Mitch McConnell, who passes, these days, for a sane Republican politician:
The reason default is no better an idea today than when Newt Gingrich tried it in 1995 is that it destroys your brand. It would give the president an opportunity to blame Republicans for a bad economy.
Please note: a bad idea not because it would in fact cause the economy to tank, not because it would impair the national credit, not because it would be in flat violation of the Constitutional ban on questioning the validity of the public debt (and therefore of the oath of office of any Senator or Representative who votes to bring it about), not because it’s dishonorable not to pay your bills when they come due, but because it might not be good for Republicans.
I’ve said it before, and I’ll say it again: a party grossly unfit to hold any share of power.
Footnote One might, indeed, argue that hitting the debt ceiling wouldn’t lead to default on the debt. But that’s not McConnell’s claim. He claims that default would be bad only in partisan terms. Feh.
Great point.
You chopped off the first part of the quote and capitalized the first letter without putting brackets around it to reflect the alteration. The quote, already fragmentary in the article you link actually specifically responds to the claim that the Democrats “want to blame the economy on us.” The part that you then go on to quote is thus made expressly in response to what McConnell predicts will be a political charge made by his adversaries, and in that context it would only made sense to discuss the political aspects of the issue in response to a hypothetical political charge against his own party. It would make little sense to say that the Democrats want to blame us and here’s why default would be bad for the country as a policy matter. That would be a non sequitur.
RC
Indeed, feh. Makes that bizarre deal he offered without consulting with his party more explicable: Intellectually he’s already on the other side, he’s just groping around for a way to arrange to lose without it being too obvious. Once you’ve internalized the other guy’s premises, (In this case, that balancing the budget, even temporarily, is impossible/cosmically undesirable, so not raising the debt ceiling = default.) it’s all over but the shouting.
Back in ’95, the debt wasn’t nearly so big, the connection between not raising the debt ceiling and default was even more farcical.
More and more I’m convinced that the GOP will never be worth anything as an opposition party until it’s existing leadership has been purged. I’d say just dump them and go third party, if the ballot and campaign laws hadn’t already been rigged to make that a practical impossibility.
(Not that it matters, but “CThomas” is the same person as “Carnap.” Apologies for the multiple names.
Brett, when I examine the current Republican Party, with its pathological, inconsistent, anti-intellectual and socially destructive narcissism, I see you. I would think you would be proud to see your modus operandi writ large. Buck up boy, and take credit for being such a prescient role model.
Brett, you do understand that the government shutdown in ’95 was about failure to pass a budget bill. Gingrich was also holding a debt limit increase hostage at the time, but it was the lack of a budget that forced the shutdown.
Brett, I honestly think you need to go to a shrink and take an intro to Modern US Gov’t course. If you only have time to do one, go to the shrink and ask him/her if your incessant trolling on a progressive msg bored is healthy. You’d be surprised at the feedback, I think.
Is it possible that McConnell is simply grunting to his fellow party members in the simple terms that they can understand? They don’t care about trashing the global economy, but they care about damaging their brand.
Does Mark always butcher quotes to serve his own ends?
In all seriousness, David, I think (a) it’s obviously always important to be scrupulously fair and accurate in characterizing facts and quotations, (b) this is, if anything, even more important when you are using the facts to make serious ethical charges against the person you are discussing (e.g., “grossly unfit”), and (c) Mark’s truncation of the quotation was quite significant for the reason I noted above. In answer to your question I’ve only started reading the blog a few days ago, and so I don’t yet have a basis to know whether this post is representative or not.
Anyways, let’s resume insulting Brett and stop talking about it.
RC
I think James Wimberley in his post from a few days ago pegged it best. Why doesn’t someone throw out a proposal to eliminate the debt ceiling all together. It’s becoming more and more a meaningless ceiling. With each vote to increase the debt limit, it starts to look like printing money. Can anyone really take it seriously. And who among us has a personal line of credit for which we’re allowed to decide on our own to extend the limit? It is ridiculous. I agree with Brett, the Republicans have bought this false premise that the Democrats have thrown out. What they need to do is say screw the debt limit, we’re getting rid of it.
