government spending

When a very old matter of convenience becomes a contemporary pain in the butt strange things get said, people act peculiarly, and really stupid stuff happens.

Meet the debt ceiling.

Only in America.

The debt ceiling was introduced back in World War I as a convenience. The constitution, that fusty bedrock of American politics, gives Congress the right to tax and spend. So the debt represents the accumulated difference between those two things. We incur national debt because Congress, in its infinite wisdom, decided at some point in the past to spend money it wasn’t raising through taxes. Rather than have Congress run around and authorize borrowing regularly the debt ceiling was a way of handing the Treasury Department a kind of credit card. It could keep up with Congressional spending without having to seek authorization for new debt, and Congress could spend away happily without having to worry about actually raising the cash it needed for those programs.

There have been various technical changes to the way the debt ceiling works along the way, but things have been fairly settled since 1939 with no major tinkering by either political party. Since 1940 the limit has been raised fifty-six times Twenty-four times a Democratic administration, and thirty-two times under a Republican. The most number of changes per president? Well that’s a close call. Nixon, Reagan, and Bush jr. all compete for that title. All Republicans too.

Notice at the outset how this all started: during a war. The US Congress has never had much difficulty with rampant spending when it comes to wars. Looking back through history the need to finance wars has always been a source of tension between the central authority starting and fighting the war, and the folks paying for it. Indeed modern democracy largely came about because of the need for governments to have the broadest tax base possible to wage war. Without the need to raise funds many modern democracies would have taken a lot longer to extend voting rights than they did. It is a nice coincidence that widening the franchise also means widening the tax base. Or at least widening the tax base less controversially.

This is a major point to bear in mind: Americans have never had second thoughts about plunging into debt to wage war. The most indebted moments in American history, such as the late 1940’s, have always followed a war.

Sound familiar?

So giving the Treasury Department a great big credit card seemed sensible at the time. It saved time, effort, and allowed for the smooth operation of a crisis government.

Naturally the economy has grown a great deal since. There have ben many wars. There have been many other underfunded expenditures. There have also been the periodic outburst of fiscal folly. Add all that up and the debt ceiling has been bumped up against and thus raised many times. It may have rankled the fiscal conservatives, and it may have amused some of the more radical economists who don’t see the need for debt in the first place, but every time the need arose the debt ceiling was pushed up.

After all, this is America and a big war may be just around the corner.

Fast forward to 2011.

All of a sudden what was once a convenience became a major hurdle, hassle, and source of potential disaster.

The Republicans, as we all know, have become extreme. Their radicalism spills out especially when confronted with their continual failure to persuade voters to give up the safety of the New Deal and Great Society entitlement programs. It rankles radical right wingers no end that their fellow citizens seem to like the protection of government provided insurance against sickness and poverty in old age.

So the right has to get their way through the backdoor. First they worked to defund government by cutting taxes and then proclaiming the national coffers insufficient to pay for the safety net. This was a winner. Indeed Obama has just signed onto to this program by making the Bush era tax cuts permanent for 98% of voters. Both our major parties now agree that defunding government is a top priority.

The second tactic employed by the extreme right has been to refuse to pay the nation’s debts. This is despite the fact that the debt originates inside the very Congress doing the refusing.

This is akin to a scorched earth defense. Or perhaps it is more like threatening a hostage with an atomic bomb. By destroying the national budget the thought – if there is thinking going on – is that the threat of such drastic and catastrophic action will force the majority to comply with the extremists radical requests. The US constitution does a great job of protecting minority interests, but it does so by exposing the majority to being bullied by those minority interests. It protects the majority much less well.

The radical right is not large enough, nor strong enough, to get its way democratically. So it has to resort to hostage taking and outright bullying. They may think they are standing on principle, but they are assuredly ignoring democracy. Profoundly so.

The key point is simple: the debt reflects the will of Congress through time. It has nothing to do with the President. Using the debt limit as leverage to force action that the electorate just manifestly rejected, a few short weeks ago no less, does shocking violence to any sensible interpretation of popular constitutional government.

Further, the constitution explicitly calls for the national debt to be honored. So by threatening not to pay the debt the extreme right is trying to get what they cannot achieve through constitutional means unconstitutionally.

This is wicked and bizarre.

It also demonstrates how disjointed our political landscape has become since the rise of the radical right.

As ever, there are loopholes. Obama could declare the debt ceiling unconstitutional since it represents a clear limitation on the government’s ability to abide by the stricture to pay the national debt embodied in the constitution.

Or he could authorize the minting of platinum coins. Yes he could. It is one of those truly silly loopholes, but it exists. The Treasury has the authority, already, to mint platinum coins of whatever denomination – they are supposed to be collector’s items. But one such coin for, say, a trillion dollars safely deposited at the Federal Reserve Board would safely allow the government to fund all those Congressional spending programs. Congress could then tie itself up in knots discussing those programs and whether the extremists should be able to bully the rest of us.

Unfortunately our President is gutless and seems determined to allow the extremists to dictate the national agenda. So I doubt we will see either of these loopholes exploited. At least yet.

But we can hope.