A small murder of crows is arguing loudly this morning. And the robins and
the cardinals are weighing in: chu,chu,chu,chu,chu,chu,chu,chu; shweet,
chi,chi,chi,chi,chi. They make about as much sense as the GOP in discussing
lifting the ceiling, probably more.
I know this blog is supposed to be about peace and politics, but if peace
refers not only to the absence of conflict but also to the arc of the universe bending
toward justice, then the debt ceiling negotiations are squarely about both peace and
politics. And stupidity.
The debt ceiling is an absurd concept. Congress passes a budget which calls
for government spending, including Social Security, Medicare and Veterans
benefits, not to mention out of control Pentagon spending. As with most businesses
that use credit lines, the government borrows money, such as Treasury Department
bonds, which need to be repaid. At the same time, Congress also passes a debt
ceiling, limiting how much debt the country can incur, despite authorizing
spending that will probably exceed the debt limit. In what universe does this make
sense, especially when you consider Section 5 of the 14 th Amendment that provides
that the validity of debts of the United States shall not be questioned. So from the
beginning we are behind the eight ball.
The debt ceiling wasn’t imposed until 1917, when its purpose was to allow
the Treasury Department to issue bonds to finance WWI without going to
Congress. Since 1960, Congress has raised the debt ceiling 78 times, 49 times
under Republican Presidents and 29 times under Democratic Presidents.
https://time.com/6281003/debt-ceiling-history/. In fact, during Pres. Trump’s
administration, Republicans voted to raise the debt ceiling three times. Only in
2019 did the debt ceiling increase include modest “offsets” that would not take
effect until 2027, if at all. https://www.newsweek.com/fact-check-did-donald-
trump-lift-debt-ceiling-no-spending-cuts-1797134. Moreover, the Republican
blather about out of control spending conveniently ignores that a significant, if not
majority, portion of deficit spending results from the tax cuts the Republican
majority enacted under former Presidents Bush and Trump that favored wealthy
folks and large corporations: “Bush and Trump tax cuts for the wealthy and
corporations have driven recent and projected federal deficits. They have been the
largest driver of deficits over the past two decades and account for 57% of the
increase in the debt-to-GDP ratio since 2001.” Even more eye opening is that
current Republican plans to extend the Trump tax cuts would add $3.5 trillion to
the deficit over the next 10 years.
https://www.budget.senate.gov/chairman/newsroom/press/extending-trump-tax-
cuts-would-add-35-trillion-to-the-deficit-according-to-cbo.
Moving on from Republican extreme hypocrisy over the mechanics of the
debt and lifting the debt ceiling, the GOPO seems oblivious to the catastrophic
consequence of failing to raise the debt ceiling. First, social security recipients,
veterans and Medicaid and Medicare recipients would be hurt. But even Fortune
magazine, hardly a liberal bastion, predicts not only a US recession if there is a
default, but also serious global economic effects:
Feeding the anxiety is the fact that so much financial activity
hinges on confidence that America will always pay its financial
obligations. Its debt, long viewed as an ultra-safe asset, is a
foundation of global commerce, built on decades of trust in the
United States. A default could shatter the $24 trillion market for
Treasury debt, cause financial markets to freeze up and ignite an
international crisis.
“A debt default would be a cataclysmic event, with an
unpredictable but probably dramatic fallout on U.S. and global
financial markets,” said Eswar Prasad, professor of trade policy
at Cornell University and senior fellow at the Brookings
Institution.
https://fortune.com/2023/05/22/how-bad-global-recession-economy-debt-
ceiling-default-no-corner-spared/. In other words, a U.S. default would
increase global instability at a time when there is a stalemate in the Ukraine-
Russia war, Somalia is in turmoil and here in the U.S. the partisan divisions
are so deep that voting limitations, book banning, legislative constraints on
health care options for women and LGBTQ persons, and random gun
violence are prevalent. Add to this the fact that U.S. unemployment is at an
all time low, especially Black unemployment, and inflation is dropping.
https://www.nytimes.com/2023/04/14/business/economy/economy-jobs-
inflation-recession.html. Clearly, a default would put this economic progress
at risk.
So why are Republicans so willing to try to extort deep spending cuts
to social programs, while leaving the bloated military budget alone, at the
expense of the economic welfare of not only the Americans they pretend to
serve, but also much of the rest of the world? Sadly, the only possible answer
is that the extreme right-wing portion of the GOP House must believe that a
default and the economic turmoil that follows would be laid at President
Biden’s feet, and provide a benefit to the GOP in 2024 elections. In other
words, the American people be damned.
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