The idea of reducing something unwanted, or unpleasant, to the smallest possible amount or degree is a ploy to fool observers into believing there are no detrimental consequences for making bad decisions. Over the past week Republicans have spent a fair amount of time and energy minimizing the damage of their deliberate government shutdown in spite of the harmful impact on the government and the people it exists to serve. It makes sense for Republicans to pretend their actions are not affecting millions of Americans, but it does not assuage the damage their well-planned shutdown are having on the economy or the American people. Over the past few days, to prepare Americans for their plan to default on the nation’s debt obligations, Republicans have made a concerted effort to minimize the inherent economic damage failing to raise the nation’s borrowing limit will have on Americans, but their arguments fly in the face of rational thought and most of the world’s economic experts predicting an American default will have immeasurable detrimental effects on world financial systems.
According to real economic experts, if the world’s largest borrower fails to pay its debts, an unprecedented event in modern history, it will devastate stock markets around the world, halt a $5 trillion lending mechanism that will blow up borrowing costs for billions of people and companies, ravage the dollar, and throw world economies into a recession and probable depression. The experts, money managers, economists, bankers, traders, and former government officials consider a Republican credit default will be nothing short of financial apocalypse. However, in their economic wisdom, House Republicans have convinced themselves and a majority of their supporters that a catastrophic credit default is an Obama Administration over-hyped crisis to frighten Americans into opposing extremist Republicans and their lust to crater the economy.
The Republican idea that warnings about exceeding the debt limit is a scare tactic incited Senator Pat Toomey (R-PA) to introduce the “Full Faith and Credit Act” in 2011 that would “require the government to prioritize public debt obligations” in case Republicans failed to raise the debt ceiling. The Republican intent was to reveal the Obama Administration’s dirty tricks and fear-mongering for claiming hitting the debt limit meant defaulting on the nation’s debt in case Republicans balked at paying the nation’s bills. Over two years later Republicans are again claiming that if the nation hits the debt limit President Obama can move money around and tell investors he will use incoming revenue to pay for debt service and the military much like they claim the President could reopen parts of the government if he wanted to. Republicans hope Americans will forget that all appropriations have to originate in the Republican-controlled House because their intent is causing a credit default at the urging of the House teabagger caucus and Republican voters.
According to Pat Toomey, the President is attempting to bully and frighten Republicans into raising the debt limit unnecessarily because, as Republicans see it, President Obama could finance the debt and “keep old people alive unless he is so vindictive he chooses to withhold Social Security checks” or lay off staff that processes retirement checks on time to make a default as painful for the people as possible. A former Bush administration Treasury official said that “If we miss an interest payment, that would blow Lehman out of the water,” referring to the devastating consequences of Lehman Brothers’ collapse that tanked the world’s economy in 2008. The former official, Tim Bitsberger, said that “Lehman was an isolated company, and now we are talking about the U.S. government,” but since House Republicans claim to know more about the economy than real financial experts, they are following teabagger economists who are anxious to default on the debt “just to see what will happen.”
Republican voters think that what will happen is minimal, if any, damage to the economy and 54% of them believe America could breach the debt limit “without major problems.” One House Republican, Ted Yoho, a teabagger from Florida chillingly declared that a credit default “would bring stability to the world markets” because the United States had moved to curb its debt.” Yoho has no clue what the debt ceiling means and therein lies a major part of this nation’s problem, but other Republicans comprehend that Republicans are flirting with disaster.
Another former Bush Treasury official said of Republican’s blowing off the damage of a default, “It’s mind-boggling. I don’t know what to say. Every member of Congress should know this. These aren’t complicated concepts.” However, they are complicated enough for teabaggers that it prompted two of Republicans’ staunchest supporters, the U.S. Chamber of Commerce and Goldman Sachs CEO Lloyd Blankfein, to reiterate the President’s warning and urge Republicans to pass the debt ceiling increase soon to “avoid substantial and enduring damage” to the economy.
It is likely that the Chamber and Wall Street executives see the direction Republicans are taking the nations’ economy and are mortified at the real prospect Republicans will let the nation go into default. Representative Joe Barton (R-TX) fueled fears Republicans will fail to raise the debt limit when he said, “we don’t have to pay every bill the day it comes in,” and it is precisely the attitude that prompted credit rating agency S&P to downgrade the nation’s credit score in 2011. Republicans just cannot bring it on themselves to see the catastrophic effects of a nation like America defaulting on its debt and it is why they are minimizing the devastation by promoting their Full Faith and Credit Act to prioritize government payments.
Despite the preponderance of evidence, and a world of financial experts’ warnings, Republicans are certain a national default is nothing to fear and might even be good for America and world markets. They are as memory-challenged as they are economic imbeciles because during the last debt ceiling crisis the country’s credit rating was lowered, a million jobs were lost, and $18.9 billion was added to the deficit Republicans claim is out of control. Republican leadership is sending mixed messages about their opposition to letting the nation default when they demand concessions from the President or they will not raise the debt ceiling. There are plenty of Republicans backing up Boehner’s demand that President Obama pay a ransom in exchange for a debt limit increase and likely they are the House Republicans committed to a default whether the Affordable Care Act is scuttled or not.
Obviously, there are business and Wall Street leaders who are worried Republicans will cause a default or two of their biggest names would not take the unprecedented step of warning House Republicans to stop their games and raise the debt limit. However, Republicans cannot be bothered with informed advice from their staunch allies in business and Wall Street because they know more about the economy and high finance than worldwide financial experts, former Bush Treasury officials, President Obama, the U.S. Chamber of Commerce, and one or two sane Republicans. One cannot help but think though, that although teabaggers in the House are too ignorant to comprehend the debt ceiling that is not that complicated, it is worth remembering that on Inauguration Night in 2009, Republicans met in private to plot against America’s economic recovery and really; what better way to finish what they started over four-and-a-half years ago than cause economic apocalypse and a worldwide depression with a default?