As a sports fan who finds baseball about interesting as watching paint dry on growing grass, I’m so happy to see that the United States has found itself a new national pastime, which we can call “debt chicken.”
Forget the fact that you cannot find an economist who thinks sucking billions of dollars out of a fragile economy right now is a good idea. Forget that this debt-ceiling debacle has likely permanently damaged the U.S. as the premier economic power and will force the rest of the world to go in search (even faster) of an alternative to the dollar. Forget that even while defense spending will take a much-deserved hit, much of the deficit reduction will be born on the backs of the unemployed, as well as already cash-strapped state and local governments.
The endgame of this entire mess will be this: holding the world economy hostage works.
Maybe you can blame President Obama for not asking for the debt-ceiling increase back when he was fighting with congress over the Bush tax cuts. I’m guessing historians, when having to point to the greatest flaw of the Obama presidency, will single out his continuous underestimation of the nihilism, arrogance and outright hostility of the opposition party. Many think he could have tied the debt-ceiling to the Bush tax cuts fight, and that was a game of chicken that–worse comes to worse–taxes go up mostly on the rich. Boo-f***ing-hoo.
But that’s not what happened. Obama took “Speaker Boehner at his word” and the right-wing of the Republican party “acted like terrorists” in the words of Veep Joe Biden. And they won. This opens a Pandora’s Box that will be extremely difficult for future presidents and congresses to close.
Think about it like this: the Republican party has now swung so far to the economic right that they have a strong contingent that actually thought it would be good policy to have the U.S. default on its debt. Basically President Obama was driving a school bus full of screaming children (us) at a semi-truck loaded down with tanks of gasoline and a driver who’d jammed the gas pedal to the floor and ripped off the steering wheel.
How easy will it be for a kamikaze right-wing faction to extract future concessions? All they have to do is control a small fraction of the tempestuous House. So Obama wins this round (by which I don’t mean he “wins” in the normal sense of victory but that he doesn’t preside over a worldwide economic cataclysm). Now imagine he gets reelected in 2012, but the Republicans take the Senate (as they probably will given the number of Democrats up for reelection) and maintain even tepid control over the House (which they probably will, given their numbers).
What exactly is to stop them from doing this again, extracting pound after pound of flesh, until we’re living in a “Banana Republic,” (as Krugman put it) which at times, appears to be their endgame? Gutting the EPA, abolishing the Department of Education, privatizing social security–these are long-held passions of the American Right that suddenly become attainable goals now that they understand all they have to do is take the economy hostage.
It could quickly become the world’s new most-anticipated, most horrifying spectator sport.