DEBT CRISIS 2023 IS DIFFERENT

(Just because I’ve been sick as a damn dog this week doesn’t mean I haven’t been paying attention.)

Things have heated up on the debt ceiling “crisis” since this past Monday, when Treasury Secretary Janet Yellen sent a letter to Speaker In Name Only Kevin McCarthy, warning that the debt ceiling armageddon may be only a month away.

She wrote: “After reviewing recent federal tax receipts, our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time.”

She went on to say that “We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short term borrowing costs for taxpayers, and negatively impact the credit rating of the United States. If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests.”

That date, known as the x-date, was previously thought to be a few more months off, but tax receipts have been “weaker than expected” according to analysis from Moody’s Analytics.

As we are all aware, Democrats want to raise or suspend the debt ceiling cleanly; Republicans are demanding political concessions in exchange for their votes. House Republicans passed a bill last week lifting the limit until March 2024 at the latest, but they proceeded to stuff it full of poison pills for Democrats, including unraveling major pieces of the Inflation Reduction Act.

Republicans have turned what is a procedural vote under Republican presidents into an incredibly high stakes game of chicken under Democratic presdients, when they pretend to worry about the national debt. This time, a party in thrall to the looniest members of its furthest right elements is only more likely to shoot the hostage.

Surprise, surprise, this is - as with nearly everything else Washington deals with these days - a self-inflicted “problem” that is only a problem because 45 years ago in the middle of the otherwise-forgettable Carter Administration - the least of the Democratic administrations of the 20th century - the Justice Department said it was.

Back in 1977, Jimmy Carter’s Justice Department said that government spending can only proceed if all ducks are in a row: (a) congress has to authorize the spending, (b) congress has to appropriate the spending, and (c) congress has to raise the debt limit so that the Treasury can sell bonds. If not (c)? Well, then, the spending cannot take place. Why the Carter Justice Department said this, and why everyone else went along with it, is something that nobody has ever been able to explain. It’s up there with Nixon’s Justice Department declaring in the middle of Watergate that a sitting president cannot be indicted. Neither decision is based on any actual laws, or judicial precedents. The DOJ just declared That’s The Way Things Are and the rest of the proofs that Mark Twain was right back in 1873 when he said “Consider a congressman, then consider an idiot. Bah! I repeat myself” all said “Okey dokey.”

Have you ever had the feeling this country might actually work if the government could ever get out of its own way?

This is one of those times.

This whole thing could actually be solved if someone in Merritt Garland’s Department of Justice wrote a one page memo saying Jimmy Carter’s Justice Department had its head up its ass when it made this determination, and the debt ceiling limit would be constructively repealed.

And Quiverin’ Qevin, Marjorie Traitor Goon and the rest of the Fwee-dumb Kawkuss lunkheads would be on their ass, “sound and fury, signifying nothing.”

But no, we’re now closer than we have ever been to demonstrating to the rest of the world that we are essentially an unserious country too stupid to govern itself as we allow an idiot decision written by one of Jimmy Carter’s collection of southern morons 46 years ago to end up with the country that has the world’s largest economy and the world’s reserve currency on which all economic activity planet-wide depends for organization and stability to come crashing down because we listen to a collection of inbred southern fuckwits who really are as stupid as their accents make them sound, who want to see this happen just because it will make lib’ruls unhappy.

Of course the party that has people who actually understand this is also saddled with the Vichy Democrats who think they are “problem solvers” when in fact they always manage to make whatever they touch turn to shit, fourteen of whom are currently advertising their willingness to surrender ever dinner every night this week while they take their junket with Quiverin’ Qevin, the Speaker In Name Only who’s too stupid to tie his shoes.

And the collection of over-educated, under-intelligent, otherwise-unemployable clowns of the Washington Press Corpse continue to confuse bullshit with knowledge as they treat the situation as a more or less ordinary matter of legislative jockeying and negotiation.

They all miss the real facts of the situation.

The White House’s stance not to negotiate over the debt is not a negotiating position, a position to get political gains from highlighting unpopular Republican demands and the general disorganization and antics of the most extreme members.

The “conventional wisdom,” which is neither conventional nor wisdom, in Washington is that once the White House has made its points, they’ll be forced to come to the table and negotiate a way out of the impasse, that the situation is fundamentally the same as what happened in 2011, the last time the Republican numbskulls decided to play fuck around and find out.

Republicans see it that way. The lesson they took from 2011 is that they threatened the unthinkable and forced Obama to accede to their demands and agree to major budget cuts that played out over the remainder of his term despite the fact that making that mistake led to the first-ever downgrade of the U.S. government’s credit rating and ten years of increased costs and less growth as a result. The dimbulbs of the Fwee-dumb Kawkuss feel confident in their knowledge that they are ignorant enough to be very willing to shoot the hostage if their demands aren’t met. The leading nutcases are actually eager to shoot the hostage for reasons that mix individual personality disorders with group ideology.

Belief that this time they really are completely beyond the bend and are happily willing to shoot the hostage is shared - rightly! - across the political spectrum. It shapes the understanding of everyone in Washington about what’s happening: Republicans are willing to do the unthinkable; since the unthinkable can’t happen, it’s up to the Democratic President to save the country from Repuiblicans. Mittens Rmoney actually complained and blamed the Democrats for not raising the debt ceiling themselves last fall when they could have, without help from the Republicans who would have used to resulting saving of the country as a club to slam Democrats as “big spenders” for having been so responsible.

