Debt ceiling fight is an old movie
The villain has tied the damsel to the train track. The speeding steam engine is bearing down. The hero seems a long distance away. Oh horrors! Tragedy seems inevitable. But no. The hero arrives in the nick-of-time … unties the damsel and removes her from the tracks just as the Iron Horse goes speeding by. Tragedy averted.
So it is with the Debt Ceiling. To make this work in the political world, we must first exaggerate the danger. If the Debt Ceiling is not increased, Democrats and the media would have you believe that the entire American economy would instantly collapse. Oh horrors!
But that is a gross exaggeration. There may be some temporary impact on the stock market, but most of the rest of the economy would still be moving along. People, institutions and other nations would still be buying American debt because they know that Americans will not really default.
But we do not even have to debate whether the initial response to a failure to increase the Debt Ceiling would be slightly disruptive or catastrophic because that is not going to happen. At the last minute, Congress will increase the Debt Ceiling – but only after they use the interim period to play the partisan blame game. Who will get blamed for the dramatized economic disaster that does not happen?
For the most part, Senate Minority Leader Mitch McConnell will likely win the blame game. Why, you ask?
Initially, because he is drawing attention to the Democrat’s propensity to spend too much of the taxpayers’ money. They can point out that some of the debt that has occurred is the spending of the Trump administration. That is technically true, but that spending was happily approved by congressional Democrats and much of it was due to the Covid Pandemic. And I do believe that Trump and the Democrats spent too much on the stimulus packages and the unemployment compensation.
Democrats are in a bind. They have control of the Senate, the House and the presidency. They do not need a single vote from Republicans to increase the Debt Ceiling. Refusing or delaying the vote to increase the Debt Ceiling is on the Democrats. They only want GOP votes for political cover.
The need to raise the Debt Ceiling does not only involve the Trump administration. There are billions of dollars of new spending passed by the Biden administration. There are old debts incurred before Trump.
And contrary to Democrat claims, raising the Debt Ceiling does have an impact on future spending – those obnoxious trillions of dollars that Biden and the Democrats want to pile on the back of the American taxpayer. They are literally creating a floor that will require a future increase in the Debt Ceiling – another avoidable crisis..
Yes … Biden says his Infrastructure Bill and the Reconciliation Bill have no cost, that is a bald-faced lie. Taxes on the super-rich will cover a small portion of the cost – but not all of it. Furthermore, the corporate tax will be passed on to the consumer – all of us who buy anything. In fact, nonpartisan and even liberal tax monitoring organizations say that the middle class and the lower class will pay 70 percent of the costs of the Biden “Build Back Bad-er” scheme.
We know that Biden is lying about covering all the costs because the Reconciliation Bill has not even been written. No one knows what will finally be in it – much less the cost. Biden is just heating up the planet with more hot air.
There are three options – (A) Republicans provide the necessary votes to reach 60, (B) Senate rules are changed to get rid of the filibuster or (C) Democrats use reconciliation to do it on their own – as McConnell says. If you picked (C), you are probably correct.
The periodic Debt Ceiling “crisis” is as much in America’s future as it is in the past. McConnell wins on this one because generally the American voters do not like raising the Debt Ceiling. It is a reminder that those folks in Washington are still spending too much … and taxing too much.
So, there ‘tis.