Should we let the other side get away with defining “default” narrowly as merely “defaulting on the debt”? Anybody who has entered into a contract with the US Government - soldiets, hospitals, defence contractors, civil servants, Congressmen, federal justices, etc etc - may now find these contracts broken; a very large subset of them, perhaps all, might find the threat realised. Recipients of benefits like Social Security and Medicare don’t have contracts, but they have entitlements to payment defined in law. It’s a very serious matter for the US Governmen to brealk its legal promises of payment to its own citizens on a very large scale. In common parlance, this is called “default”, and if you or I do it it’s followed by civil damages or bankruptcy. In the case of governments, it’s often followed by revolution.
Brett & co can plausibly argue that the claims of the Chinese government as holder of a trillion dollars of Treasuries have lexical priority over those of US service members and pensioners under the 14th Amendment, or to preserve the world capitalisr system. Morally, it’s a hold-your-nose case.
“…And who among us has a personal line of credit for which we’re allowed to decide on our own to extend the limit?”
Sovereign nations who have their own currency and decide to do so. A nation is no more a “person” than is a corporation.
Mark should have placed brackets around the “T” is “The,” but that is the extent of his sin. It would not have been a non sequitur for McConnell to have said that Democrats “want to blame the economy on us and the reason default is no better an idea today than when Newt Gingrich tried it in 1995 is that [paraphrasing Mark] it would cause the economy to tank, impair the national credit, be in flat violation of the Constitutional ban on questioning the validity of the public debt (and therefore of the oath of office of any Senator or Representative who votes to bring it about), and be dishonorable not to pay your bills when they come due.”
I should have written, “It would not have been a non sequitur for McConnell to have said that Democrats “want to blame the economy on us, but we will not allow a default, because default is no better an idea today …”
Bux agrees with me? Strange world. I’d love it if the idea caught on the right. But it makes a kind of sense. Boehner and McConnell - I don’t know about Cantor - realize that the current game of H-bomb chicken is playing out badly for the GOP, and theyhave a sliver of concern for the consequences of the bomb’s going off, or at least of being blamed for them. But they feel their base will not allow them to pass up a golden-looking opportunity of advancing the Norquist/Tea party agenda. The next time will play out exactly the same with a Democratic President. With a Republican one, they don’t need the lever. So a grand deal that makes the problem go away forever might look good to them.
“. . . And who among us has a personal line of credit for which we’re allowed to decide on our own to extend the limit?”
Donald Trump, that’s who. Or other very wealthy individuals who use the threat of personal bankruptcy as a club on their creditors.
I read McConnell a bit differently than Prof. Kleiman.
McConnell rightly understands that a key part of his constituency is like Brett - indifferent to, or happy about, the economic consequences of failing to raise the debt ceiling. McConnell has already tried to go around them; that didn’t work. Now he’s attempting to win them over by pointing out that something they care about - the opportunity to damage Obama - is at risk here.
Beth in OR - One of the more prescient ststements I’ve seen lately (along with J. Wimberly’s “get rid of the debt ceiling).
Re: Mark’s supposed faux pas - McTurtle has made statements in several venues that have precisely the same thrust as Mark’s shortened quote. Thus, while it can be correctly ointed out that there is an error, it is only technical, not semantic; perhaps worth noting, but of little consequence in the discussion.
Now if we could find a way to reverse the wave of gross stupidity that has swept (is sweeping) this country. Is it all really the fault of TV and now the internet? I sort of doubt it. Somehow we must understand the underlying cause of the disordered thinking of Brett, the Tea Party, and even understand where Obama picked up his attitudes (I think Cornell West is prettyt close, but…)
politicalfootball: [McConnell’s] attempting to win them over by pointing out that something they care about – the opportunity to damage Obama…
Exactly right.
