Douglas Holtz-Eakin, the right’s go-to economist, gives us a hint:
“The first thing you’ll see is a market reaction. Then you’ve got dramatic impacts on consumer confidence, the world’s melting down again and they go into an economic fetal position…there’s just no good news there…. You open a hornet’s nest of nightmares and difficulties for the Treasury, literally, which legal promises on either debt or programs are you going to break?”
The responsible thing to do would be to solve the problem, just as Congress and the White House have done for a couple of hundred years now. John Boehner is reportedly trying to do just that, but as a lameduck speaker his ability to cut a deal and deliver the votes is suspect at best. And what’s remarkable is the fact that this was once considered a little bit of routine bookkeeping duty — if the debt ceiling isn’t raised, the U.S. government can’t legally pay its bills. So the ceiling was raised seven times under President George W. Bush, and a whopping 18 times under President Reagan. In fact, under the conservative hero Reagan the debt ceiling more than tripled, from $935 billion when he took office to $3.12 trillion when he left.
These days, though, important elements of the Republican Party are gripped by the notion that the debt ceiling gives them leverage, in the same sense that a bad guy threatening your children can be said to have leverage. “Give us what we want,” they’re basically saying, “or something bad may happen to this little economy of yours.” Hundreds of thousands of jobs, the nation’s credit rating, the stock market …
U.S. Rep. Mick Mulvaney, a conservative Republican from South Carolina, proudly described the mindset this way: “I’ll play chicken with you every time. You think I am crazy, and I know you are not.”
Along those lines, Senate Majority Leader Mitch McConnell is reportedly demanding that President Obama agree to major reductions in Medicare and Social Security, such as changes in cost-of-living adjustments, as well as provisions handcuffing the Environmental Protection Agency. That’s his price. No one knows what the leadership of the House is likely to demand, because no one knows who the leadership of the House might be. And most of the Republican presidential field is pushing hard for a confrontation as well. The notable exception might be the hapless Ben Carson, who is still waiting for someone to explain to him what the debt ceiling even is.
I’m tempted to say I’ve never seen anything like it, but I would be wrong: