I am really torn about this debt ceiling debate. On one hand, I see a noisy Republican majority in the House who doesn’t care if the government shuts down, a reckless attitude that ignores the impact that this will have of millions of people’s lives. On the other hand, the Fed’s desire to continue raising the debt ceiling has been somewhat callous and ignorant. The sub-text here is that there are two separate debates: one political, one economic. The political debate has been a theater of incompetence; the Daily Show on Monday, July 25th, characterized it with a YouTube video of a skunk with its head stuck in a peanut butter jar. The economic debate has not been very visible at all — carried on in the pages of the Wall Street Journal and the Financial Times.
This fits into a long historical narrative in the United States. Economic decisions are not up for discussion in the public sphere, they are to be made by the men who understand business and commerce. Political decisions — or more accurately, political theater — is for the masses. Let the masses be swept up by the political posturing… Republican vs. Democrat… Tea Party vs. the Liberal Scurge of Washington. Which side are you on, brother? Which side are you on?
This attitude of indifference to politics was shown in a moment of candor from Timothy Geitner (U. S. Secretary of the Treasury). Geitner stated over the weekend that politics were getting in the way of economics. When you look into the deeper assumptions in a statement like that, it is kind of like Calvin Coolidge’s statement in the 1920’s that “the business of America is business.” The belief that any political debate or political decision-making power should impede American commerce is a long-held belief of those who run the financial systems. There is no economic debate to be had. There is no economic counter-narrative to the Fed’s request that we should allow ourselves to take on more debt.
The debate that we do hear is all political, driven by dogma and ideology. In the political debate, I side with the Democrats purely for the belief that the Republican opposition to not raising the debt ceiling ignores the fact that under Bush in the last decade, Republicans used the government credit card to pay for wars in Afghanistan and Iraq, to add an unfunded Medicare prescription drug benefit (arguably a transfer of wealth to Big Pharma), and to fund the Bush tax cuts for the wealthy. This clip from the Daily Show (July 26, 2011) sums it up quite humorously, especially between 0:45 and 1:30.
Boehner: Here is a president asking for the largest debt increase in American history coming on the heels of the most unprecedented spending binge in American history…
Stewart: (interrupting and continuing) …which came on the heels of a financially reckless decade, including unfunded wars in Iraq and Afghanistan, an unfunded trillion dollar medicare prescription bill, tax cuts for the wealthy, which are the largest single policy contributor to our deficit… in fact, I myself voted for all of these.”
The political debate is pure theater, filled with hypocrisy most notably on the Republican side. However, the political theater doesn’t matter much because the economic debate is not being had. Those decisions have already been made. The assumption that we should continue to borrow money for the sake of keeping our economy moving at a pace it cannot maintain — that assumption is not for the rest of us to debate.