Partisanship robs Congress of the opportunity to take a bigger bite out of the deficit

It’s now two weeks since Congress returned to Washington after its July 4 holiday weekend, forgoing plans for a longer vacation in apparent recognition that there was a looming crisis.

But in that time, there has been as much political posturing as negotiating. And some even continue to deny there would be serious consequences if the nation were to default on its loans.

The full faith and credit of the United States of America has been the gold standard for investors throughout the world for generations.

There is no question that this status has been abused. It made it too easy for the government to borrow money. And in recent decades, it made it too easy for our “trading partners” to dump their goods on U.S. markets, knowing that a U.S. government addicted to borrowed money would be happy to sell them Treasury notes.

But it also made it possible for the United States to gear up for World War II, and it was a huge part of the United States’ ability to emerge from that war to become, eventually, the world’s only super power.

An expensive pretense

It also allowed the nation to act like the only super power on borrowed money, fighting wars, maintaining a worldwide military presence and developing weapons systems unlike any others — all on 20, 30 and, eventually, 40 cents of each dollar spent being borrowed.

Nothing demonstrates the addiction to borrowed money that both parties have developed over decades as does the history of increases in the debt limit that were approved by a succession of congresses. While the party out of power has often taken debt limit votes as an opportunity to score a few political points, no congress has ever flirted with default the way this one is today. Republicans, whose presidents in the past doubled the national debt on their watches and/or have declared that deficits don’t matter, have suddenly found fiscal religion.

Since 1962, Congress approved 74 separate measures to raise the debt ceiling, including eight times under President George W. Bush, and once under President Barack Obama. Little by little — and sometimes by leaps and bounds — the limit was increased to its present ceiling of $14.3 trillion.

How much is that?

A graphic in The Vindicator the other day illustrated what an unfathomable number $14.3 trillion is. One example: it’s enough to buy an $1,800 computer for every person on Earth. Closer to home, it’s an average debt of about $45,000 for every man, woman and child in the United States.

Obviously that level of debt cannot be sustained, and no one — including President Obama — is saying that it should be. But we didn’t get into this state of indebtedness overnight (see reference above to 74 votes to increase the debt limit in the last half century), and we will not get out of it with a single vote.

While most congressional leaders acknowledge that default is unthinkable, it has now become popular for opponents of raising the limit to say the debt ceiling isn’t the problem: debt is the problem. Don’t raise the limit, they say, just cut spending. That’s like a doctor confronting an overweight man who is having a heart attack saying that it’s not necessary to treat the acute coronary, better to treat the patient’s chronic obesity.

Yes, the obesity will likely kill the patient in the future, but the heart attack will kill him today. Continuing to add to the national debt will undo our economy at some point in the future — maybe even within a few years — but not raising the debt limit in the next few weeks will be our undoing now.

Flirting with default through devotion to an ideology is insanity. Flirting with it for perceived political gain is the height of irresponsibility.

The fallout from default would affect short-term money and stock markets here and throughout the world, A double dip recession would be the best we could hope for. The long- term effect on U.S. standing in the world is incalculable.

An opportunity missed

It now appears that the most likely compromise is a pot of weak gruel being brewed in the Senate, first proposed by Minority Leader Mitch McConnell, and more recently endorsed by Majority Leader Harry Reid.

Its only merit is that it might avoid the catastrophe of default. But so much more could have been done if both sides had entered the negotiations with everything on the table.

Taking a $1.5 trillion bite out of spending as this plan would do when it would have been possible to take a $3 trillion or $4 trillion bite out of future deficits through a combination of spending cuts and tax revisions, is a testament to how dysfunctional politics has become in Washington, D.C.