[Peter Goldmark] GOP playing with fire on debt ceiling

There they go again.

The Republicans in the House of Representatives are acting like jackasses. And they’re doing it on the critical issue of the debt ceiling, which could undermine confidence in the United States around the world if it is mishandled.

The Republican-dominated House of Representatives recently said they would refuse to raise the national debt limit unless their draconian spending cuts were instituted. In politics, this is called “taking a hostage.” In this case, they’re trying to take the whole economy and the foundation of the financial system hostage.

There’s a lot that’s deeply wrong with this posturing. First, you don’t play threat games with something as serious as the full faith and credit of the U.S. government. Second, at the present moment our government is politically divided, and the responsible course is to work toward practical compromise on the debt and budget issues, not destabilizing grandstand plays.

Third, the Alice-in-Wonderland gyrations the Republicans went through signal to the world that what they put forward was farce. They introduced a motion so that they could vote against it. Then they telephoned financial leaders and said, “We don’t really mean it, don’t worry.” This is low-grade vaudeville, not thoughtful policy.

Fourth, threatening to stop the orderly operations of government is like pointing a pistol at your own head and saying: If you don’t do what I say, I’m going to shoot myself ― and all of the rest of you, too. It may be raw meat for some of the extremists back home. But for the rest of the world, it’s a chilling message that there is a dangerous and unreliable group of crackpots loose who don’t understand how the financial system operates. Observers of the United States around the world understand fully that these johnny-come-lately fiscal hawks are the people who gave us the reckless tax cuts and unfinanced Medicare programs that exacerbated our fiscal problems in the first place.

Here is the brutal reality the wiseguys in the House don’t seem to get.

When vital services and paychecks are interrupted, then the political pressure on the system shoots up to boiling level. And that’s when somebody says: Hey, why are we paying all these fat cats who own the bonds rather than paying average folks the Social Security checks or veterans benefits we owe them? This is not a good conversation to have; it will cost the United States dearly and shake confidence in both the dollar and our political system, even if at the eleventh hour the crisis is somehow defused. Banks and other institutions that lend us money do not like Wagnerian operas whose outcomes are not clear in advance. There’s already more than enough doubt about the value of the dollar and the ability of the U.S. government to act responsibly to keep it strong and sound; the last thing we need is to add fuel to that fire.

Of course, the right answer in the long run is to get the budget deficit under control and not have to borrow so much. Breaking our fatal addiction to imported oil would help. But that’s a multiyear task with some tough medicine along the way, almost certainly including some sort of tax increase, and neither the Republicans nor anyone else seems up to proposing ― let alone taking ― any tough medicine yet. As we have that debate and try to forge a bipartisan path back out of the swamp of fiscal miasma toward financial responsibility, the last thing we should be doing is triggering a debt crisis. To do that is a demonstration of irresponsibility, and the world will see it for what it is.

By Peter Goldmark

Peter Goldmark, a former publisher of the International Herald Tribune, headed the climate program at the Environmental Defense Fund. ― Ed.

(Newsday)

(McClatchy-Tribune Information Services)