Boehner's Plan for Debt Ceiling: Hold America Hostage
After having been sensible for quite a while, House Speaker John Boehner (R-Ohio) has adopted a remarkably dangerous position on the debt ceiling. His approach remains a hostage strategy -- he'll hold a gun to the American economy, until Democrats give him a series of spending cuts.
The Speaker's position has been criticized by the White House, Wall Street, American business leaders, the Treasury, the Federal Reserve, and independent economists, all of whom want the debt limit issue resolved quickly and efficiently. For his part, Boehner told "Face the Nation" this morning that he doesn't necessarily want to wait until early August.
"I'm ready to cut the deal today," Boehner said on Sunday. "You know, we don't have to wait until the 11th hour. But I am not going to walk away from this moment. We have a moment, a window of opportunity to act. Because if we don't act, the markets are going to act for us. Our creditors are going to act for us. And we could see exorbitant interest rates. We could see the end of our economy, if we don't act."
First, it's deeply misleading to characterize this as cutting a "deal." Boehner's not talking about striking some kind of compromise; he's talking about being paid a ransom. In this case, the "deal" is "Boehner gets what he wants." I don't mean to sound picky, but that doesn't match any reasonable definition of a "deal."
Second and more important is Boehner ongoing illiteracy. Consider exactly what Boehner has told us this week.
1. Economic uncertainty is a problem, so he'll hold the debt ceiling hostage, which creates uncertainty.
2. "Exorbitant interest rates" would be awful, so he'll push a debt-ceiling crisis, which would lead to higher interest rates.
3. Policymakers should protect economic growth, so he'll push a strategy that would likely invite a recession.
Boehner doesn't want to get dirty, so he's decided to play in the mud. He doesn't want to be hungry, so he's decided to fast. He wants to stay dry, so he jumped in a lake.
I can't say with any certainty whether the Speaker actually believes his own rhetoric, but I can say his approach to economic policy is gibberish.
As we discussed the other day, this isn't about politics, per se. The problem is Boehner is presenting an economic vision based on fantasy, confusion, and lies. The man simply has no idea what he's talking about.
He thinks the economy will be worse off if the debt ceiling is raised without massive cuts. He thinks the Recovery Act "hurt" the economy. He believes the public sector is "crowding out" private investment. Boehner's certain the economy "never" grows after a tax increase. He's convinced Fannie Mae and Freddie Mac "triggered the whole meltdown" of the U.S. financial system.
These claims aren't just wrong; they're ridiculous. It has nothing to do with Democrats vs. Republicans, or left vs. right. This is Boehner vs. reality.