The oligarchs McConnell serves said “Enough is enough. Raise it.”
As they stand to lose serious money if the US goes into default.
And so McConnell had to come up with something - after the fact - to sell to the tea-barbarians banging at the machinery of empire.
Something that would assuage them to the need for compromise…
The problem of course is that the oligarchs who created the tea-barbarians, no longer can control them.
Nor can McConnell made-to-fit lie pacify them…
I noticed Robert Riech ended a July 15th post with this observation:
I wasn’t so sure that he should be so sure about that faux happy ending.
Not with this brand of anti-government barbarians looking to break furniture, scatter the poor, and famish our empire…
Looks like Reich, in his newest post, isn’t so sanguine anymore either: The Dangerous Hi-Jinks of the GOP’s Juveniles:
We’ve gotten to a point where our Democracy needs a supermajority to do any good thing like cap and trade…
But a handful of freshman Congressman, a superminority if you will, can, despite a Dem President and a Dem Senate, drown the empire in blood red ink…
Truly astounding….
“Now if we could find a way to reverse the wave of gross stupidity that has swept (is sweeping) this country.”
Perhaps allow me to report in from a mostly rural area in Arizona which is predominately Republican. Whether well-off white retired, or downtrodden white oppressed, the people I’m acquainted with are all more or less Teahadis, otherwise they are apolitical (fingers in their ears “centrists”, that is). For the big chunk that is not retired, they have zero job security, little in the way of health insurance, and a robust sense that SOME PRIVILEGED GROUP is screwing them out of what would otherwise be their rightful prosperity.
Now FOX “news” tells them (it’s ubiquitous in public spaces here, like where I get my oil changed[1]) that evil Democrats are conspiring with the bankers to rob them of all their money (and Brett’s guns). The fact that people like Chuck Schumer and apparently Obama with his Republican Fed (see HAMP) and Goldman Sachs Treasury are actually doing that doesn’t help. It is considered impossible that Republicans would hurt the little fellow (after all, they want Brett to buy more guns, and devout Mary Lou shouldn’t be confronted with any disturbing real world facts from her daughter’s (socialist) school).
That’s the atmosphere here. Thinking like your average Teabagger, exactly who would a default hurt? Not the retired, they have Social Security and Medicare, something which they fully paid for already and is completely guaranteed (Republicans say so). Not the downtrodden, they haven’t anything anyway. As far as they see it, the only people that might get hurt are the rich fat cats that put that Kenyan socialist in power.
So frankly my wife and I actually would find a default… interesting. WWII was evidently a deeply effective social democratic teaching moment for a whole continent, at the cost of stupendous waste and destruction. Maybe that is how we humans collectively learn.
[1] I await the pedant who claims that the waiting lounge at the oil change place or the tire shop etc. is not what passes for a public space in rural Amerika.
Bux: “And who among us has a personal line of credit for which we’re allowed to decide on our own to extend the limit?”
Wrong analogy. The debt ceiling is purely self-imposed. If you decide you don’t want to borrow more than a certain amount of money, you can change that on a whim. Conversely, if investors decide to stop lending to the government (for example, because congressional Republicans have made default a strong possibility), there’s not much Congress can do about it in the short term.
Bux, you clearly do NOT agree with me. The false premise I see some Republicans accepting is:
“Balancing the budget, even in the short term, is impossible, so not raising the debt ceiling equals default.”
Now, even if that premise were true, it wouldn’t mean the debt ceiling should be abolished. Because even if balancing the budget were impossible, that doesn’t mean you want to remove all limits on borrowing, there would still be greater or lesser degrees of running a deficit. Our fall as a nation could still be delayed, inevitable doom doesn’t mean you have to rush to your doom.
