Republicans are playing chicken with American prosperity. The stakes could not be higher. Most Americans see this as another pawn in the endless jostling between politic factions, but it is not. It stands to reverse the expensive and tentative recovery which we are only beginning to enjoy and throw the American economy into a crisis similar to that of Greece relative to the European Community:
May 14 (Bloomberg) — U.S. Treasury Secretary Timothy F. Geithner said a default arising from failing to raise the debt limit could cause “irrevocable damage” to the economy, risk a “double-dip” recession and increase unemployment.“Default would not only increase borrowing costs for the federal government, but also for families, businesses and local governments — reducing investment and job creation throughout the economy,” Geithner said in a letter dated yesterday to Senator Michael Bennet, a Colorado Democrat.
Failing to raise the $14.29 trillion debt ceiling would “force the United States to default” on obligations such as payments to service members, citizens, investors and businesses, Geithner wrote. “This would be an unprecedented event in American history. A default would inflict catastrophic, far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment.”
Ian Katz and Daniel Enoch – Geithner Says Damage From Debt Default May Be ‘Irrevocable’ Bloomberg 14 May 11
Republicans seem intent to use this opportunity for a Norquist-style drowning of the economy, which they can then blame on the incumbent administration in the run-up to a desperate presidential election cycle. Is this the party of patriots or economic suicide-bombers?
The rhetoric of Congressional Republicans seems no better than that of drunken adolescents on a country road late at night:
U.S. Senator Marco Rubio, a Florida Republican, has said he won’t approve a debt-limit increase without a range of tax-and- spending reforms.“We need to use the debt limit itself as the way to ensure that America’s debt limit begins to decline, not always go up,” Rubio said in a March 29 television interview with Fox News. “How about the debt limit starting to go down? These are the kinds of things that I hope we’ll focus on.”
Rebecca Christie and Dawn Kopecki – Jamie Dimon Says Debt Default by U.S. Would Be ‘Catastrophic’ Bloomberg 31 March 11
Believe me folks, this is serious. We are like hostages on a bus with a bunch of ideologically motivated suicide-bombers disguised as the Republican party. The Chamber of Commerce as hostage negotiator:
The U.S. Chamber of Commerce waded into the fight over increasing the government’s borrowing limit on Friday by urging members of Congress to raise the debt ceiling “as expeditiously as possible.”The business community’s chief lobby in Washington made the case in a letter to lawmakers signed by Bruce Josten, the group’s head of government affairs, arguing that failure to pass legislation authorizing an increase in borrowing by Aug. 4 “would create uncertainty and fear, and threaten the credit rating of the United States.”
Patrick O’Connor – Chamber Urges Lawmakers to Raise Debt Limit ‘Expeditiously’ WSJ 13 May 11
Even Right hawks like Charles Krauthammer have gone on record, “You can’t not pass it. It is catastrophic. It means American debt is in question. It can’t happen…” And yet we are playing this game. At times like this is it worth looking at the ructions created between the Republican Congressional cohort and their better angels:
Default would be the single most irresponsible thing the United States of America could possibly do. America’s debt has been paid in full and on time since 1789. To cast away that record even in a genuine financial emergency would be a terrifying action. To cast away that record to score a political point? Reckless almost beyond description.I always assumed that the first American political party to contemplate default as a way to achieve its political goals would be the Communist Party of the USA, not the GOP. I’m going to tell myself that it’s all just a bluff, and that Boehner is talking wild as a prelude to lowering the boom on the Tea Party. But wild talk has a way of generating its own momentum – and leading to wild results.
The GOP wants to push for a budget deal? That would be welcome.
But what this default talk looks like is that the GOP wants a crisis, not a deal. A deal would involve real pain for real voters: Medicare reductions, farm spending reductions, military reductions, and revenue measures. A crisis creates an exciting substitute for such a deal – especially if the GOP can temporarily and delusively convince itself that it can pin the blame for the crisis on President Obama. That will not be true.
David Frum – Stop Flirting with Debt Disaster Frum Forum 14 May 11
Well said. So we’ve been cowering from terrorism all these years only to find the same motivations right here at home. Burn down the house for an ideological virtue of dubious worth. God save us from the Republicans on this Quixotic and self-destructive mission. They created this crisis, right? Well for pity’s sake let’s keep their hands off our economy until we get it back to rights.
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