our bills if the Congress comes to its senses and kicks the can down the lane for a short time to extend these negotiations that finally seem to be getting to the nub of the issues.
Instead, of course, we have free-flowing opinion-making with few specifics to bolster the power politics of a showdown and open speculation about which magic button the White House can push to suddenly recognize Constitutional power to ignore the debt ceiling or to mint a trillion-dollar coin or two to cover the problem with newly created cash.
We prefer magic to hard solutions – especially if the problem has been totally created out of political division and not out of need. This debt ceiling problem is not only manufactured but created of whole cloth by extreme right-leaning House Republicans acting like spoiled children looking for attention. That Republicans refuse to look at taxing the rich at a fair rate or companies that currently pay nothing belies any commitment to balancing building debt as political and not serious.
If you want the other side over “fairness,” Joe Biden and company should have known this was coming since last November, but apparently thought logic would apply to what is an emotional outburst from their opponents.
Protecting Investments, Not Health
From the various news reports, the Republican caucus in the House has quite a few members who believe the problems are hyped and over-stated, that shutting down government on the one hand and defaulting on our bills on the other won’t prompt a market crash or tip a set of global dominoes.
Indeed, you can tune into Fox News panels or visit right-wing websites to see a certain glee in the idea of shutting government down, the ultimate anti-Deep State sentiment. Donald Trump seemed to buy into that notion last week at his CNN town hall presentation, and there is no real variation in polling among would-be Republican voters about threatening the sudden stop of Social Security checks or services to veterans or even closing national parks just before summer.
There has been a good deal of reporting about how Wall Street and financial markets are preparing themselves, as well as dissemination of advice on what to do about your own investments. Forbes Magazine, for example, which is quoting experts who see default by the U.S. Treasury as triggering “financial Armageddon,” even is offering information about which sectors might thrive best through a default.
If investment protection is your priority, the magazine is pointing positively to defense stocks as safest since international tensions will rise, and bank stocks because default will hike governments’ reliance on additional borrowing to pay inflated service costs. Even treasury notes might be a good choice because they will become cheap quickly through devaluation, and utilities, real estate and precious metals holdings are always considered good as the world suffers. CNN adds that other financial securities, derivatives, and international finance will be hit in a fast-increased widening of ripples.
If on the other hand, you might be a tad worried about millions losing health care or Social Service checks that pay the monthly bills or airplanes that require federal air controllers or even Border Patrol defenders to address the ever-criticized southern border, we have little information about exactly how the government will set its priorities in a cash-starved mode.
What’s the Plan?
As with most emotional set-tos, reason is of limited concern in this dispute. If the showdown did not come as a part of a routine debt ceiling discussion, it would have come in the fall for budget week.
And even in the best of times, economists argue about strategies that are best for the country. Arguing after the fact that helping people and small businesses survive covid shutdowns seems particularly futile. Arguing that the best answer to our strange times of high prices and high costs is to cut social services seems Darwinian. Arguing that we need to grow dependence on fossil fuels at a time when the climate has begun its rage campaign over destructive policies seems, well, unrealistic at best,
If Biden thought he could wish away a split Congress with tiny majority margins, he was wrong; if Republicans believed that thinking makes it all possible without the hard facts associated with spending cuts, they need to hear from constituents who in real life take more proportionately from government services in red states than they do in blue states.
I’d like to know that there is a plan, even if that last-minute compromise arrives to provide more time or even to settle the matter.
Are we going to make our international debt commitments while putting upwards of two million federal workers on furlough? Are we going to keep our military and veterans fully covered? Are we making immigration deportation services a priority over continued Social Security payments?
We’re due some real reporting on how the government plans to manage all of this. We have plenty of time for politics later.
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