And the debt ceiling is just about the last veto point in a system which has been deliberately engineered to be biased towards going deeper into debt. The last occasion where Congress is actually forced to consider the extent to which it doesn’t match means and ends. Abolishing it because balancing the budget is hard would be like deciding your own budget looked bad, so you’d simply stop balancing your checkbook to avoid being confronted with how bad it was.
Abolishing it would simply be giving up on ever controlling the deficit. Other nations might get by without a debt ceiling, but that doesn’t mean abolishing it would be without cost. Like a drunk declaring, “Other people manage to avoid going on binges without antibuse, so I’m going to stop taking it!” It would be a serious indicator to our creditors that we’d finally given up on fiscal sanity altogether, and embraced the inevitable end point of uncontrolled borrowing: Default.
Because while not raising the debt ceiling doesn’t mean default, perpetually raising it does, it will lead to our debt eventually becoming so big that default is simply impossible to avoid. If we’re not there already, I mean.
Oh, and what do I see coming of the Republicans actually holding fast on the debt ceiling? The constitutional response, as Tribe relates, is massive unilateral spending cuts by the executive. Those cuts will hurt. They’ll hurt even if they’re not managed, as I expect, to maximize the pain.
The public will be forced to do something we’ve put off for decades; Sit down and decide what’s worth paying for, and what isn’t. To prioritize. And I expect the end result will be some mix of higher taxes and lower spending, as the public decides some of what we’ve been borrowing for is worth the price, and some of it isn’t.
I think that’s a great deal of why there’s so much opposition to this in Washington: Everybody’s afraid their favorite spending program will fall on the wrong side of the chopping block.
Normally I would complain that people and political parties do not have “brands,” and that that ridiculously broad use of the term is irritating, idiotic, and plays into the businessification of everything. However, with the contemporary GOP, it kind of fits.
Er…not ‘with’. Perhaps ‘with respect to’?
Brett, Obama is offering steep cuts to entitlements that are angering the majority of the progressive crowd to no end. I know you troll so you must have read the heated debate here last week. Now, I trust Obama is shrewd enough to understand how much capital he can spend, but it’s certainly not without risk. The right has offered nothing meaningful. They insist entitlements be cut and say no to any increase in revenues. As has been mentioned previously, this is a hostage negotiation, solely to appease the rookie t-bags, and it should blow up like most myopic strategies do. So, when you say “I think that’s a great deal of why there’s so much opposition to this in Washington: Everybody’s afraid their favorite spending program will fall on the wrong side of the chopping block.”, I agree in a way, but remember it’s Obama who desperately wants this deal for 2012, and he has been willing to risk “having things fall on the wrong side of the block” to do it. Republicans do not seem willing to raise taxes or cut any programs tied to their constituencies, so I just have to ask, which of their” favorite programs” have they proposed cuts to? Can you name one that id substantive?
Oh, and some time ago, I told you I’d jump ship if the gov’t ever makes me eat broccoli; same goes with this default nonsense just so long as the repubs don’t blow it up intentionally.
If you’re not being hyperbolic and truly believe default is impossible to avoid now,please read up on debt to gdp ratios as well as the phrase “full faith and credit of the United States”. I think you’ll be surprised at how comfortable investors are holding US debt. Hmmm, I wonder why?
/sorry for any possible formatting issues. This was sent from one of them fancy phones.
politicalfootball says:
“I read McConnell a bit differently than Prof. Kleiman.
McConnell rightly understands that a key part of his constituency is like Brett – indifferent to, or happy about, the economic consequences of failing to raise the debt ceiling.”
I would phrase is as dumbf*ck ignorant about the eonomic consequences of - well, just about everything. Chronically wrong, with no shame whatsoever.
Of course, that assumes that they can go on being fat, dumb and ignorant, without that biting them in the *ss in a way that they can’t rationalize as both being the ‘natural’ results of The Market *and* the fault of Evul Librulz.
“Me”, cuts someday are not cuts, they’re just a bait and switch.
