The Grand Illusion
The United States is facing a debt ceiling crisis, and if the U.S. does begin to default on its fiscal obligations, the economic results will be far from pretty.
The Republicans have passed legislation in the House of Representatives that supposedly addresses the problem. In fact, it doesn’t, at least not in any way that won’t create even greater chaos than a default will, because the spending cuts required by that bill would amount to an average cut of 22% in virtually all non-defense government programs.
No responsible Administration can willingly accept such cuts, which would fall on the poorest of Americans and would also affect infrastructure and environmental programs, agriculture, air travel, and health and safety programs in a number of areas.
So why did the Republicans make such a proposal?
Some would say that it’s to force those “free-spending Democrats” back to financial sanity, or at least to negotiate for less federal spending.
I’m not so sure about that. The Republicans were perfectly happy to raise the debt ceiling in a Trump administration when the national debt was significantly increased by the Trump tax cuts, most of which went to the wealthy.
Could it… might it… just possibly be to break the economy temporarily because that’s the only way a Republican candidate could win the presidency?
If the Biden Administration agrees to any significant cuts in non-defense programs, in order to avoid a default, there will be significant negative economic impacts. If it doesn’t agree to heavy cuts, and the Republicans hold fast, there will be a default and negative economic impacts.
Either way, the economy tanks, and Biden gets blamed.
Pure brutal genius, and the poor dumb American public will dump the entire blame on Biden, and that poor dumb American public will get what it deserves. Unfortunately, so will those of us who saw the possibility coming.
From outside, in the present US political climate it looks like a pretty obvious political move, and a continuation of the Republican game plan of the past decades, where they create worse deficits while in power, then when the Democrats win power suddenly become oh-so fiscally straightlaced, forcing the Democrats to make the cuts and rebalance the budget, and get the flak for the downturn triggered by their predecessors.
The big question is whether the rich Republican megadonors would assess their economic losses caused by this strategy to be worth it for regaining complete Republican control. If they expect the resultant crash to possibly spiral out of control and hurt their fortunes too much, tbey might rein in such a destructive political move.
Or if Trump ends up as the Republican candidate, and the chaos he’d create looks like a worse option than the concessions they can get from the corporate Democrats (i.e. most of them) who are also likely to be influencable by big corporations anx vested interests. That might cause a rethink for some of the Republican megadonors (though not all the extremely ideologically driven ones), and that would make it less clear where the balance of pressures will end up.
It’s no fun for the rest of the world, looking on, to know that whether or not the US will crash the world’s economy hinges on some of those very unstable politicians being kept in check by unaccountable hidden donors’ personal agendas.
“… The structures of human association are determined primarily by shared ideas rather than material forces. The identities and interests of purposive actors are constructed by these shared ideas rather than given by nature. … “ – Alexander Wendt.
“The big question is whether the rich Republican megadonors would assess their economic losses caused by this strategy to be worth it for regaining complete Republican control. If they expect the resultant crash to possibly spiral out of control and hurt their fortunes too much, they might rein in such a destructive political move.”
I submit: the rich can weather storms better than 99.99% of humanity, and, they know each other having formed “friendships” of the Vito Corleone type. Thus, their main concern is to avoid Putin leadership.
According to realists such as Alexander Wendt; the world is already anarchic enough to be bursting all over with autocrats, strongmen, Godfathers, etc. who are having another go at forming business and free trade agreements. More easily and more likely to last if there is no Putin, Stalin, or Hitler among them.
“…the rich can weather storms better than 99.99% of humanity”.
Depends on whether their man Musk can get his Mars colony going in time for them all to move there before the global heating storms tear their Terran compounds down!
Shrug. The Republican base electorate still thinks that the Trump presidency was a huuuuge success.
They see reality through a very distorted lens, one which is fostered and amplified by the Republican Party.
So the Republican legislators (who don’t legislate) have a free pass for political theater.