PAUL KRUGMAN: Republicans and debt: 'Blackmailers without a cause'
Friday, Feb. 3, 2023 -- The federal government is basically an insurance company with an army. Social Security, Medicare, Medicaid and the military dominate spending and it's impossible to do much about deficits unless you either raise taxes -- which is obviously not part of the GOP playbook -- or make major cuts to these programs.
Posted — UpdatedStop me if you’ve heard this before: Two years after a Democratic president took office and pushed ambitious policies through Congress, Republicans have regained control of the House. They don’t have the votes required to repeal the president’s achievements, but a quirk of U.S. law — which requires that Congress vote a second time to authorize the borrowing that results from already enacted spending and tax legislation — seems to give them an opportunity to engage in blackmail, threatening to create a financial crisis unless their demands are met.
Actually, however, you haven’t heard this before. True, there are some parallels with the debt ceiling crisis of 2011. But there are also huge differences. Elite opinion has changed — the debt obsession that gripped Very Serious People in the media and beyond a dozen years ago has vanished. Democrats also seem made of sterner stuff, much more determined to resist extortion.
But the most important difference is that this time Republicans aren’t making coherent demands. It’s completely unclear what, if anything, they want in exchange for not blowing up the economy. At this point they’re blackmailers without a cause.
As always, the fundamental fact about the budget is that the federal government is basically an insurance company with an army. Social Security, Medicare, Medicaid and the military dominate spending, and it’s impossible to do much about deficits unless you either raise taxes — which is obviously not part of the GOP playbook — or make major cuts to these programs.
So the bottom line on the debt crisis is that there is no bottom line: Republicans denounce excess spending, but can’t say what spending they want to cut. Even if Democrats were inclined to give in to extortion, which they aren’t, you can’t pay off a blackmailer who won’t make specific demands.
Unfortunately, the emptiness of Republican fiscal posturing is no guarantee that we’ll avoid a debt crisis. If anything, it may make a crisis more likely. MAGA may lack policy ideas, but it’s rich in nihilism; Republicans don’t know what policies they want, but they definitely want to see Biden fail.
So far, the Biden administration’s strategy seems to be to flush Republicans out of hiding, force them to propose specific spending cuts, then watch them retreat in the face of an intense public backlash. There are also, I presume and hope, contingency plans to avoid crisis if this strategy fails.
But it’s hard not to be worried. It’s dangerous when a political party is willing to burn things down unless it gets its way.
It’s even more dangerous when that party just wants to watch things burn.
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