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Playing partisan politics with debt

Robert Reich

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Kai Ryssdal: All was basically quiet on the debt limit front today. Not too much political back and forth over how to manage the national finances. That'll surely change in the weeks to come. We'll be desperate for a break from the politics of government economics.

But in the meantime, commentator Robert Reich wonders why the debate's political in the first place.


Robert Reich: As the government approaches its borrowing limit of $14.3 trillion, Republican and Democratic leaders are jockeying for political advantage over what conditions should be attached to raising that limit.

This is insane. Raising the debt limit should not be subject to party politics.

It's bad enough government shutdowns have become an accepted part of political negotiation. But failure to increase the amount the Treasury can borrow would have far graver results. Not only would the government be unable to issue Social Security or Medicare checks, but the United States couldn't pay interest on its current debt.

We'd go into default. The full faith and credit of the United States would be in jeopardy. Treasury bonds would go into free fall. Interest rates would skyrocket. We, and most of the rest of the world, would fall into financial chaos.

The recovery is still fragile. All this would force us and most of the rest of the world into a deep recession or worse.

No one in their right mind would threaten this, and yet it's talked about as if it's just another aspect of Washington politics that may happen in early July when the Treasury runs out of ways to keep paying our debts.

In fact, it's a giant game of highway chicken, and if one driver doesn't yield, the crash will be catastrophic.

Games of chicken are won by drivers able to convince their opponents they won't swerve. That gives a strategic advantage to Republicans backed by the so-called Tea Party, who are so convinced government is evil they've signaled they'd be willing to risk it all.

But this shouldn't be a matter of political strategy. Disagreement about the nation's budget should be worked out through the constitutional process of majority votes in Congress, followed by the president's signature or veto, and Congress's right to override the veto.

No group of legislators is entitled to threaten to crash the United States economy if its demands aren't met.

Where are the leaders of Wall Street? Where are the corporate statesmen? They all have as much, if not more, to lose as anyone. They should insist this game of chicken be called off.


Ryssdal: Robert Reich was Secretary of Labor for President Clinton. His most recent book is called, "Aftershock: The Next Economy and America's Future." David Frum is up in the rotation next week. Send us your comments sometime before that, please -- click on this contact link.

About the author

Robert Reich is chancellor's professor of public policy at the University of California, Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton.

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gb gb's picture
gb gb - Apr 20, 2011

Where are the leaders of Wall Street? Where are the corporate statesmen?

Do they exist?

Jonathan Lovelace's picture
Jonathan Lovelace - Apr 20, 2011

It is an outright lie to say that if we don't raise the debt limit the Treasury would default. If an individual reaches his credit limit, that doesn't mean he immediately stops making his mortgage or even credit card payments; it just means that he can't go out on any more spending sprees. And the solution isn't to ask the credit card company to increase the limit; stopping the spending is what *should* happen.

Anthony St. John's picture
Anthony St. John - Apr 20, 2011

Very good case study summary of Washington's state of chaos Prof. Reich.

You ask, where are the leaders and statesmen? The obvious answer is that we have none.

The fact is that all of our institutions have now failed to protect the U.S. Constitution, the Rule of Law, morality, civil rights, social contract, public education, healthcare, social security, the increasing number of poor along with the destruction of the middle class, and increasingly most important, our ability to save our environment and quality of life for future generations.

The real problem is that special interests control America, and they are even willing to create chaos to maximize their wealth and power, taking advantage of America's vacuum of leadership and statesmen.

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