Thursday, October 10, 2013

Are The Republicans Sort Of Right About The Debt Ceiling?

No, this is not a Robbie Republican post. And I'm not saying that holding the economy hostage in order to destroy Obamacare is a sound strategy or a goal we should be striving towards. But at the very heart of things, when you get down to it, there is an aggravating factor that's led us down this path, one that nobody has done anything about since the Clinton administration: the insane growth of the national debt and our horribly unbalanced federal budget.

Now, let me be clear. Refusing to raise the debt ceiling does not reduce the national debt. In fact, if the debt ceiling isn't raised, and we default (can't pay our bondholders), then the national debt will actually increase. You don't reduce your credit card debt by refusing to pay your bills, and the government can't reduce it's debt by refusing to pay its bills. We need to borrow, because we have bills to pay, and not enough tax revenue comes in to cover them. If we didn't borrow money, bills don't get paid, our bonds are worth trash, the dollar loses value, and suddenly, the economy takes a tailspin, reducing tax revenues further, because suddenly everyone's out of a job. It's a crazy mess.

This is why we haven't defaulted. This is why we won't EVER default. This is why Boehner and co. are going to agree to raise the debt ceiling again, despite their whole stink about it. Because they realize a default won't do a thing to reduce our debt, and will leave us far, far worse off.

So why the stink every few months? Why the "hostage taking"? Well, at the very least, it's sparking a conversation. And so far, what's come out of that conversation has been positive for Republicans.

As I said back in December, forecasting our nation's future after falling over the "fiscal cliff":
Yes, taxes go up. Yes, defense spending is cut drastically. But both of these issues are temporary, and everyone knows it. It's very, very easy to cut taxes. It's very, very easy to justify defense spending with the global threats America faces. If no deal is struck by January 2nd, taxes will rise and defense budgets will be cut, sure. But by next January 2nd, it's very likely that taxes and defense spending will be restored to somewhere near their current levels.

The other programs? Programs for the poor and middle class? Programs for the arts and sciences? Programs for education? The Democratic desire to restore funding to these initiatives will be met with fierce resistance from the Republican caucus, and the public support behind them will not be strong enough to overcome it.
 Well, folks, we did fall over the fiscal cliff. The sequester did come into effect. And what happened? Exactly what I said would come to pass.  Military and security budgets have slowly been restored, but the other deep cuts, to programs on the Democratic side of the ledger, remain in place.

The debt ceiling threat is not intended to be a threat, because a threat can actually be carried out. What is it then? A protest. A demonstration. It's intended to rally their side in a battle for more cuts to government programs that Republicans hate. One of those programs is Obamacare.

The Republicans are right to protest increasing government debt. In that sense, the debt ceiling holdout, repeated, again and again, keeps the national conversation coming back to the budget. And that alone is not a bad thing. We need a balanced budget. We need to stop owing so much elsewhere. It is time to get something done on that front, after George W. Bush ignored it for 8 years.

Of course, that's where the Republican high ground ends. Because they're unwilling to tackle both sides of the issue--spending AND revenue. You can't just cut government programs suddenly and completely. It'll create a humanitarian disaster within our borders. A single parent family on food stamps won't immediately be able to pick themselves up by their bootstraps-- its not that easy. If it was, they would have done it already. Corporate taxes and the amount millionaires squirrel away are a joke. The rich enjoy enormous benefits of our free, safe, capitalistic society, and unfettered access to the halls of power-- they should pay for that. And I don't mean in the form of campaign contributions. You can't solve the national debt by cutting alone-- the math doesn't add up. It's just like how corporations can't improve their fortunes solely by firing workers or fixing inefficiencies.... eventually, they have to bring in money. The government can't invent the next iPhone... the only way to bring in more money is by raising taxes, preferably on people who will feel the "pain" the least.

So, yay to the Republicans for keeping an eye on the ball, the long term fiscal health of our nation. But unless they start getting realistic, instead of idealistic, we're not going to get anywhere.

Visitor Map: