Alright, back to work after a week at the beach…Hmm…Errr…Do I really have to? I mean, there are times–almost always, in fact–when work is the most fun I have in life. I’ve had the privilege of a front row ticket for the world’s best ongoing drama, the saga of the United States at its apogee. Now, though, I am just not looking forward to watching the Debt Ceiling disaster movie unfold. It is, at once, the clearest decision about the future of the country we’ve had in some time–and a complete waste of time and energy better spent on finding a way out of our economic morass.
The clarity of the choices is stunning. There are six:
1. You can just vote to raise the debt ceiling, which is what we’ve always done in the past. This would make ultimate good sense in a faltering economy. Our most immediate need–as opposed to the long-term need for deficit reduction–is to find some way to goose the economy. This can take the form of an old-fashioned jobs program (though I’d hope it would be better thought out than our last
road-paving, errr, stimulus program). Or it can take the form of new tax cuts. This option is by far the most sane, but it is off the table because…
2. You can put together a couple of trillion dollars in spending cuts, which is what the Republicans want to do. The troubles here are multiple: you can’t really put together a couple of trillion in spending cuts unless you gouge old-age entitlements. The public is simply opposed to this. The Democrats, desperate for a handle on the public, want to exploit its opposition to Medicare and Social Security cuts in the 2012 elections.
3. You can put together a couple of trillion in spending cuts (focusing on defense and cats and dogs) and revenue increases, which is what the Democrats want to do. This is more supple than the Republican idea, but still wanting–it doesn’t address the long-term problem of entitlement spending for the retirement of my fat, happy Baby Boom generation. We are, however, significantly under-taxed, given the array of services we demand. And a return to the Clinton tax rates for the wealthy would be a step in the right direction, as would be the closing of various tax loopholes that promote economic inefficiency (the over-pricing of crops, the over-profiting of oil). Or…
4. You could do a grand compromise–the $4 trillion deal that President Obama and, until last night, Speaker Boehner were seeking–that would involve the best elements of points 2 and 3 above. This could also include some tax lowering, especially in the corporate sector, as proposed by the President’s deficit commission–with the reductions funded by closing loopholes. This sort of agreement would provide an enormous burst in optimism–on Wall Street, on Main Street, around the world–that might provide the psychological jump start that the economy needs. It would also provide a major boost for the President’s reelection prospects, which is why he favors it…and why many of the less honorable Republican candidates are opposing it. (Kudos, by the way, to Mitt Romney and Jon Hunstman for not bending to their party’s lemming-like Norquistism.) It is now apparent that this option is dead.
5. You could refuse to raise the debt ceiling and stop paying some of our bills. This would set in motion the exact opposite psychological effect as Option 4. It would damage the notion of the United States as a serious country, for a very long time and perhaps permanently. It might also do damage, long-term, to the notion of democracy as a efficacious way to run a government. We will have made a national, democratic decision to jump off a cliff.
6. You can cobble together some sort of short-term settlement that will keep this depressing ideological standoff front-and-center for the foreseeable future. This will have the psychological impact of a mild dose of Option 5–feeding the growing pessimism about this country’s future. But it will also guarantee that the 2012 election will be a referendum on this issue. The more I think about it, the more attractive this option seems–although still immensely less preferable than Option 4: it is well past time for the public to send a clear message to the politicians about which path they want the country to take.