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Before You All Crash the Economy/Learn Debt v Deficit

Updated: May 16, 2023

Pushing the Economy to the Limit

​​​​​ Somehow, here we are again, just over two weeks away from what could be, if everyone plays their cards wrong, a global catastrophe if our government fails to raise the debt ceiling and pay our bills. Despite what Republicans, and infuriatingly many elements of the media, including publications like Axios, Punchbowl news, and CNBC will tell you this isn't a matter of fiscal responsibility. Whether or not you believe the national debt is a problem, or that our spending is within bounds, or out of control, the debt ceiling simply has to do with whether America will pay for the things it has already purchased, or if it's going to be a deadbeat and allow its debts to go unfulfilled. Republicans, of course, have seized on this must-pass piece of legislation as a key piece of leverage in obtaining their deeply ideological, partisan, and unpopular demands. The recently passed debt ceiling bill in the House is a conservative wish list that includes sweeping cuts across government discretionary spending of up to 22%, decimating government agencies, work requirements for Medicaid, and the repeal of most of President Biden's agenda including key provisions of the IRA and funding of the IRS. This is a profoundly radical agenda, and as regular readers of this email know, deeply out of line with the American people’s desired future. Knowing this, Republicans are using this moment to play a game of chicken confident they won’t blink first when up against the feckless and spineless Democrats. Tragically, signs from within the White House suggest the Republicans may be right, as Biden’s already entered negotiations with the Republicans, allowing the mainstream press to equate the Republican Party’s political terrorism to normal negotiating practices. Despite Biden claiming that his administration learned from Obama’s, his behavior seems far more reminiscent of 2011, when Obama legitimized the Republican’s debt ceiling hostage negotiation tactics rather than 2013, when Obama effectively stonewalled them. The worst part is that none of this should have even happened. The Democrats once again made the bed we are all sleeping in, when they failed to remove the debt ceiling from partisan power struggles. This, after Republicans attempted this same chicanery twice before. Instead, Democrats raised the debt limit in 2021 just enough to give Republicans the precise ammunition that they needed in 2023. Utter, predictable, incompetence. Biden and Congressional Democrats still have several options to save their agenda, a semblance of sanity in our politics, and potentially save the global economy. One option is for Congressional Democrats to get a discharge petition passed through the House. This is still possible, but with only a couple weeks before the June 2nd deadline, the timing will be very tough. Alternatively, Biden and his administration could show leadership in a crisis, and take executive action to prevent this terrorism. He could use the 14th Amendment, which states that, “…the validity of public debt of the United States authorized by law… shall not be questioned,” or he could mint a $1 Trillion platinum coin. Finally, he could claim Congress has sent conflicting legislative instructions, between passing a budget in September and failing to raise the debt ceiling in June, and simply choose to execute the legislation that does not result in a global economic shutdown. A nearly paralyzing array of strong choices, but of course Biden’s administration is divided, weak and vacillating, as he shows us he is not the leader we need. From voting rights, to attacks on abortion and labor and beyond, this is a time where the fight itself is worth it, and Biden can’t help but capitulate. Frankly, I still don't think that in the end the Republicans will go through with blowing up the economy. There is simply no constituency for what it is the Republicans are threatening., especially not among their rich donors. Everyone is going along with this scenario because they believe from the donor class on down that the Democrats will blink, the Republicans will get what they want and the crisis, as far as the donor class is concerned, will be averted. The powers that be are not going to allow themselves to lose vast quantities of money for political games. Whether or not, all the players have read this most dangerous of games correctly, and only time will tell. We know, however, that this won’t be the last time we grapple with the debt ceiling debate. We must learn from this insanity and organize not just politically, but economically, so that nihilistic Republicans can no longer use terrorism to hold our country hostage! We need to build an economic cudgel that can slap back, and make sure that this government serves the people, instead of teetering on the brink of failure whenever we need to pay our bills. So join us each Tuesday in growing solidarity and #DSOT! #UPM

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