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Debt Limitapalooza 2023!
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While I agree it’s not feasible to pay off, equally as important is no one can articulate why paying it off is a good idea.
nakedfrog
No Lifer
MrSquished
Lifer
It seems Paul Krugman sees how the Dems have fumbled this so far.
www.nytimes.com
May 16, 2023
By Paul Krugman
You’re reading the Paul Krugman newsletter, for Times subscribers only. A guide to U.S. politics and the economy — from the mainstream to the wonkish. Get it in your inbox.
As soon as Republicans took control of the House last November, it was obvious that they would try to take the economy hostage by refusing to raise the federal debt limit. After all, that’s what they did in 2011 — and hard as it may be to believe, the Tea Party Republicans were sober and sane compared to the MAGA crew. So it was also obvious that the Biden administration needed a strategy to head off the looming crisis.
More and more, however, it looks as if there never was a strategy beyond wishful thinking. I hope that I’m wrong about this — that President Biden will, at the last minute, unveil an effective counter to G.O.P. blackmail. He may even be forced to do so, as I’ll explain in a bit. But right now I have a sick feeling about all of this. What were they thinking? How can they have been caught so off-guard by something that everyone who’s paying attention saw coming?
For those somehow new to this, the United States has a weird and dysfunctional system in which Congress enacts legislation that determines federal spending and revenue, but then, if this legislation leads to a budget deficit, must vote a second time to authorize borrowing to cover the deficit. If even one house of Congress refuses to raise the debt limit, the U.S. government will go into default, with possibly catastrophic financial and economic effects.
This weird aspect of budgeting allows a party that is sufficiently ruthless, sufficiently indifferent to the havoc it might wreak, to attempt to impose through extortion policies it would never be able to enact through the normal legislative process.
What, then, should Biden & Co. have done once Republicans took the House? They could have tried to raise the debt ceiling during the lame-duck session. This would have been hard given an evenly divided Senate. If it was possible at all, it probably would have required making big concessions to those Democratic senators least supportive of Biden’s agenda. Still, better to have a hostage negotiation with Joe Manchin than with Marjorie Taylor Greene.
So unless there was a plan to deal with the coming confrontation, there should have been a major effort to raise the debt ceiling. The fact that there was no such effort suggested that maybe there was such a plan.
But all we’ve seen from Biden officials since the House changed hands has been a combination of assertions that a U.S. default would be catastrophic — which may well be true — and denigration of any and all possible end runs around the debt ceiling. My heart sank, for example, when Janet Yellen, the Treasury secretary, repeatedly rejected the idea of minting a platinum coin — one of several possible ways to bypass the debt limit — as a “gimmick.” Yes, it would be a gimmick, but it would also be harmless. As I explained the other day, it would not mean printing money to cover the deficit; in practice, it would amount to carrying out normal borrowing through a back door.
The problem is that Yellen was in effect saying that the administration wasn’t open to any strategies that sounded silly or unorthodox; yet every strategy that avoids the debt limit must, in fact, be unorthodox, and will probably sound silly if taken out of context.
The economic merits of various unconventional financing strategies aside, think about how the White House was positioning itself politically. On one side, it signaled that it was terrified of the consequences of default; on the other, it made it clear that it was unwilling even to consider any alternatives to an increase in the debt limit. The administration might as well have put a sign on its back saying “Kick Me
Maybe the administration expected moderate Republicans or business groups or supposedly nonpartisan advocacy groups to somehow step in and pressure the G.O.P. to produce a clean debt ceiling bill. But I don’t see how anyone who has been awake for the past 15 years could have believed that was a real possibility.
And sure enough, after months of asserting that it would never engage in negotiations over the debt ceiling, that it would accept nothing less than a clean increase, the administration is now … negotiating over the debt ceiling.
Many people have pointed out that this sets a terrible precedent, that having seen that extortion works, Republicans will engage in it again and again. Even these concerns, however, seem to me to be taking too long a view. Now that Republicans see what seems to be an administration on the run, there’s every reason to expect them to keep escalating their immediate demands — quite possibly to the point where no deal is possible.
There’s a precedent from the Obama years. Back in 2011, President Obama and John Boehner, who was then the speaker of the House, came very close to a so-called Grand Bargain on debt that would have been objectively terrible — it would, for example, have raised the age of eligibility for Medicare, even though life expectancy for working-class Americans had risen very little — and would probably have been politically disastrous for Democrats. But the deal fell through because Republicans were unwilling to accept even small tax increases as part of a deficit-reduction plan.
