Debt Ceilings and Democracy
Democracy is both a powerful and fragile thing. There are many countries in the world with newly hatched democracies that struggle to really be democratic because of rampant and deeply entrenched corruption, because the middle-class is so small that votes can be bought for the price of a sack of rice, because of racial or religious factionalism, etc.
You really have to think of democracy as a rare orchid. This, in part, is what has made the United States of America such an extraordinary country. Because what democracy needs most of all is a belief in democracy. Regardless of how much you wish to hold fast to your particular side of the ideological blanket, you must first and foremost believe in the sanctity of the blanket. Right or left, you have to believe most deeply in the legitimacy of every vote, whether for your party or for another.
This demands a philosophical and emotional maturity that many societies have simply not reached yet, and which, I am sad to say, I think the US is losing very fast.
Let us be very clear. The current debt crisis looming in the US is not about debt. It’s about ideology. There is a small but very vocal and intransigent part of the US government that has decided to precipitate this crisis in order to further its ideology. This small group of, for the most part, recently elected Tea Party members want the US to have a radically smaller government. Not the usual debate between Democrats and Republicans, this is about decimating the power of the federal government to impose its will on the country.
I don’t want to debate whether smaller government would be good or not. I just want to clarify the situation. The massive debt incurred over the Iraq and Afghan wars under Bush, and then the massive financial bailouts under Obama have taken the US debt to astronomical levels. Nonetheless, the United States is a financial powerhouse, no matter what the media pundits are saying at the moment. There is no point in pretending that the US is Greece or Portugal. It isn’t. The US has the financial capacity to pay its bills.
Ideologically, the Democrats would like to do that by a combination of cutting some government spending (yes, no matter what Boehner says on television, Obama does not want a ‘blank check’: there is NO plan on the table, Democrat or Republican – that does not contain very significant spending cuts) and to raise taxes – especially for individuals and corporations at the top 10% of the economic ladder.
What the Republicans (and the Democrat Reid proposal) have proposed is to bring down the debt solely by government spending cuts, with no tax hikes for anyone. Not because there aren’t some Republicans who would agree to some moderate tax increases, but because the Tea Party is so intransigent, it simply won’t tolerate having that on the discussion table.
Old style conservatives tend to be debt-phobic. And strangely enough, in this case, I would count myself fiscally as one. Traditional conservativism would say that it is important to pay down the debt as fast as possible by a combination of spending cuts and tax increases because, in the long run, nursing a large debt is far more costly than short-term pain.
But the portion of the Republican party who is driving the agenda here is not really interested in paying down the debt. They are too short sighted to see that a debt-less US is a far more powerful entity. What they want is to impoverish the US government to the point where it has no power. Their short-term debt-ceiling relief is not meant to keep government honest. It’s meant to ensure that, at the next election, Obama will not get re-elected. What they are doing is running for office in the middle of an economic storm and using the current financial circumstances to force their way into power.
The crisis that this has precipitated is long-term. Financial markets expect that when you’re talking finance, you’re talking finance, not elections. The prospect of US Treasury bonds being downgraded from their traditional AAA rating is not a short-term issue. It will mean gravely higher interest rates, trigger a world-wide economic stagnation at best. The world has seen the US as a financially responsible haven where it puts its money in times of trouble. When that haven disappears, very bad things are going to happen – globally.
Homey stump speeches about big bad government are all very well, but Americans have to realize that there is no isolationism anymore. The biggest chunk of their debt is held by China. What happens in the next few days on the floor of Congress is going to affect the whole world and come back to bite them.
Americans also need to acknowledge that many, many countries in the world are very prosperous, with high living standards, stable government and growth potential, while still paying far higher taxes than the US. Why are ordinary citizens in the US so adverse to having the upper 10% of their economic echelon pay some more?
And, if the Tea Party were really the conservatives they claim to be, why aren’t they demanding both cuts and tax hikes to pay down the debt. After all, it is getting rid of the debt that is truly, in the long term, the most fervently patriotic thing to do. If they want a shining, prosperous and powerful America, then getting rid of the debt by whatever means necessary, is the first step.
Their intransigent opposition to this is what reveals their real agenda. They don’t care about their country. They care about power. And that, I am sad to say, is a pretty 3rd world attitude.
Whether the debt ceiling is raised on August 2nd or not, the damage has been done. The world has watched the most prosperous country on earth haggle about whether it will or won’t pay its bills. It is extraordinarily tragic to see the most stable democracy on earth do itself such damage. It acts as an exemplar for undemocratic governments like China. It allow them to say: see? that’s what democracy gets you! Chaos.
I can’t pretend this is an objective post. It’s not. As socially liberal as I am, I am indeed a fiscal conservative. Please, America, reconsider your prejudices. Cut your spending AND raise your taxes. Pay down your debt and purchase your economic freedom from countries that have far uglier political systems than your own.
You owe it to yourselves. And the rest of us – in the not so free world – would appreciate it.