We Need to End The Debt Ceiling Distraction – Now

By Dan Kervick

The debt ceiling standoff is a massive national distraction, as is the rampaging blogospheric discussion of the standoff and its various possible resolutions.   I am convinced that both the White House and Congress are eager to keep the debt ceiling debate and conflict alive to distract the country from a much more important reality: that they are currently negotiating the final shape of an economically punishing and magnificently stupid austerity package that will be substituted in for sequestration cuts due to take effect in March.   The austerity package is Washington’s obsequious response to the disaster capitalism cattle stampede that has been urged on by Pete Peterson, Fix the Debt and affiliated groups of debt hysterics.  Whatever combination of tax increases and spending cuts are finally accepted, the result will be to tie a fiscal cement block amounting to about 1.5% of GDP to the legs of an economy that is barely treading water.

But on the odd chance that the White House is actually serious about bringing a quick end to this standoff, the President should make a curt and frank public statement that plainly calls on Republicans to discipline the incompetents in their increasingly ridiculous party before they humiliate the party even further.   The statement should go something like this.

The wealth of America depends not just on the amazing industry and creativity of the American people, but on the extraordinary reliability of US financial commitments.   The US Dollar is the world’s reserve currency.  Every day, people all over the world accept these dollars for the goods and services Americans buy from our friends abroad.  And every day, people purchase the securities of the United States Treasury as a means of saving US Dollars over time, and of preserving their access to the immensely lucrative US market.  Because the financial instruments of the United States government are so highly valued and respected, the purchasing power of the American people abroad is great.  The word of the United States is thus not just the ensign of our sacred honor, but an instrument for the promotion of the general prosperity.

Our reputation is hard won, and it is a surpassing responsibility of US political leaders to preserve it.   Americans are not deadbeats.  The world knows that.  But there are a few radicals in Congress who toy with deadbeat antics, and who seriously propose to others in their party that they take the radical step of defaulting on the nation’s contractual obligations in order to pursue partisan objectives.   People who propose such stupidities declare their utter incompetence to govern.   Either they are simply ignorant of the ramifications of what they are proposing, or they hate their country so much that they are willing to destroy the wealth and reputation of millions of their countrymen in order to pursue a fanatic agenda.

Only a heedless fool would risk damaging the word of the United States, and undermining the untold contribution that word makes to the prosperity of the American people, for the sake of a standoff over the latest budget battles.  To seek to achieve through blackmail what cannot be achieved through honest dealing is the practice of the coward.  And people willing to sacrifice the nation’s honor to achieve partisan political gains are themselves without honor.

I am persuaded that most of the members of the Republican Party are, whatever our differences, responsible stewards of the nation’s reputation and honor, and so I am utterly confident that the serious leaders of the Republican Party will take whatever steps are necessary to discipline that reckless minority within their own party who are, frankly, endorsing the path of pusillanimous scoundrels.

So confident am I in the ultimate sobriety and integrity of the Party of Lincoln, that I trust no more will ever need to be said about this matter.

Obama should circulate a draft of such a statement to key Republican leaders, and tell them it gets inserted in the Inaugural Address later this month if they don’t shut up about the debt ceiling, and desist in their zealous and insistent compulsion to damage the reputation of the US government at home and abroad.

The statement is admittedly sly and dishonest, because it is not just Republican back-benchers that are making debt ceiling threats, but top Congressional leaders like Mitch McConnell as well.  But Obama needs to hand the GOP leadership a knife, as it were, and tell them to take care of business within their own party or else watch him reduce the GOP to an object of global ridicule as the world watches Obama take the oath for his second term.

With the debt ceiling out of the way,  maybe we can get back to talking about the best way of avoiding the new recession that both parties in Washington seem determined to cause this spring.