Why won't American businesses stop the GOP?(Read article summary)
Republicans are threatening economic recovery by demanding conditions to raise the debt ceiling
J. Scott Applewhite / AP
As the government approaches its borrowing limit of $14.3 trillion, Republicans are seeking political advantage over what conditions should be attached to raising that limit.
This is a scandal â€” or should be. Raising the debt limit shouldnâ€™t be subject to party politics. Economic extortion should be out of bounds.
Itâ€™s bad enough government shutdowns have become an accepted part of political negotiation. But failure to increase the amount the Treasury can borrow would have far graver results.
Weâ€™d go into default. The full faith and credit of the United States would be in jeopardy. Treasury bonds would go into free fall. Interest rates would skyrocket.
We, and most of the rest of the world, would fall into financial chaos.
The recovery is still fragile. All this would force us and most of the rest of the world into a deeper recession or worse.
No one in their right mind would threaten this. Yet itâ€™s talked about as if itâ€™s just another aspect of Washington politics â€” a threat that might be carried out in early July when the Treasury runs out of ways to keep paying our debts.
In fact, itâ€™s a giant game of highway chicken, and if one driver doesnâ€™t yield the crash will be catastrophic.
Games of chicken are won by drivers able to convince their opponents they wonâ€™t swerve. That gives a strategic advantage to Republicans backed by the Tea Party, who are so convinced government is evil theyâ€™ve signaled theyâ€™d be willing to risk it.
But this shouldnâ€™t be a matter of political strategy. Disagreement about the nationâ€™s budget should be worked out through the constitutional process of majority votes in Congress, followed by the Presidentâ€™s signature or veto, and Congressâ€™s right to override the veto.
No group of legislators is entitled to threaten to crash the United States economy if its demands arenâ€™t met.
The biggest surprise is the silence of American business and Wall Street. They have as much if not more to lose as anyone if this game ends in tragedy. Yet the GOP â€” which big business and Wall Street fund â€” insists on playing it.
Why isnâ€™t the Business Roundtable decrying the use of this tactic? Where are the leaders of Wall Street? Where are the corporate statesmen? They should insist this game of chicken be called off or theyâ€™ll stop the funding.
If so, theyâ€™re wrong. The Republicansâ€™ demands are so far beyond the pale â€” turning Medicare into vouchers that funnel money to private insurance companies, turning Medicaid and food stamps into block grants that would deliver less to the poor, giving a giant tax windfall to the very rich â€” they cannot be met without causing the Democratic base (and most Independents) to revolt.
Yesterday Standard & Poorâ€™s (hardly a beacon of reliability after the Crash of 2008, to be sure) downgraded Americaâ€™s credit outlook. Expect more downgrades if the game of chicken continues.
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