Heritage Foundation: Going Into Default Is Better Than Compromise
Ed Feulner, the President of The Heritage Foundation, writes today that letting the nation go into default is preferable to making a deal that involves any amount of compromise:
We find ourselves in the midst of an important battle, the outcome of which will be determined by decisions to be made in the immediate days ahead. We must win this fight. The debate over raising the debt limit seems complicated, but it is really very simple. Look beyond the myriad details of the awkward compromises, and you see an epic struggle between two opposing camps.
On one side are those who have come to realize it would be madness to let the political class borrow more without imposing a serious check on government spending. They have produced budgets and now an actual legislative plan to get things under control.
On the other, you find those who consider more spending, taxing, and borrowing a royal prerogative. They have produced nothing but rhetoric and empty promises and have pushed this debate to the brink.
(…)
The men and women thinking of compromising at this point are not bad or unpatriotic; they simply have lost their way. Those of us who still watch old movies can compare the present situation to the 1957 classic “The Bridge on the River Kwai.”
In the film, an upright British colonel who had become a prisoner of war forgets temporarily the principles he was sworn to uphold and—to show his Japanese captors the professionalism of British soldiers—puts his men to work building the best bridge possible.
In the end, he recovers his sanity and realizes he is only helping the Japanese war effort, and he helps destroy the bridge.
It isn’t too late for us yet. Government spending is currently at 24.3 percent of GDP, and U.S. debt held by the public stands at 69.1 percent of GDP. This bridge needs to be stopped.
Congress should not raise the debt limit without getting spending under control. Debt limit legislation should put America on the path to driving down federal spending and borrowing, while preserving the ability to protect America without raising taxes.
In other words, it’s my way or the highway (to default and economic panic)
This isn’t a serious policy proposal, of course, it’s just partisan zealotry. The problem is that the supposedly responsible people in the room, the men and women in Congress, seem to think that it’s an actual viable alternative. Those would be the debt kamikazes that Steven Taylor and I have written about before. The idea that we can allow the August 2nd deadline to pass without having to worry about the economic consequences of the same, or that allowing those consequences to happen would somehow be better than giving even an inch in negotiations with the Democrats is probably the most incredibly irresponsible thing I’ve ever seen anyone put in writing.
In parting, I’ll just remind everyone that the advice that Feulner gives the House GOP is precisely the opposite of what the American people say they want.
The Bridge over the River Kwai? Really? That’s what passes for right-wing economic theory now?
If “the adults in the room” believe that more debt, to be spent on more scams (like Obamacare and highspeed rail) that I DO NOT WANT, is a good thing, then they should be spanked and sent to bed without their supper.
Beth — could you explain to me the concept of a liquidity trap and then also point to an example of contractionary expansion when short term interest rates are already at the zero-bound.
Or Shorter Beth — I don’t get all my policy preferences, let’s burn the place down.
@Dave Anderson: I seriously question whether Beth could even describe the relationship between credit, debt and money supply at the most basic level.
She’s not one to let knowledge get in the way of her beliefs.
In fairness to Beth and folks like her, she’s not the problem. The Beths of conservatism have been puffed up and egged on for years by people who have no excuse for not knowing better.
Mike
I think Beth is wrong too, but come on, these conservatives did not get us where we are. If the Democrats had not driven up debt to such outrageous levels there would not have even been a Tea Party movement.
So can we guess Beth would not have wanted Social Security and the Interstate System? Government has to do, and chooses to do, things for the general good…not for your good. (Frankly, it’s pretty childish of you to think otherwise.) But MBunge makes a great point…it’s not your fault that you’ve been taken in by the con men in the GOP and the grifters at the Heritage Foundation.
@Terrye:
That is a profoundly naive thing to say. Percentage wise, Bush 43 is far worse than Obama, and a lot of the complaining is because we had to have a stimulus that was funded by debt. Call Keynesianism garbage if you want, but that stimulus likely saved us from another Great Depression.
Also, there has been a huge falloff in revenue that Republicans won’t even think of addressing. I happen to think that raising taxes right now would be a mistake (as are the spending cuts the Republicans are pushing for), but no one can seriously claim to care about the deficit while also refusing to consider tax increases.
I happen to think that the Tea Party is a reaction to Obama’s ambitious agenda — which included Obamacare and the stimulus — and his race. Did debt factor in? Yes, but it is only one component.
Health care and high-speed rail is a scam? How so? Just because you do not like it does not make it a scam. War on the other hand has some shady deals going on. Tax cuts to the mega wealthy looks more scammy Is that a word? You have no problem with those. Compromise is the democratic way without it the United States falls apart. And we take others down with us.
Terrye,
The vast majority of the deficits going forward come from Bush policies and obligations. The bush tax cuts and the wars in Iraq and Afghanistan accounted for over $2.6 trillion of our national debt by the end of 2008 and, if continued, will add another $7 trillion in debt by 2019. The facts do not match your ideology.http://www.cbpp.org/cms/index.cfm?fa=view&id=3036
I`ll bet the car salesmen love these people who can be sold these junkers just by looking good and saying all the things that make them feel good. When all is said and done They still go home with a junker.
I wonder if, years from now, the House Republicans will come to be looked on like Arafat walking away from the Camp David negotiations in 2000. Being offered a once in a lifetime oppurtunity and turning it down out of shear stubborness.
terrye:
3/4 of the debt Obama inherited was created under these three presidents: Reagan, Bush and Bush. Reagan tripled the debt. GWB almost doubled it. I have mentioned this before, but I guess you never noticed. Or maybe you think that Reagan, Bush and Bush were Democrats.
The GOP is packed with people who became born-again deficit hawks on 1/20/09, after napping for thirty years.
I like this part:
Yes, the GOP has “produced budgets.” The Ryan budget increases the debt by about $6T:
So borrowing abother $6T is OK, but only if Republicans do it. Why? IOKIYAR!
Surely someone who was actually thinking like an adult (or hell, even an educated teenager) could put forth a better argument than this…
“… If the Democrats had not driven up debt to such outrageous levels there would not have even been a Tea Party movement…”
Yes indeedy…that’s why the Tea Party was such a major force against Bush and his tax cuts…wait…er…I mean…
The Tea Party is Dick Armey and the Koch Brothers, afraid of a rapidly changing demographic and an increasingly diverse nation, stirring up the sentimental emotions of elderly white suburbanites. Nothing more. Nothing less.
@Terrye:
Wait… I thought the Tea Party was not against the Democrats… Right? I mean all the tea party people talk about how much they were protesting GW’s economic policies… Right? Because it was more than just an arm of populist republicans…
Are you suggesting that *gasp* I’ve been lied to about the independent make up of the tea party?
*shock*
*horror*
If we didn’t get involved in overseas conflicts, our debt would take care of itself very nicely, thank-you. But perhaps that’s what the Tea Party is suggesting – immediately cease funding all overseas military expenses?
Certainly defaulting would go a long ways towards eliminating the US as a superpower, and help usher in a new era where China is seen as the trustworthy economic standard – again, quite possibly what the Tea Party wants?
@Rob Prather:
Bush was awful, but it’s a bit early to compare him with Obama, especially given what I will charitably call difficulties passing a budget for 2011.
This isn’t surprising.
For decades among the country club right there’s been the mentality of “I’d rather starve than accept 2/3 of a loaf of bread”. Mostly it’s a function of privilege and immaturity.
But that’s just it…a lot of the energy behind this isn’t coming from the country club right (on the contrary, the money types would prefer a deal), but rather, from the Tea Party crowd…
It’s not the first time a movement has gotten away from the rich people who created it.
The true believers are willing to die for a cause their handlers just backed for short term political reasons…
@Stormy Dragon: Yeah, but the House Republicans will end up killing far more innocent people than Arafat could have dreamed of.