We are on the verge of default. Seriously. Somebody alert the media. Oh, they know? OK, then somebody get the lifeboats.
This isn’t some fake apocalypse. This is potentially the real thing — as real as, say, a Herman Cain candidacy, anyway.
On or about Aug. 2, we won’t have enough money to pay our debts and we’ll have to do something, like either raise the debt ceiling, as we’ve always done before, or maybe sell the Grand Canyon, although I’m not sure what you can get for a big hole in this real estate market. If we don’t do something, we won’t have the money to pay all our bills.
Many people assume this is the usual Washington hyperbole. I don’t blame them. Why should anyone believe we’re really on the verge of default when we have politicians going on TV every day saying we’re on the verge of bankruptcy when everyone knows that, despite being $14 trillion in debt, we’re not?
We could spend less. Or we could raise revenue. Or we could sell the Grand Canyon. Or we could do some combination of the above, although that would require some form of compromise.
The reason we’re on the verge of default is that, to paraphrase Rahm Emanuel, we never waste an opportunity to create a crisis.
This is one of the phoney-baloniest crises imaginable, but there it is. In the past, raising the debt ceiling has always been a pro-forma vote. Some Democrats vote against it if there’s a Republican president, and some Republicans vote against it if there’s a Democratic president.
But no one can really argue it’s the responsible thing to to do, not when it means — as it does in this case — you’re willing to turn the United States of America into the United States of Deadbeats.
Sure, we wouldn’t actually default on our loans, so the Chinese are OK. But we’d stop paying contractors who might have to lay off workers (remember when finding jobs was the big issue?) because we pretend we don’t have the money to pay our bills. One thing you can be sure of is that the crisis will end before the Social Security checks start bouncing.
You don’t need a degree in economics to understand what’s going on here. All you need is to have paid your cable bills. Politics was once said to be the art of the possible. Now it’s the art of making the possible seem impossible.
And so, as I’m writing this column, the headline on every website reads something like this: “Budget Talks Near Collapse.”
That was because House Majority Leader Eric Cantor has pulled out of budget-crisis meetings with Vice President Joe Biden. The meetings reportedly had yielded agreement on something like $2 trillion in budget cuts. Cantor said he didn’t want to talk anymore, though, because Biden and other Democrats were now talking about taxes and about more stimulus (read: spending).
Let’s be honest. The deficit is a real issue and must be addressed, just as Medicare is a real issue that must be addressed. But we can’t cut our way out of this deficit and we can’t grow our way out of it, either.
Cantor said he left the talks because it was now up to Barack Obama and John Boehner to work on this, presumably because Cantor can’t risk his Tea Party bona fides by even saying the word “tax” unless it’s followed by “cut.”
It could be that Republicans are trying to get Obama to make the first move on taxes so that Republicans can say, in the end, they were forced to be the responsible party and had to give in to an unyielding, tax-hiking White House.
There has to be some move on taxes to make this work. There was once some hope invested in the senatorial Gang of Six, reduced to Gang of Five before apparently disappearing altogether. The idea was for three Democrats and three Republicans to make the hard decisions for everyone else. But the effort fell apart when Republican leaders made it all too easy by saying they wouldn’t raise taxes, ever.
If you’re looking for a takedown of the tax cut strategy, I advise reading economist Bruce Bartlett, once Ronald Reagan’s guy on supply-side economics, who has become an apostate. Certainly, there has become a religious aspect to the whole idea of never raising taxes. If you , he explains how debt has grown by $11 trillion since 2001 — and how half the debt has come from a decline in revenues.
It’s an exciting read if you like that kind of thing. Or you can just turn on your TV, where someone is sure to be yelling that the end is near.
And someone else will be saying that, yeah, the end may be near, but it won’t be nearly as bad as you think.
E-mail Mike Littwin at mlittwin@ .