I rise to the defense of Brett Bellmore. He’s no troll. He’s wrong—fabulously, breathtakingly, infuriatingly wrong, most of the time, in my opinion—but he’s generally polite about it and generally stays on topic. These comments would be much less interesting without his disagreement.
On the topic at hand, I think it would be easier to be Mitch McConnell if we had a more sensible system of government. It’s one thing to have checks and balances, it’s another to have multiple obstacles to majority rule. In an ordinary parliamentary system, McConnell wouldn’t have to worry about taking the blame for government, because he’d be in the opposition. Everyone would understand he had no power to do anything other than debate before the bill is passed, and complain after. In this screwball system of ours, he has actual power even though he’s in the minority. (Or, if you prefer, McConnell’s party is the majority party, and they are hamstrung by the Democrats in the Senate, who in a sensible system would be in the opposition.)
We should go to a unicameral legislature at every level of government, and have the Executive chosen by the legislature. Then we could complain about what the government is doing, rather than complain about what they are unable to do.
Because while not raising the debt ceiling doesn’t mean default, perpetually raising it does, it will lead to our debt eventually becoming so big that default is simply impossible to avoid. If we’re not there already, I mean.
Brett, you do understand that the debt ceiling is expressed in nominal dollars, right?
Let me back up a second. You do understand the difference between nominal dollars and real dollars, right?
In some ways I agree with Don about unicameralism. We place far too great an emphasis on electing a President and close to zero when it comes to electing our representatives (local, state & federal). Perhaps if we could only elect our reps they wouldn’t be as (transparently) bought off by business interests. But I’m getting off topic…
Don - I’m glad someone (besides me) appreciates Brett. Most of the time, I feel like he’s the only one here who sees that the Emperor is naked.
J. Michael - Great point which you just did beat me to. There’s default and there’s default. I don’t think actual default is inevitable, regardless of whether a deal is made on the debt ceiling. But programs will have to be defunded and there will have to be significant federal layoffs. This may or may not require that the Nixon era prohibition against impounding be repealed, and I would certainly favor that.
The real issue is that actuarially, we are broke. We can never pay the looming interest on the debt that has piled up if interest rates return to normal, nor can we fulfill the entitlement “guarantees.” This is not somthing that “taxing the rich” makes go away. The only out will be to stiff everybody, and you do that by inflating the currency. That is how technical default will be avoided. But the end result will be as bad or worse - loss of confidence, loss of trust, with retirees, trading partners, lenders, everyone. It is how governments have dealt with this situation since time immemorial. I would have thought we were better, but the irresponsibility of our leadership in Congress and the executive branch, and in particular, the acceleration of deficits in the last few years, shows we are not.
In 2010, the electorate said enough, let’s reverse course. The progressives seem just as determined to complete the task of bankrupting the nation. I’m not sure it’s not already too late, but I am fairly confident that 2012 will make 2010 look like a stroll in the park. Look for the Senate to flip, and quite probably the executive as well.
Redwave72 - in 1946, I believe that we were in worse shape (in real dollars) than now, and interest rates were “more normal.” And we paid it off (albeit with some very high marginal tax rates). If this isn’t true, please correct me- I am not an economist.
As to our current situation, there seem to be two possibilities - we approach it in a Keynesian manner, much as FDR (get people working, if only to rebuild infrastructure, although there seem to be even more ambitious possibilities, e.g. green tech), or to go to austerity, with the guarantee that there isn’t enough money to pay the debt and by reducing spending, making sure that there won’t be enough. Then people start starving.
I don’t get how there is even a choice here.
You say that we can’t possibly pay our debt, but how is starving everyone going to take care of it. Somebody pointed out that just letting the Bush tax cuts expire would reduce the deficit more than all the cuts being considered. Is that wrong? and if so, would you please tell Krugman? He seems misinformed.
In 1946 we had most of the rest of the world’s industry in ruins after WWII. That gave us just a little bit of an edge, I suspect. Similarly, people make comments about how Britain once had a debt over 100% of GDP, and got out of it just fine. And blow off the little matter of an empire…
I’d like to know what our edge over the rest of the world is supposed to be this time.
