Debt ceiling stakes: Weimar redux?

As Congress dithers on whether to raise the debt ceiling, Republicans are demanding deeper cuts as their price for raising it—or so they say. Meanwhile, no one has yet said why Congress should raise the debt ceiling.

House Speaker John Boehner (R-OH) has had many people call him a coward after he signed another temporary funding bill and got only $31 billion in budget cuts in return. (Most of those were cuts that President Barack H. Obama was going to make anyway.) But yesterday he told the Economic Club of New York that if Obama wants the debt ceiling to rise at all, he must agree to cut the budget deeper than any raise, and by trillions, not mere billions, of dollars.

Without significant spending cuts and reforms to reduce our debt, there will be no debt limit increase.

Boehner said further that he would spare no government program, nor consider raising taxes, either. Some House Republicans had earlier said that they would not ask the government to stop Medicare costs from rising; Boehner seemed to be making no such promise.

House Majority Leader Eric Cantor (R-VA) this morning said much the same in this video:

The White House has asked for a “clean” debt ceiling increase, and said only that they want to discuss spending cuts and budget reforms separately. They insist that unless the debt ceiling rises, the United States will not even be able to make interest payments. In short, default.

This last cannot be correct. Reuters says that Treasury Secretary Tim Geithner has already stopped selling bonds to State and local governments, and can do six other things to avoid borrowing over the limit. For one thing, he can sell off some stock in several companies that it bailed out, including General Motors, Ally Bank (formerly General Motors Acceptances Corporation), and American International Group.

House Minority Whip Steny Hoyer (D-MD) has already refused to raise the debt ceiling little by little, and insisted that any rise must be all at once. He also said that he was afraid that the debt ceiling debate would become political, as the Presidential and congressional elections drew near. The problem: the debate is already political. It strikes at the heart of what “Progressives” have always wanted to do: use the government to make people “better” as they see it. Whether that works or not, that costs money. (They might want to spend so much money deliberately, to cause a collapse and then pretend to be the saviors of society, as the late Richard A. Cloward and his widow, Frances Fox Piven, told them to do 46 years ago.)

Peter Grier of the Christian Science Monitor reminded everyone that Congress has raised the debt ceiling several times since 1962, and almost cynically wonders why the government even pretends to limit its borrowing. He also hinted that Boehner was wrong to refuse to raise taxes, as if raising taxes would automatically bring more money in.

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Andrea Tantaros at Fox News Channel, and the Wall Street Journal editors, both say that Republicans should be firm with Democrats and the President about spending cuts in return for a debt ceiling raise. The Journal at least said that bond traders would not panic if the debt neared its limit without a vote for a raise on schedule. But both the Journal and Tantaros said that the debt ceiling must rise—and neither would say why.

If the United States has already borrowed so much that it cannot pay interest anymore, then the United States is bankrupt already and should admit it. But that’s not true—yet. That will become true if unlimited borrowing goes on. Raise after raise in the debt ceiling makes it meaningless, as Grier of the CSM admits. The result will be even less confidence in the US dollar than people have as it is.

A loaf of bread for a day’s pay, and three loaves of barley bread for a day’s pay, and please don’t ruin the oil or the wine. Revelation 6:6

People also forget that Senator Obama did not want the debt ceiling to rise last time. He had an anti-war agenda. Now, of course, he has a spending agenda.

But in 2010, the Tea Party movement elected men and women to the House to follow an anti-spending agenda. If they now raise the debt ceiling, on any terms, they will show that they are less willing to pursue their agenda than once-Senator Obama was to pursue his. That cannot make anyone, bond trader or ordinary citizen, feel good about the future.

Better to leave the debt ceiling where it stands, and watch the sky not fall. And because this debate is already political, let it stay political. Let voters choose, in 2012 (and in 2011 in New Jersey, Virginia, and other off-year States), what kind of society they want to live in.