Perhaps because I rarely visit Washington, I’m persuaded that the budgetary hostage crisis currently obsessing the nation’s capital holds little fascination for the general public. Wasn’t that what last month’s “fiscal cliff” deal was all about? Government by televised melodrama appears to be losing its ability to hold the nation in thrall.
To start with, there have been too many of the damn things. Promoted for ratings-building purposes by cable news networks, by politicians eager to garner TV face time, and by Pundit-Americans to enhance our own self-importance, these theatrical showdowns have succeeded mainly in undermining respect for democratic institutions.
Too bad, because if President Obama keeps playing his cards right amid Republican bluffing and liberal panic, the outcome of the upcoming debt-ceiling showdown could end up restoring that respect, if only in the sense of reminding everybody of something he said in 2009: elections do, indeed, have consequences. But hold that thought.
We’ve seen this movie before. Most people figure that there will be yet another last-minute deal and a “dramatic” vote in Congress whose outcome is foreordained. Speaker John Boehner will be forced to allow a debt-ceiling vote because there’s no sane alternative, and no evidence Boehner’s crazy.
The bill will likely pass with a minority of responsible Republicans joining Democrats to preserve “the full faith and credit of the United States government” against the prospect of becoming, as the president memorably said in his recent press conference, a “deadbeat nation.”
This time too, Obama’s doing a good job of explaining things in terms almost everybody can understand.
Too professorial by half, he hasn’t always done that.
“These are bills that have already been racked up, and we need to pay them,” Obama said. “So, while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up.
“If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed. We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear materials wouldn’t get their paychecks.
“Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money—every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire…”
“So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. As the Speaker said two years ago, it would be, and I’m quoting Speaker Boehner now, ‘a financial disaster, not only for us, but for the worldwide economy.’”
Over at The Daily Beast, Michael Tomasky noticed even Newt Gingrich making sense: “Everybody’s now talking about, ‘Oh, here comes the debt ceiling.’ I think that’s, frankly, a dead loser…The whole national financial system is going to come into Washington and on television and say: ‘Oh my God, this will be a gigantic heart attack; the entire economy of the world will collapse. You guys will be held responsible.’ And they’ll cave.”
Even conservative thinkers at the National Review have grasped what Obama appears to have understood all along: that “the prospect of default…is not a source of Republican leverage in the debt-ceiling fight; it is the primary source of the Democrats’ leverage.”
Then why have so many liberals been running scared? Watching ordinarily astute observers like New York Times columnist Paul Krugman calling for Obama to resolve the impasse by ordering the Treasury Department to mint a trillion-dollar platinum coin and deposit it with the Federal Reserve has been little short of astonishing.
I mean why not a handful of magic beans, or a trailer-load of Monopoly money?
I’d never argue economics with Krugman. I accept his word that the coin would be a technically legal accounting trick giving the Treasury “enough cash to sidestep the debt ceiling—while doing no economic harm at all.”
Politically, however, such a stunt would have been catastrophic. Millions of Americans genuinely worried about government spending would have been thrown into panic. If people don’t grasp the fallacy of comparing their family finances to the national debt—and it’s clear that most don’t—resorting to legalistic chicanery could only confirm their fears. The hard-won Democratic advantage on fiscal issues would vanish overnight.
Besides, there’s no need. According to Bob Woodward’s The Price of Politics, Republicans hoped to stage this spectacle just before the 2012 elections. Obama’s veto threat stopped them.
So now the president’s got the GOP exactly where he wants them.
It’s just taking everybody a while to figure that out.
Photo credit: AP/Carolyn Kaster