Sure enough, Republicans have reportedly rejected every proposal to make a debt ceiling deal more acceptable to the Democratic base by closing tax loopholes.
I have no idea what happens next. I think there’s a real possibility that Biden officials will in the end be forced by sheer Republican intransigence to adopt unconventional methods after all — a task that will be made much harder by the fact that those same officials have spent months trash-talking the approaches they may need to follow.
But I don’t see any way to regard this whole episode as anything but a disastrous failure to face up to the reality of an opposition party controlled by extremists.
Opinion | How Biden Blew It on the Debt Ceiling (Published 2023)
Doesn’t anyone here know how to play this game?
How Biden Blew It on the Debt Ceiling
May 16, 2023
By Paul Krugman
You’re reading the Paul Krugman newsletter, for Times subscribers only. A guide to U.S. politics and the economy — from the mainstream to the wonkish. Get it in your inbox.
As soon as Republicans took control of the House last November, it was obvious that they would try to take the economy hostage by refusing to raise the federal debt limit. After all, that’s what they did in 2011 — and hard as it may be to believe, the Tea Party Republicans were sober and sane compared to the MAGA crew. So it was also obvious that the Biden administration needed a strategy to head off the looming crisis.
More and more, however, it looks as if there never was a strategy beyond wishful thinking. I hope that I’m wrong about this — that President Biden will, at the last minute, unveil an effective counter to G.O.P. blackmail. He may even be forced to do so, as I’ll explain in a bit. But right now I have a sick feeling about all of this. What were they thinking? How can they have been caught so off-guard by something that everyone who’s paying attention saw coming?
For those somehow new to this, the United States has a weird and dysfunctional system in which Congress enacts legislation that determines federal spending and revenue, but then, if this legislation leads to a budget deficit, must vote a second time to authorize borrowing to cover the deficit. If even one house of Congress refuses to raise the debt limit, the U.S. government will go into default, with possibly catastrophic financial and economic effects.
This weird aspect of budgeting allows a party that is sufficiently ruthless, sufficiently indifferent to the havoc it might wreak, to attempt to impose through extortion policies it would never be able to enact through the normal legislative process.
What, then, should Biden & Co. have done once Republicans took the House? They could have tried to raise the debt ceiling during the lame-duck session. This would have been hard given an evenly divided Senate. If it was possible at all, it probably would have required making big concessions to those Democratic senators least supportive of Biden’s agenda. Still, better to have a hostage negotiation with Joe Manchin than with Marjorie Taylor Greene.
So unless there was a plan to deal with the coming confrontation, there should have been a major effort to raise the debt ceiling. The fact that there was no such effort suggested that maybe there was such a plan.
But all we’ve seen from Biden officials since the House changed hands has been a combination of assertions that a U.S. default would be catastrophic — which may well be true — and denigration of any and all possible end runs around the debt ceiling. My heart sank, for example, when Janet Yellen, the Treasury secretary, repeatedly rejected the idea of minting a platinum coin — one of several possible ways to bypass the debt limit — as a “gimmick.” Yes, it would be a gimmick, but it would also be harmless. As I explained the other day, it would not mean printing money to cover the deficit; in practice, it would amount to carrying out normal borrowing through a back door.
The problem is that Yellen was in effect saying that the administration wasn’t open to any strategies that sounded silly or unorthodox; yet every strategy that avoids the debt limit must, in fact, be unorthodox, and will probably sound silly if taken out of context.
The economic merits of various unconventional financing strategies aside, think about how the White House was positioning itself politically. On one side, it signaled that it was terrified of the consequences of default; on the other, it made it clear that it was unwilling even to consider any alternatives to an increase in the debt limit. The administration might as well have put a sign on its back saying “Kick Me
Maybe the administration expected moderate Republicans or business groups or supposedly nonpartisan advocacy groups to somehow step in and pressure the G.O.P. to produce a clean debt ceiling bill. But I don’t see how anyone who has been awake for the past 15 years could have believed that was a real possibility.
And sure enough, after months of asserting that it would never engage in negotiations over the debt ceiling, that it would accept nothing less than a clean increase, the administration is now … negotiating over the debt ceiling.
Many people have pointed out that this sets a terrible precedent, that having seen that extortion works, Republicans will engage in it again and again. Even these concerns, however, seem to me to be taking too long a view. Now that Republicans see what seems to be an administration on the run, there’s every reason to expect them to keep escalating their immediate demands — quite possibly to the point where no deal is possible.
