The government has been shut down for two weeks, and the prospect of default and resulting economic chaos is on the horizon. There is no question the shutdown is damaging the recovery. We do not yet know how much damage, we just know damage is occurring. There is no question that defaulting on the country’s obligations would have severe, severe, severe economic consequences.
Can you imagine a sane businessperson hiring people or investing in new plant or equipment or really doing anything that might be even slightly risky right now? Of course not. A sane businessperson is going to wait and see if all of this causes demand to dry up (even more) or if we plunge into another level of this ongoing recession. (When the economy is slowly growing, but all of the gains are going to the 1 percent, doesn’t that mean it is still a recession for the other 99 percent?)
In spite of promises not to negotiate with hostage-takers, now there are reports of a negotiated deal to “kick the can down the road” for a few months. In other words, the hostage will stay tied up in the basement, but won’t be shot right now. The pressure is off today and the kidnappers know that negotiation will happen and ransom will be forthcoming a few months from now.
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OK, then. So let’s go back to the previous question. Can you imagine a sane businessperson hiring people, investing in new plant or equipment, or really doing anything now knowing that all of this starts again in a few months? Of course not. So the recovery is frozen for the time being.
A “deal” that kicks the can down the road means the ongoing economic harm just keeps harming for the next few months, and then maybe gets worse. And it means the hostage-takers can just do the same thing again, and then again, and then again.
We can’t support any deal that institutionalizes this tactic.
Republicans should fund the government and promise not to ever, ever do this again. To prove they mean it they should repeal the law requiring a vote to raise the debt ceiling. We the People have taken away all of the power of the Republicans except one – the power to destroy. We have to take that power away from them, not just kick it down the road.