Tuesday, January 08, 2013

The debt ceiling disaster

Greg Sargent thinks the Republicans' weasel worded threats show they know their position is weak. Clearly, Mitch McConnell refused to be pinned down on the Sunday bobblehead shows this week but the teevee media is still making this about hostage negotiation strategy. They're treating the debt ceiling as if it's just another battle over ideological differences. But this isn't about simple extortion, it's a mass annihilation threat. If the Republicans are allowed to crash the debt ceiling, the entire flipping world is going to get crushed.

Ezra explains in great detail the consequences of the GOP's refusal to pay our debts:
The choices it will face quickly become stark. It can cover interest on the debt, Social Security, Medicare, Medicaid, defense spending, education, food stamps and other low-income transfers, and a handful of other programs, but doing all that will mean defaulting on everything — really, everything — else. The FBI will shut down. The people responsible for tracking down loose nukes will lose their jobs. The prisons won’t operate. The biomedical researchers won’t be funded. The court system will close its doors. The tax refunds won’t go out. The Federal Aviation Administration will go offline. The parks will close. Food safety inspections will cease.

This is the difference between a debt-ceiling shutdown and a government shutdown. As Shai Akabas, a research at the Bipartisan Policy Center, puts it, “in a government shutdown, the government is shutting down future obligations. With the debt ceiling, They’ve already obligated the money. They owe these people the payments now, and they can’t make them.”
And that's just the start. If Republicans are allowed to rescind the full faith and credit of the United States, (on debt they largely ran up themselves) the financial markets would freak out. It would be September 2008 all over again, only worse because, the recovery is still weak -- here and abroad. Failed austerity policies suppressed growth everywhere. Our national deficit would become much worse. Our status as a safe harbor for money would be destroyed as surely as the roller coaster in Seaside Heights, NJ.

[photo via nbcdfw.com]

This isn't just another partisan power play on The Hill. Republicans are threatening a virtual act of economic terrorism. Big media needs to make that much more clear.

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