There’s a precedent from the Obama years. Back in 2011, President Obama and John Boehner, who was then the speaker of the House, came very close to a so-called Grand Bargain on debt that would have been objectively terrible — it would, for example, have raised the age of eligibility for Medicare, even though life expectancy for working-class Americans had risen very little — and would probably have been politically disastrous for Democrats. But the deal fell through because Republicans were unwilling to accept even small tax increases as part of a deficit-reduction plan.
Sure enough, Republicans have reportedly rejected every proposal to make a debt ceiling deal more acceptable to the Democratic base by closing tax loopholes.
I have no idea what happens next. I think there’s a real possibility that Biden officials will in the end be forced by sheer Republican intransigence to adopt unconventional methods after all — a task that will be made much harder by the fact that those same officials have spent months trash-talking the approaches they may need to follow.
But I don’t see any way to regard this whole episode as anything but a disastrous failure to face up to the reality of an opposition party controlled by extremists.
Roger Wilco
Diamond Member
Talks are supposedly back on.
Drach
Golden Member
BOO!
Talks need to end as far as I'm concerned. Let the republicans have their way this time.
Let the republicans getting social security and others that have investments feel the pain.
These assholes have tried this in the past and still haven't learned their lesson.
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The basic idea seems to be that republicans are willing to tank the global economy because they think doing so will cause Biden to lose re-election.
I think like with Afghanistan Biden should do the right thing and take the hit. Call their bluff - if they tank the global economy they were going to do it eventually anyway so no loss, if you successfully call their bluff then you permanently disarmed a public policy disaster.
I really think Democrats should view this issue as ‘possible default now’ vs. ‘inevitable default later’. Biden, Afghanistan this shit.
MrSquished
Lifer
Genius level plan to let the economy tank because you were too stupid to not be prepared for the enemy you were facing. And having zero messaging skills..
What a terrible fucking take this is
Indus
Lifer
So why don't you offer your condo to the next mugger that you see holding a gun?
That's what this is. A mugging in broad daylight!
NWRMidnight
Diamond Member
You don't need messaging skills when sending a message won't fix the problem. This isn't the time to worry about getting a message across, it's the time for action. The only skills needed are those that involve action and follow thru that fixes the problem. The results will be the message. Fskimospy is talking about action and follow thru, or at least that is my interpretation of what he is saying.
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Jaskalas
Lifer
They'll correct me if I am wrong, but they probably want Dems to shoot the mugger and then have a solid plan for explaining it to the American people. Not begging the mugger and offering them goods and eventually having to task drastic action that is too little too late.
If Biden (or anyone in the admin) had a plan, we should have probably heard of it by now.
There is no excuse to be AOWL on an issue like this. Negotiating with the Republicans should be a smoke screen, not the actual plan of action to stop this !@#$.
MrSquished
Lifer
It's part of the plan dude. You should have been controlling the narrative better this whole time because you should have known the Republicans will indeed tank the economy. Have you not learned anything about the enemy yet? This whole time could have been spent messaging about the economic terrorists, holding the American economy hostage, and that we're going to have to take a serious action to fix this like the 14th amendment. Instead if you read the Krugman article he summarizes it well, They really thought they were negotiating with somebody somewhat sane.
They poo poo things like minting the coin and didn't really bring up the 14th amendment seriously so now the public thinks this is an actual negotiation instead of seeing that this is actually a choice between him the insane republicans and Democrats who framed the problem and we're going to take care of it in a unique way.
I'm sorry this is why the Democrats keep fucking up it's time to call them out and get some new blood in there. Not these pseudo intellectual fucking morons that are oblivious to the reality around us
Yes, people who focus on messaging are trying to win the current debt ceiling fight. While that’s fine, it’s also pointless in the end because we will just have the same fight next year and the year after that.
Biden should do the right thing and solve the problem permanently.
Jaskalas
Lifer
That is not a difference from what we are saying.
The actual difference is that Biden has, thus far, failed to do it. His admin is actively working AGAINST a real solution. See framing it as negotiations while people like Yellen badmouth solutions. Biden is undermining the very thing we seek to achieve.
MrSquished
Lifer
You just said he should let the economy tank to prove a point.
Try to keep your story straight and yes messaging is part of how to enact a plan.
He had months to frame this as not a negotiation and show he was ready to make a permanent solution and get public opinion on his side .We don't negotiate with economic terrorists and extremists. If they don't pass a clean debt limit bill, They would look into and use extraordinary measures.
