A tour de farce plays on!

Step by step, inch by inch, the passionless play proceeds: the House speaker proposes a new combination budget-cutting and debt ceiling-raising plan, then stands back when independent analysis shows it won’t generate the savings he promised, before the Congressional Budget Office gives good grades to the Senate majority leader’s plan (which saves little more than the speaker’s proposal).  Democrats are offering more than anyone would have expected, while some Republicans are revolting against their leadership for even thinking about going along with them, for not demanding more and more.  Who will be standing when the music stops next?

While I still expect that sanity will prevail and an agreement will be reached to prevent a crisis, nobody in Washington is doing anything about anything else and we look like a bunch of doofuses to the rest of the world as our nation moves closer to default.  So what, you ask—what the hell happens to you and me if they don’t raise the debt ceiling?

Q: Won’t refusing to raise the debt limit cut the deficit?

A. No.

Q: Do you mean that Congress can pass a budget that requires borrowing, and then argue later about whether to approve that borrowing?

A. That’s right.

Q. So, what happens to government spending if the debt limit is not raised? Will the United States default?

A. The United States will not have enough money to pay all of its bills… The possibilities range from “prioritizing” some payments and paying them first to paying bills in the order in which they were received.

The Bipartisan Policy Center analysis notes that if the government were to choose to pay the interest on its debt, Social Security benefits, Medicaid and Medicare payments, defense contractors and unemployment benefits, it could not have enough left to pay for the salaries of federal workers and members of the military, Pell grants for college, highway construction or tax refunds, among other things.

It doesn’t stop there: a default means some combination of government bondholders don’t get paid, government contractors and vendors don’t get paid, government employees don’t get paid, government benefits recipients don’t get paid, and people who don’t get paid have less money to spend so the economy slows down; government creditors demand higher interest rates on future loans and that leads to higher interest rates for we consumers on credit cards and mortgages; cities and states don’t get federal program payments and their own cash flow problems become worse.  Just the threat of default is starting to make the markets nervous.

Our country’s government spends way more than it takes in, and that needs to be corrected.  But as hard as it seems right now to make the choices that will lead to a stronger economy in the long term—and this isn’t going to be all fixed in your first six months in Washington, Mr. and Mrs. first-term Congressmember—it will only be harder if all the problems caused by a default are dumped on top of the ones we already face.  And even if there’s no default, the political playacting that both parties are consumed with right now may make financial markets skittish enough about the future that the credit rating of our country’s debt might be lowered anyway, leading to higher interest rates, etc., etc.

I’ve said this before: first, Congress needs to live up to its responsibility to prevent this totally preventable problem of potential default, then it and the administration can turn full focus on the screwed up federal budget mess that threatens our long-term financial health and security.  By the way, there’s a special tactical unit now on its way to the Capitol to help with that.

Places, please, for the big finish!

The war is not over

Surprise.  My first and strongest reaction was surprise when I saw on TV last night that Osama bin Laden had been killed by U.S. forces in Pakistan: after all this time—almost ten years since the September 11 attacks—I was surprised that the leader of Al Qaeda had been caught and disposed of.  Pleased at the news, yes, but a little startled: oh yeah, that’s still going on.

It’s not that I wasn’t confident that the American military and intelligence machine could do it, but like many (if not most) Americans I don’t give much regular or serious thought to the pursuit of terrorists, and that’s a shame because there are still thousands of American soldiers, sailors and Marines deployed on the other side of the world doing exactly that every single day and night.  Finding Bin Laden and defeating Al Qaeda was the reason we went to war in Afghanistan in the first place, remember?  But apart from changes in airport security, most Americans aren’t still impacted in their daily lives.  Plenty of people are—those troops, military families, survivors of victims of terrorism—but most of us are not.

Although we could be any time now: the experts on these terrorists expect the killing of Bin Laden to spark new attacks on the U.S. or on American targets around the world out of vengeance, and our government has raised the alert level at military bases and issued travel advisories for Americans around the world.  That makes sense: crazy religious zealots aren’t likely to just shrug off the death of their inspirational leader at the hands of the Great Satan and go on about their misdirected lives.  We shall see what happens.

Meanwhile, I’m not feeling the euphoria and glee I’m seeing in the video of the crowds in Lower Manhattan and outside the White House and elsewhere.  Punishing Bin Laden—with extreme prejudice—can’t help but be a good thing, but it’s not a happy ending, or even an ending at all, like VE Day or the surrender at Appomattox.  President Obama was right when he said “Today we are reminded that as a nation there’s nothing we can’t do when we put our shoulders to the wheel, when we remember the sense of unity that defines us as Americans.”  But so was Secretary of State Hillary Clinton: “Even as we mark this milestone, we should not forget that the battle to stop Al Qaeda and its syndicate of terror will not end with the death of Bin Laden.”

Or maybe ever.  And as people with short attention spans, who usually demonstrate a severe lack of patience for all but the quick and simple answer to every question, we’d do ourselves a favor by being realistic about what this news means for our future.  We won a battle, but the war goes on.