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Posted at 5:31 PM ET, 01/ 3/2011

The coming 'insanity' over the debt limit

By Jonathan Capehart

Over at U.S. News and World Report, my MSNBC contributor colleague Karen Finney posits an intriguing theory. Republican leaders in the lame-duck session were more than eager to cut a deal with President Obama on extending the Bush tax cuts to get it off the table before the Tea Party-infused 112th Congress had to deal with raising the nation's borrowing limit. Why that breathing space was (and is) needed was on full display Sunday.

While Rep.-elect Allen West (R-Fla.) expressed conditional support for raising the nation's borrowing limit, Rep.-elect Mike Kelly (R-Pa.) said it would be "absolutely irresponsible." But Austan Goolsbee, the chairman of the White House Council of Economic Advisers, struck the right, you-can't-be-serious tone on ABC's "This Week."

This is not a game. The debt ceiling is not something to toy with....If we hit the debt ceiling, that's ... essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic.....I don't see why anybody's talking about playing chicken with the debt ceiling. If we get to the point where you've damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity.

Yep, he went there. And I'm glad he did. Now Speaker-designate John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) must ensure that insanity doesn't break out in their respective caucuses. In an interview with the New Yorker magazine last month, Boehner proved that he gets this.

"This is going to be probably the first really big adult moment" for the new Republican majority, Boehner told me. "You can underline 'adult.' And for people who've never been in politics it's going to be one of those growing moments. It's going to be difficult, I'm certainly well aware of that. But we'll have to find a way to help educate members and help people understand the serious problem that would exist if we didn't do it."

This isn't going to be pretty.

By Jonathan Capehart  | January 3, 2011; 5:31 PM ET
Categories:  Capehart  | Tags:  Jonathan Capehart  
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Comments

There has been a dearth of adult behavior in Congress for quite some time coming from both sides of the aisle. But any legislator willing to screw up the economy (it's peoples' LIVES, damn you!) to make political hay/score ideological points is beneath contempt. Given the extreme irrationality of many on the far right, you're correct, Jonathan--this isn't going to be pretty.

Posted by: post_reader_in_wv | January 3, 2011 6:15 PM | Report abuse

It may not be pretty but it is necessary since the Democratic controlled Congress ran up the debt to 14 trillion in just 4 years.

Posted by: drowningpuppies | January 3, 2011 6:17 PM | Report abuse

Jonathan you need to be abit more fair with your stories. Ironic to say that President Obama voted against "raising the debt ceiling" in 2006 and never did vote to ever raise it (he missed the other votes). Amazing to see that type of information is not included in your piece.

Posted by: bohratom | January 3, 2011 6:29 PM | Report abuse

We could avoid this fight and the crisis simply by eliminating the legal requirement for a debt ceiling . No legal requirement - no showdown - no possibility of default because there would b no cap or limits on our debt. that should relieve any anxiety on the part of our creditors.

Posted by: ejhickey | January 3, 2011 6:52 PM | Report abuse

No limits on our debt, how wonderful. I'm sure everyone carries 630% of their yearly income as debt (make $80k and owe $500k). At some point, fiscal responsibility must return to DC. Of course, it will have to be Republicans.

Posted by: kitchendragon50 | January 3, 2011 8:16 PM | Report abuse

Sorry to point this out Drowning Puppies, but didn't Bush take us into two wars and spend down Clinton's surplus? I believe that President Bush created such a large deficit all on his own... He simply got to leave town before the bill really came due.

Posted by: Rufusgoofus | January 3, 2011 8:23 PM | Report abuse

Wow. How quickly a conversation turns into one that reminds normal folks (such as they are) of the things that their grandmother told them. Don't cut off your nose to spite your face. If you don't raise the debt ceiling interest rates will rise so high that you've quickly turned a 14 trillion dollar deficit into a 16 trillion dollar deficit, not to mention having no sane country wanting to loan to the U.S. Why don't you just hold your breath until you pass out. It usually didn't work as a kid, but at least you won't make the disaster worse.

Posted by: Fergie303 | January 3, 2011 11:54 PM | Report abuse

So, hitting the debt ceiling would be catastrophic according to Austan Goolsbee. Well, the debt doesn't have to hit the ceiling. The ceiling is there to LIMIT debt because government is supposed to operate on its tax revenue. However, that little detail hasn't stopped politicians from borrowing. Surely, Mr. Goolsbee knows that the debt is too high now and needs to be reduced; not raised. Also, he knows that cutting spending will avoid more debt. But the administration doesn't WANT to cut spending. They have gotten away with a whole lot of spending and they like it. But it's not their money that they're spending. Somebody has to tell them NO.