The Republicans insist that the debt ceiling bill they narrowly passed last week is a good faith effort even though its contents - all obvious non-starters for Democrats - face no likelihood whatsoever of actually ever being accepted by Senate Democrats and the President.

The problem is that most press coverage reflects neither the direness of the situation nor the reality of whose actions are actually threatening default. Most of the stories published in the mainstream media in the last few days have been about House Speaker Kevin McCarthy’s ability to get his plan through the House. The stories before that were largely about why President Joe Biden has not met with McCarthy to negotiate, or when he will hold the meeting. But to treat this as a normal political negotiation, or as one where both sides are equally at fault, is to distort reality. Coverage by the “insider” press in D.C. has mostly been a paean to McCarthy’s adroitness in “winning a one-vote victory and nothing on what was in the bill—nothing about how radical and cynical it is.

On Thursday the nation’s finest fishwrap, er, I mean the New York Times reported the options now faced by Biden, focusing largely on tactics, as if this were a normal and typical negotiation. And as usual blaming Biden for not cooperating because he won’t meet with McCarthy to do the horse trading necessary to reach a deal.

Just to be clear, the proposal the New Confederacy Party passed is beyond radical. Catherine Rampell summarized it well: Under the plan, “most overall nondefense discretionary spending would be slashed by nearly one-third on average in 2024, after adjusting for inflation. The cuts would then expand to roughly 59 percent, on average, by 2033, according to estimates from both the Center on Budget and Policy Priorities and the Center for American Progress.”

The proposal was not passed with any expectation of it becoming law; Quiverin’ Qevin won his “vote” by telling his members nothing in it mattered, since he knows as well as everyone else that the Democratic Senate and the Democratic president would never agree and allow that to happen. It is a complete nonstarter.

I’m old enough to remember how, in 2011, the United States came close to breaching the debt ceiling. House Republican “leaders” Kevin McCarthy and Eric Cantor, with their “Tea Party” loonies, held the debt limit hostage right to the brink, forcing Speaker John Boehner to act to rescue America’s full faith and credit. That heroic action was the beginning of the end of his speakership.

Quiverin’ Qevin, who thought he would become speaker in the aftermath of Boehner’s fall, hasn’t got a tenth of the power Boehner had then. The feral children he leads today make the Tea Party fanatics who got rid of Boehner look like moderates. McCarthy knows full well that it would only take one of the crazies calling for a vote on his speakership, and four or five defections, to doom him.

A hard core of the House extremists would be fine with a default; blowing up government would make the price of economic chaos worth it. The “moderates” think that a default would be blamed more on the president, which makes it a tempting ploy to them.

If the Republicans believe they will not face the consequences for their recklessness, we are far more likely to go over the cliff and into the first default in American history.

What the “common knowledge” misses is that the internal politics of the Democratic Party over the last dozen years has changed what is “expected.”

The central takeaway for President Biden and every other Democrat in the White House and Congress who were around back in 2011 is that Obama’s decision to negotiate was a grave categorical error that can never be repeated. The people who learned that lesson now run the Biden administration. Biden himself is known as one of those people who interpreted the lessons of that drama this way because he played a key role in negotiating the outcome.

In other words, it’s the same dumb GOP, but it’s not the same leadership in the Democratic Party whatever the handwringers in the Vichy Democrats think.

We are likely to hit the crisis with neither side willing to give way.

You cannot negotiate with terrorists. It only encourages more terrorism.

Over this past week, there have been reports that people inside the White House are looking at unilateral moves to end this once and for all. The Fourteenth Amendment prohibition against questioning the national debt was mentioned. Issuing “Consols” paying interest with no end date have been mentioned. The trillion-dollar coin has been mentioned.

Until last night, all of those ideas foundered on the belief that Uber-Traditionalist President Biden was opposed to such radical changes in the way things are done.

Which is why his answer to Stephanie Ruhle in the interview he gave her yesterday, when she asked if the Fourteenth Amendment was being considered as a solution is important.

“I’m not there. Yet.”

In other words, someone has gone back and taken a look at that Carter DOJ decision on the debt ceiling, and asked “Why do we have to listen to this?”

Biden cannot decided he’s going to negotiate after all or perhaps agree to concessions not labeled as negotiations. If he did, the Democratic Party - from the grass roots to Washington - would explode. Doing that after taking the position he has would make any resolution far more complicated, messy and dangerous than anything that happened in 2011.

Joe Biden will always be where the center of gravity of the Democratic Party happens to be. This is how he has governed since he entered the White House as president. “Negotiate with the terrorists” is not where anyone in the party other than Joe Manchin and the House Vichy Democrats are at. Whatever he plans to do has to be kept under wraps until the final moment, adding a huge amount of danger and drama to what takes place.

It’s going to be actual debt default wrapped around the Republican Party’s neck to strangle it, or the administration resorting to one of several extraordinary actions to unilaterally operate above the debt ceiling.

Personally, I have come to the conclusion that the Republicans have outsmarted themselves. What they don’t realize is they are Wile E. Coyote, who has run out to that point beyond the cliff edge, where they are standing on air, just before they look down.

The markets would love to have a good reason to never have to worry about this situation ever again. Yes, it’s a risk to make the change unilaterally, and it will cost extra money to bring the markets along with the decision when it is made. But whatever the cost, it will be less than the cost of kowtowing to the fools, idiots, and morons of the New Confederacy. Pulling the rug out from under Quiverin’ Qevin and declaring the New Confederacy irrelevant will be dangerous, but it will be worth it.

And then wrap the blame for having to do what was done around their necks and strangle them with it in 2024.

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