Friday, August 6, 2021

Why Are The Repukes Again Playing 'Chicken' With The Debt Ceiling?

 "Senate Minority Leader Mitch McConnell said on Wednesday that he does not expect members of his party to support a measure authorizing the government to borrow the money it will need to meet its obligations later this year."  - The Hill, yesterday

When I read in the most recent issue of The New York Review of Books (p. 34)  that Dan Drezner (an international relations scholar) had likened the GOP to the terrorist group Hezbollah,  I could easily believe it.  Especially given the GOP has ceased to be a viable, functional party but is now a power-driven fascist cult.  At every turn these misfits have militated against the common good and general welfare, from spreading their Covid lies, to support of extremist militias, to enabling Trump's fascist phantasmagorias.

To be concise:  if it walks like a terrorist, talks like a terrorist and acts like one then it must indeed be a terrorist.  We can cite the insurrection and sedition of January 6th, and the (recently revealed)  traitor Jeffrey Clark's effort to overturn the general election, to the latest sly provocations involving the debt  ceiling.  Specifically,  threatening to not increase it to pay existing debts - thereby seeking to destabilize the economy at a most critical time.

 Contrary to widely circulated myths a debt-ceiling increase does not authorize new spending; it just raises the arbitrary cap on how much the government can borrow to pay off bills to which it has already committed. Given that Congress generally spends more than it collects in revenue, it must allow the Treasury to borrow money to make up the difference. If Treasury can’t borrow a lot of bad stuff happens which is where the GOP terror enters.

For starters, Uncle Sam would have trouble paying military and civilian salaries, Social Security benefits, government contractors, domestic and international creditors, and almost every other bill already racked up. If we default on these IOUs, even briefly, that not only hurts those denied their promised payments. it also makes it more expensive for the government to borrow going forward.  Since GOP fiscal hawks are always yapping about "saddling our great grand kids with paying huge interest on the debt" it's kind of choice they'd stoop to making it even worse.  But they would because they're fiscal terrorists.

But the terror doesn't stop there. A U.S. default could trigger a worldwide financial crisis, possibly a depression. That’s because financial markets currently treat U.S. debt as the safest of assets, with all other assets around the world benchmarked against us. Our default would send waves of financial panic cascading through lots of other markets, too.   

How can I be so sure the Repukes would act in such a contrary, despicable, short-sighted manner?  Well, because they already have when Obama was president. During the Obama presidency, Republicans repeatedly held the debt limit hostage. The 2011 debt-limit showdown led the credit rating agency Standard & Poor’s to downgrade the country’s perfect credit rating for the first time, saying that “political brinkmanship” over paying our bills revealed U.S. governance and finances to be “less stable, less effective and less predictable” than previously believed."  as Republican lawmakers in recent weeks expressed opposition to raising the borrowing limit.

We're on that same parlous track again - like we are with a huge new fall Covid surge- thanks to the 'pukes.  This is especially as Republican lawmakers in recent weeks expressed firm opposition to raising the borrowing limit.   Anticipating a crunch, the Treasury Department will suspend reinvestments by a number of retirement funds for civil servants and postal workers starting Monday. This according to a letter  Janet Yellen just sent to congressional leaders. The suspended funds will be made whole once the debt limit is either suspended or increased, she said. Adding:  "I respectfully urge Congress to protect the full faith and credit of the United States by acting as soon as possible."

Congress voted in July 2019 to suspend the debt limit until July 31, 2021, after which the prior limit of $22 trillion would be reset to include any new borrowing in the intervening years. On Sunday, the limit was reinstated at around $28.5 trillion, a figure that includes debt held by the public and by government agencies.  Almost certainly, given the Trump-GOP $2 trillion tax cuts, then Covid-related spending with the American Rescue Plan,  CARES Act etc. that new ceiling will soon be blown past.  Indeed, The Congressional Budget Office said last month that the federal government could run out of cash to pay its bills in October or November.

Hopefully, Ms. Yellen's emergency measures will help while the GOP ponders its next move.  Let us hope it's not as outrageous as the sedition the Repukes displayed on January 6th.  In the meantime, the Dems - having a slim majority - need to be prepared to raise the debt limit on their own. using the process of budget reconciliation.  In Mitch "bin Laden's" own words:  

"I don’t think there’s a single Republican senator who views increasing the debt limit so that Democrats can expand government and spend massive amounts as something they in the end would want to support.”

Thanks for that heads up, Mitch!  Now we know we can't count on your Hezbollah-like faction to help save the nation when needed!

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