Washington is now a place where the unthinkable becomes thinkable.
Remember when the media assured us that the draconian budget cuts under sequestration were so awful that Congress would never let them go into effect? Now hardly anyone talks about that.
Remember when the smart money bet that both parties would come to their senses and not shut down the government for the first time since the Clinton era? We’re now on Day 10.
And then there is the prospect of a government default. Surely our political leaders would pull back from the brink and not terrify the global credit markets, let alone fail to make good on past U.S. debts?
Aha, but it’s now thinkable. In fact, some Republican politicians and commentators on the right are edging into the no-big-deal camp.
Default just gets bad press, they say. What would be so bad? The administration could delay it, or pay our debts while cutting other spending, and so it’s just a new way of going on a fiscal diet, right?
Actually, that’s not what most mainstream economists believe. They think we’re playing with fire.
Here is a strong rebuttal, not by an overzealous left-winger, but by Daniel Larison of the American Conservative, who says that small-government conservatives seem to have “no sense of prudence or consideration of unintended consequences”:
“If this is how they approach the most basic responsibilities of governing, why are voters going to trust them to implement their larger policy agenda?
“Take the recent claims from many conservatives in Congress that there won’t be a default if the debt ceiling isn’t raised. Even if it were technically possible to prioritize payments in the way that they claim, it would still raise borrowing costs, undermine the dollar, and probably induce a recession, and all the while the size and cost of the government would not have been permanently reduced one bit. Toying around with default threatens to impose greater costs on American taxpayers rather than reduce them. It is the perfect example of striking a symbolic blow against fiscal irresponsibility while adding to the country’s fiscal problems. If one seriously wants to control and reduce government debt, raising the debt ceiling ought to be the last thing that one worries about, since refusing to raise it simply makes paying off the debt that has already been incurred more expensive.
“Making useless ‘stands’ of this kind not only make small-government conservative ideas unappealing to many other Americans and provoke backlashes against them, but they make even those that agree with many of those ideas conclude that their representatives are ill-suited to governing.”
Despite such warnings, pols such as Republican Sen. Pat Toomey are being dismissive. He said yesterday on MSNBC that the White House is trying to “cow” Republicans with the threat of default.
“There’s zero chance that the U.S. government is going to default on its debt. It’s unfortunate that people have conflated this idea of not raising the debt ceiling immediately on Oct. 17 and somehow defaulting on our debt,” Toomey said.
In his New York Times column, Paul Krugman says that calamity may not ensue at the stroke of midnight. But he says the default deniers insist “that the government can prioritize, so as to avoid a default on interest payments, that this would avoid damage to the financial system, and that this means that everything will be OK. This is what you’re hearing, for example, from erstwhile respectable Republican economists, who have (surprise!) mostly fallen in line as the crisis looms. The crucial point here is that even if they’re right about interest payments -- which is unclear -- the government will (a) still go into default on obligations to vendors, Social Security recipients, and so on (b) be forced into spending cuts so large as to guarantee a recession if the standoff lasts any length of time.”
Sounds unpleasant, does it not?
Here’s hoping we won’t have to find out what happens if the debt ceiling is breached.
Meanwhile, the debate over whether the administration is making the shutdown worse than it needs to be, as I talked about yesterday, continues to reverberate. Charles Cook picks up the argument at National Review:
“To deny that the executive branch is going out of its way unnecessarily to make life difficult for people — as many still are — is to pretend that the hundreds of such stories, reported daily across the country, are falsehoods manufactured to hurt the president. Yes, government shutdowns have consequences — even shutdowns that leave 83 percent of the government operating as usual. But, consequences or not, there really is no good reason for the federal government to send barricades and wire-ties to unguarded open-air parks, to close off unmanned scenic overlooks, to evict homeowners from their private property on public land, or to threaten the livelihoods of hoteliers whose sole crime is to own a business on an unsecured public route.
“There is no good reason, either, for the government to shut down the index pages of some, arbitrarily chosen, websites while leaving the rest of the pages running. No good reason for the federal government to try to close Mount Vernon and Claude Moore Colonial Farm, neither of which it owns or runs. No good reason for the federal government to threaten to cancel the Air Force–Navy football game when there were private donors waiting on the sidelines. And certainly no reason for armed rangers to hold senior-citizen tourists hostage inside their Yellowstone Park hotel for the high crime of stepping outside and taking photographs.”
Perhaps, but this is what happens with a partial government shutdown: You get lots of unintended consequences.
From another conservative perspective, John Podhoretz chides the shutdown crowd in the New York Post:
“This is what my fellow conservatives who are acting as the enablers for irresponsible GOP politicians seem not to understand. They like this fight, because they think they’re helping to hold the line on ObamaCare and government spending. They think that they’re supported by a vast silent majority of Americans who dislike what they dislike and want what they want.
“I dislike what they dislike. I want what they want. But I fear they are very, very wrong about the existence of this silent majority, and that their misperception is leading them to do significant damage to the already damaged Republican 'brand.'…
"One thing we know for sure is that it’s not an equal fight, this fight between a man who received 65 million votes nationwide and a man who received 246,000 votes in one congressional district in Ohio.
“Meanwhile, Boehner is basically the face of the U.S. Congress in the eyes of the public. John Boehner is also the effective head of the Republican Party. And the U.S. Congress is viewed favorably by . . . 11 percent of Americans.”
It all comes back to the math.