Instead they let it pan out like it was a negotiation and now they look like idiots. They could have made this narrative a binary choice. It would have taken a few months but it definitely could have worked. A simple binary choice between the insane republican extremist party holding the economy hostage for a political pawn versus the party that was going to do the responsible thing and not allow them to. And this would take out of the 14th amendment or minting the coin.
Instead here we are at zero hour and the pseudo intellectuals are like let's let the economy tank and show the world something.
Please don't ever apply to be a consultant for the Democratic party. Or maybe you are already
NWRMidnight
Diamond Member
In a football game, do you run out and kick the game winning field goal at the beginning of the game, or at the end? Because what you guys are saying is Biden should have went out and kicked the game winning field goal, at the beginning of the game.. It's not about messaging, it's not about negotiations, or the message it puts out there. It's about playing the game, and kicking the game winning field goal at the correct time, when there is not time left for the other team to turn it around. If Biden used the 14th amendment from the start, the lawsuits would hit, giving the SCOTUS time to rule, and possibly in the GOP's favor, because you know... and where would that leave us as a nation other than removing all stops for the GOP to completely fuck us with no way to stop it at all?
Edit: spelling.
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Most Americans simply do not care about beltway politics, or how many consultants it takes to out "message" the other guy. They're too stupid to connect all the dots, and instead just blame the old man in charge for the lowest unemployment rate in 2 generations. Wait, is that a bad thing?? My point is that it isn't just Democrats being bad at politics; it's that tribalism largely determines how people choose to view the world (i.e. our country).
As for dealing with domestic terrorists, I mean the House GOP conference, I agree that they aren't serious people and negotiations should be held to a minimum. If there's a modest deal that can be done on the debt ceiling with tiny concessions, I'm okay with that. Any substantial talks about the next budget should be part of separate negotiations.
"Calling their bluff" and allowing the global economy to tank just isn't a sound strategy; people tend to blame the sitting President when the economy slumps, and we're only about a year away from the heart of the election cycle. Playing chicken with a mad man never works out, because the sane man will blink first. I also believe it's safe to say MAGA Repubs are crazier than their Tea Party predecessors; they are not bluffing about a debt default and they DGAF if they get blamed. I don't think the Biden admin has to signal publicly everything they plan to do, but excluding all options doesn't seem to be effective in any way. That's basically what Krugman is saying. I also agree with many of those in this thread who agree that if it comes down to the end and the GQP is obstructing as we expect them to, then just mint the platinum coin and move on.
Mind you, part of the reason the admin doesn't want to unilaterally solve the crisis by executive action is because there must be negotiations over the next federal budget. So getting McCarthy ousted really doesn't help prevent a federal govt. shut down at some point. But the debt limit has to be raised very soon, and any political consequences will have to be for another day.
JTsyo
Lifer
It would take a balanced budget for 30 years.
MrSquished
Lifer
The Democrats have failed completely to frame this issue. Is now seen as a negotiation and not what it really is, The Republicans playing economic terrorists with the entire economy for political gains. But the Democrats didn't message properly they said these unorthodox things weren't on the table because what, they thought they were really negotiating with someone? WTF.
Republicans are pieces of shit but the Democrats are fucking morons to be in this situation
Republicans are pieces of shit but the Democrats are fucking morons to be in this situation
MrSquished
Lifer
What are you even talking about. There was no game. You should know the other team was never going to negotiate honestly. That makes you an idiot step one.
Second yes you do have to frame things for the American people. This is why during Clinton's campaign the slogan during the campaign was 'it's the economy stupid'.
Because it's all about being and staying on message.
If you don't think messaging is anything to do with politics in this country you're a fucking idiot
NWRMidnight
Diamond Member
It is a game, the fact that you don't understand how the game of politics is played is astonishing. Even if the other team is faithless, cheaters, and liars, you still have to play. I am sorry, I used a sports medifore that I figured you would understand. But that even went over your head.
Biden isn't campaigning where the debt ceiling is concerned. This isn't about winning the hearts of voters, it's about doing what needs to be done. There is a time for getting a message out, and there is a time to just not worry about the message. Specially when it's already clear that it's the GOP that have created the problem. The only people who don't already understand that are their supporters, so the message you are looking for is pointless.
BTW, Clinton's message wouldn't make sense to most of the voters of today. That's the problem, people like you are looking for a messsage, one that needs to be spelled out for them, while the rest of us don't need a message, because we understand what's happening.
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NWRMidnight
Diamond Member
What situation are you referring to that the Democrats have the majority to control?
You seem to think the Democrats control the narrative coming from the GOP controlled house.
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