Well I am entertained by the red doomsayers. Be careful what you wish for…
But do reflect on this. Tax rates are the lowest in 60 years. You’ve had your decade (oops 3 decades, starting with Carter) of deregulation and capital friendly government.
And now, all is doomed.
Thank you for your efforts. But I’m not sure what you have proved, other than your manifest incompetence at both the forward looking thing and the backward looking thing. Hopefully you’ve been well remunerated for the otherwise tedious blindness? A pity otherwise.
Of course, we didn’t really do the gilded age justice, we should have tried for the 1880’s purity with just a bit more effort.
Redwave72: “…but the irresponsibility of our leadership in Congress and the executive branch, and in particular, the acceleration of deficits in the last few years, shows we are not.” [emphasis added]
I find it puzzling that the acceleration over the last few years is particularly troubling. If it was the result of a massive expansion of government bureaucracy I could understand that even if I might not agree. But it was the result of addressing a massive collapse in the economy and putting the war accounts on the books at long last. I’m assuming the concern started somewhere in early 2009, perhaps even late 2008. Now, I would have liked the money to be allocated differently and I certainly think we needed (and still need) to allocate much more than we did. But either way a huge money injection was needed from the government to avert a (more) massive catastrophe. Should we have done nothing? Or just said, “OMG, we’ve got to balance the books!” Amazing.
I find it puzzling that the acceleration over the last few years is particularly troubling.
Indeed. What about the acceleration that occured before Jan. 20, 2009? To be ignored, apparently. What about the “deficits don’t matter” attitude so pervasive among conservatives in the pre-Obama days? If in fact the country goes bankrupt, which would not be a danger if the right had either brains or integrity, the fault will not be the progressives’, but rather the conservatives’, with their willful stupidity and utter dishonesty.
The real issue is that actuarially, we are broke. No, we are not. This is a categorically false assertion.
In 1946 we had most of the rest of the world’s industry in ruins after WWII. Canard. We had an edge to do what, exactly? Our situation viz. the rest of the world in 1946 has nothing to do with “paying our way out of debt” incurred as a result of the war. In fact, with most of the world’s economy prostrate, whose going to buy your stuff?
I’d like to know what our edge over the rest of the world is supposed to be this time. The ‘edge’ is our economy’s ability to produce real goods and services. Despite being muted by our insane politics, that ability has not gone away.
i, too, rise to the defense of brett. he isn’t a troll, he’s a comic genius with a wicked dead-pan.
My guess is this thread is petering out and I don’t have time to answer all the questions anyway, but one I can’t resist is how conservatives feel about the pre-2009 acceleration of debt. And the answer is that we were disgusted then too. Hence the lack of enthusiasm among conservatives in the 2008 election, notwithstanding that the Democratic Congress was at least as responsible as the Bush administation for that increase in debt. The major complaint, voiced on the WSJ editorial page constantly throughtou the Bush era, and by conservatives of all stripes was GWB’s failure to veto a single bill during his first 6 years in office! So Dems spending went unchecked (as indeed did earmarked driven GOP spending), and that plus our military adventures wasted the higher revenues generated by the decent economy (fueled by tax cuts as supply siders predicted).
That 2008 election resulted in Dems achieving filibuster proof majorities that enabled the mess we now have. Conservatives saw the result of their indifference and with independents’ help, reversed course in 2010. My guess is 2012 will amplify the newfound desire for fiscal prudence.
As for Brad’s comment, you have provided two straw men from which I choose neither. There is no reason why fiscal discipline combined with low tax rates can’t get the economy back on track. We are not yet dependent on government spending to feed the population, Obama having not quite achieved progressives’ socialist aspirations. The private economy is more than willing to expand once investors and businessmen have confidence that their assets won’t be confiscated by the government.