More bluster from Boehner
House Speaker John Boehner said Monday that an increase in the federal
debt ceiling won't get past him and other Republicans without a whopping $2
trillion in budget cuts to sweeten the deal. He's bluffing, as Jonathan Chait explains: Boehner hopes that by playing tough
on the debt ceiling, he can force President Obama to make a deal that gives
Boehner cover to enact unpopular cuts to Social Security and Medicare.
What Boehner won't do is
actually force the federal government to default on its debt. That would be
catastrophic for the U.S. and global economies, and the Republicans--with the
possible exception of Michelle Bachman--know it. Federal Reserve
that even if the debt ceiling is eventually raised, all the brinksmanship could
cause a lot of economic damage of its own. So far this doesn't appear to be happening, but it could.
Like a lot of economic
subjects, the debt ceiling is easy to exploit politically in part because it
lends itself to voter-friendly analogies that sound great but happen to be
exactly wrong. If your personal finances are out of control, one good solution
might be to cut up all your credit cards. But if the federal government
immediately stopped borrowing money altogether, we would have a nightmare on our hands.
"Just don't borrow any more
money" might sound like a perfectly responsible path--and one that follows
naturally from support for reducing the deficit. But it's important to keep in
mind the difference between a budget deficit and the national debt.
So here's a different analogy:
Let's say the federal government is a car, driving from point A, a debt-free
existence, and just about to reach point B, the debt ceiling. Deficit budgets
keep the car headed in the same direction; a surplus budget would turn it
around. A balanced budget means the car is stopped.
The various deficit-reduction
plans all have us slowing the car gradually to a halt, some less gradually than
others (and, to stretch the analogy, some more insistent than others that the
car's poorest passengers should have to pay for the brake job). The Republican
Study Committee's plan--that's the far-right one, designed not to pass (though
it almost did!) but to make House budget chair
Paul Ryan's draconian proposal look moderate by
comparison--would balance the budget by 2020. Ryan's plan
wouldn't stop the car until 2030.
Refusing to raise the debt ceiling, however,
wouldn't mean coasting or even braking to a halt. It would mean throwing the
car into reverse at highway speed and hoping for the best. It's a ludicrous
idea--but if the driver can convince his passengers that he might really do it,
he can get them to do just about anything to stop him. That's Boehner's
play--and as Chait says,
Obama would do well to call his bluff.