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.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.