Posted by: allamer1 | January 4, 2011 1:12 AM | Report abuse

@rufusgoofus wrote:
Sorry to point this out Drowning Puppies, but didn't Bush take us into two wars and spend down Clinton's surplus? I believe that President Bush created such a large deficit all on his own... He simply got to leave town before the bill really came due.
---------------------------------
He had a lot of help from the Dems, sorry to point that out.

Posted by: drowningpuppies | January 4, 2011 3:32 AM | Report abuse

Personally I really believe that Obama is doing his best. Given that he had a microchip planted in his brain at birth in Kenya so that when he grew up to be President of the United States he could be directed to hand the keys to the White House, and the black suitcase, over to Osama Bin Laden, he must duck away nights, put on his special tin hat, and free of his evil anti-colonial father's ghost's microwave control beam, plot to bankrupt the country so that on the day of the handover the Bank of America backed by the SHADOW BANKING SYSTEM, can step in to pick up the distressed assets cheap, start running the country again, and leave Osama and the Saudis with the bill for all the debt. Clever man.

Bully for Barak!!!

Course, when I take my tin hat off, my evil twin, possessed by the ghost of Ronald Reagan, whispers that Dick Cheney said, and our Constitutional Fathers agree (he asked them), that he proved that deficits don't matter, as long as you have a white boy signing the checks and the money is going to those wealthy enough to kick some of it back. Soon as a brother picks up the pen though, that's SPENDING.

But note that this second theory comes from my possessed evil twin, and so I am normally inclined to believe the first theory.

Wow, "the first really big, adult moment" for the Republican Dream Team according to the defacto political leader of the Republican Party. You couldn't make this stuff up.

Posted by: bawrytr | January 4, 2011 5:42 AM | Report abuse

I think its interesting that democrats and Obama in particular are making such a fuss about raising the debt limit, when Obama himself voted against raising it.

March 20, 2006: This was the last stand-alone debt limit vote on which then-Senator Obama voted. He was one of 48 members to vote against the increase, which passed with 52 votes.

He said: “The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign
that the U.S. Government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. … Increasing
America's debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and
grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”

Please Spin this.....

Posted by: blehugh | January 4, 2011 7:20 AM | Report abuse

This would not have been nearly as much of an issue if the Republicans had agreed to roll back the Bush-Boehner-McConnell tax breaks as they had voted they would do when they passed their flim-flam scam in 2001 and 2002. It also would not have been nearly as much of an issue had the Republicans not decided to pay for the war in Afghanistan and the war in Iraq, which contrary to Republican promises has NOT paid for itself, with a credit card issued by the Chinese and the Saudis.

Lindsay Graham's suggestion that older Americans could see their quality of life reduced so that Sean Hannity and Glenn Beck can get further tax breaks has not yet incurred all the derision it deserves.

Posted by: edallan | January 4, 2011 7:28 AM | Report abuse

Let us suppose that all your credit cards are maxed out and you have shown no responsibility to pay off your debt but continue to spend and borrow.
Is there a bank or credit card company in the world that would be willing to increase your credit to pay off your debt?
Responsible US citizens know the answer to this question, but the radical liberal elites in Washington, DC do not!

Posted by: rteske | January 4, 2011 8:21 AM | Report abuse

We're looking the wrong way as new economic growth has always been the only successfulway to reduce deficits. This will begin when we force industry and investors to again concentrate their efforts here and will only occur through each of us taking it upon ourselves to redirect our personal daily spending to again benefit ourselves and our apparently forgotten equal trading partners.

Posted by: reenie10 | January 4, 2011 8:53 AM | Report abuse

The ADULT thing to do is wait and see what the Republican plan is ... that is, let them keep those goodies coming to their constituents, once the spending authority runs out. After all, the more Republican a state/district is, the more reliant it is on Federal funds.

Posted by: AMviennaVA | January 4, 2011 9:07 AM | Report abuse

To all my liberal friends out there, I agree with you WE need to keep raising the debt ceiling as high as it can ever go.

However, along with that concession, for every dollar we raise the debt ceiling we need to also lower our SPENDING by three dollars. After a few years we can all start lowering the debt ceiling and everyone will live happily ever after.

Posted by: frankn1 | January 4, 2011 9:36 AM | Report abuse

Who's responsible for the deficit? Bill Clinton left G. Bush with a surplus, the first one since Lyndon Johnson, which GB turned into a $1 trillion deficit. Look it up if you don't believe me.
Playing games with the debt limit would be beyond insane.

