The Washington Post's Ezra Klein wonders how politicians like Michele Bachmann and Pat Toomey can actually advocate for political inaction in the face of the United States hitting its national debt ceiling. Noting that all mainstream economists and political leaders agree that hitting the debt limit without raising it will cause an economic crisis (if not a full-blown recession), Ezra suggests and dismisses that perhaps pols like Bachmann and Toomey are blinded by a moralist view of the debt--that it is bad because debt is in and of itself bad, not necessarily for larger economic reasons.
But I wonder if there’s not a simpler, if more cynical explanation: That pols like Bachmann and Toomey simply don’t know what they’re talking about, either through willful ignorance or political cynicism.
Elsewhere, Ezra dug up a recent Government Accountability Office report on the effects of a protracted debate over raising the debt limit. It makes one key, and I think underappreciated point: “The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred.” In other words, when Congress discusses raising the debt limit, they’re not talking about a new round of spending; they’re talking about paying the bills from previous rounds of spending. This would not be, as some politicians like to put it, a case of cutting up the government's credit cards; this would be cutting up the credit card bills. That’s why the debt ceiling debate is in some senses kabuki theatre: No serious mainstream politicians argue that the United States should not pay its obligations. [Read the U.S. News debate: Should Congress raise the national debt limit?]
But it’s also a distinction a lot of Republicans seem content to obfuscate, and extremists like Bachmann and Toomey to an extreme extent. In fact their whole negotiating position is premised on that obfuscation: They want to frame the debate as being about new spending because they are trying to behave as if they can credibly threaten to not raise the debt ceiling (and thus have the United States default, sending the global economy into turmoil and robbing the United States of its special place of preeminence). [Check out political cartoons about the economy.]
And they’re playing with fire. Polls show that by overwhelming majorities, voters oppose raising the debt ceiling. And I don’t think it’s too insulting to the great wisdom of the American people to say that they don’t understand the finer distinctions of the debt ceiling debate--that they, to use the GAO’s phrasing, think that the debt limit controls the government’s ability to run deficits or incur debt.
The extent to which lawmakers are willing to traffic in misconceptions about debt limit it may help them with political leverage now; but it could come back and hurt them later on when it comes time to deal with the issue as it is, not as they want voters to see it.