Have you noticed how the conversation about raising the debt ceiling has turned more and more toward “when” we default rather than “if” we default? It seems as if an ever increasing number of our Congressional leaders have come to the conclusion that the impasse between the parties will not be resolved by the August 2nd deadline. Should the deadline pass without resolution, the country, for the first time in its history, will default on its financial obligations. Economists say that interest rates will skyrocket, the DOW will tumble and the value of the dollar will no longer be the bell weather of the world’s currency. They say that the rippling effect will crash the world economy.
But there are a number of legislators that say we shouldn’t worry. Take Democratic Senator Clair McCaskill for example. McCaskill is a plain spoken moderate who speaks thoughtfully and refrains from setting her hair on fire. When asked about the impending meltdown she calmly stated: “the government is never going to default on its obligations. The Treasury Department will pay the interest on the debt to avoid any default. And then we’ll just have to prioritize our remaining expenses”. While this may sound like a reasonable statement to most; from our prospective, it is fraught with concern and ambiguity.
What McCaskill IS saying is that we will pay the interest we owe foreign banks and foreign governments to avoid any financial downturn and political embarrassment. BUT then we are going to have to look at our remaining expenses and decide who gets paid and who doesn’t. She’s not saying it but she means that Social Security, Medicare and Veterans Benefit checks may not appear in your mailbox as expected. Federal employees will find themselves taking a furlough of undetermined length. And states may have to wait a bit for those promised funds for Medicaid payments, construction and development projects and education subsidies.
McCaskill may not consider that “defaulting on our obligations” but we do.
The Republicans are standing firm on their pledge for “no increase in taxes.” If the country defaults they will paint Obama as the reincarnation of Herbert Hoover and they will ride that horse all the way to 2012. They are betting that Obama will blink just as he has on single payer healthcare, Gitmo, prosecuting terrorists in US courts and extending the Bush tax cuts.
The Democrats are bluffing as well. The approval rating for this Republican led Congress is in the tank. Democrats are betting that the Republicans won’t risk adding blame for the collapse of the world economy to their already shoddy resume’.
The two parties are playing poker with people’s lives. While they trot out their spokespersons to make witty comments to the press Americans are losing their jobs, homes are going into foreclosure and businesses are being shuttered. And now the very real possibility exists that the government will heap more hardship on the very people whose taxes are being used as poker chips.
If this is not “defaulting on our obligations” then what is?