Posted by: johnqpublic3 | January 4, 2011 10:41 AM | Report abuse

In the end, defaulting on the US debt is the only viable option.

Posted by: pmendez | January 4, 2011 10:57 AM | Report abuse

It's just fascinating to look at a pie chart of the federal budget and wonder where one might cut. Defense, medicare/medicaid and social security, debt service, make up the lion's share of the pie, more than 75% depending a little on how you slice it. Going to be interesting to see where they are going to cut.

The Founding Fathers got by without roads, and transport makes up something like 5% of the 25% of discretionary spending???? Or maybe we just shoot all the Liberals and save on Medicare and SS???

Or I know, we take all the Tea Party people cash them out of their retirements in gold, and ship them off to the Conservative Paradise on Earth:

Iraq.

Think of it, stuffed to the gills with fossil fuels, lots of heavily armed religious fanatics, almost no real government interference in much of anything really, no environmental regulations, abortions only by the smiling dude in the alley with the coat hanger, low or no taxes, they've been running a budget surplus I hear, lots of sand and palm trees and welcoming natives. Fannie Mae and Freddie Mac don't exist, no housing bubble or state support for the banking system.

It'd be perfect for George and Dick and Rush. They should definitely be in the first parachute drop.

America! Love it or leave it!!!!

Posted by: bawrytr | January 4, 2011 11:18 AM | Report abuse

Don't know much about the author of this article, but he must be a stranger to the internet since he apparently didn't know enough about it to do a simple search to find that Senator Obama voted against raising the debt ceiling in 2006 and skipped the votes entirely during the next 2 sessions in 2007 and 2008. Was he guilty of playing politics in these cases? He did raise some good points in opposing the ceilings, but I guess they would only apply to a republican administration. I don't recall anyone calling him on it at the time.

Posted by: frwilcox | January 4, 2011 11:57 AM | Report abuse

Roofusgoofus,

fwiw, there was NO "Clinton surplus". NONE. period. end of story. further, anyone who actually believes that there was a substantial surplus is to be pitied as a dunce of the first class. = what there actually was was a "projected surplus in the out years", which was wiped out by the events of 09/11/01.

also, GWB was NOT the POTUS who ran up the national debt to 14 TRILLION dollars (more "new debt" than ALL the other POTUS combined.) = you can thank Princess Pelosi, Harry Reid, BHO & the other DIMocRAT extremists/lunatics for that.
(i would say that the wild/stupid spending of the DIMocRATS over the last two years was like that of drunken sailors, but that would be "putting down" drunken sailors.)

yours, TN46
coordinator, CCTPP

Posted by: texasnative46 | January 4, 2011 12:51 PM | Report abuse

I am surprised that Goolsbee fails to admit that the brink of default has been an infrequent but real fixture in the nation's economic history.

On each occasion, the facing of the brink brought meaningful reform. Goolsbee's doom-and-gloom is as much political posturing as, well, er, Obama's swift pivot to a focus on jobs.

Posted by: Crmudgeon | January 4, 2011 12:51 PM | Report abuse

Time for another republican hostage taking. I remember a time when legislators did what was best and necessary for the country because that's what they were elected to do. Those days are long gone, sacrificed for power and party. Pathetic.

Posted by: notfooledbydistractions1 | January 4, 2011 12:57 PM | Report abuse

The rabid Republicans are running around like chickens with their heads cut off yelling and screaming "Cut Spending, Cut Spending, Cut Spending." Lets search for the orgin of this phrase, "cut spending." ----> Orgin: Old School, Nauseating Republican talking point used by Senator Bob Dole in the 1996 Presidential campaign. The term "cut spending" didn't help Bob Dole in '96 and it will not help Republicans today in the 112th Congress. House Republicans must learn to lead, follow or get the hell out of the way because we progressive Democrats will run rough shard over them in our zeal to fix what the Tea Party Republicans screwed up. We Democrats are the good hand people. America is safe under our control. Share the wealth, tax the rich, pay down the debt.

Posted by: ODDOWL | January 4, 2011 2:12 PM | Report abuse

Taxpayers need to start holding our Government RESPONSIBLE AND ACCOUNTABLE for the budget and debt.
If they have to raise the debt ceiling that's because they Mis-Managed the budget.
So, we need to put it back on Them.
When we have to raise the debt ceiling, that means every single government employee, from public union employees to members of Congress, takes a permanent 10% salary cut or whatever it takes to reduce it.
Don't you think that will motivate government to think twice before Spending our Taxdollars, if they know there is a Consequence? They need to Feel the Pain.

Posted by: ohioan | January 5, 2011 11:24 AM | Report abuse

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