Republicans double down on debt ceiling

It's been a couple of weeks since I wrote about our local GOP candidate for Congress Mark Amodei and his politically opportunistic attempt to shed his moderate past and prove he's just as crazy as the other Tea Party people by declaring he would vote against raising the debt ceiling.

It appeared then that Amodei might just be taking this position because it's politically popular, but also knowing that the fight over the debt ceiling will probably be over before the special election, or that his vote wouldn't likely be the one that decides the issue. It showed him as someone without principle, who would take a position he has to know is economically reckless in order to score political points.

But since then, other Republicans have pushed the debt limit rhetoric off the political cliff, going beyond pledges not to vote for it, but actually hoping that the limit will not be raised at all.

Presidential candidate Tim Pawlenty said this week, “I hope and pray and believe they should not raise the debt ceiling.” Fellow GOP candidate Michele Bachmann equated not raising the debt ceiling to "tough love" and said, “Don’t let them scare you by telling you that the country’s going to fall apart.”

It's as though a sort of political mob mentality has set in, as each Republican tries to push the rhetoric further toward insanity.

It's looking like Republicans in the House and Senate have backed themselves into a corner that makes any deal to raise the debt limit impossible. This puts the GOP in a very bad position if the debt ceiling isn't raised. While they downplay the effects of this action, there's no escaping what this would mean, and who will get the blame.

Unable to borrow any money, the U.S. Government would have to cut spending by about 40 percent, and would have to do this immediately. Just the logistics of such a large, swift cut are crazy. What do you cut? Do you cut Social Security checks by 40 percent? Do you lay off 40 percent of our armed forces? Do you tell all the air traffic controllers and food inspectors to go home? Do you stiff government bond holders and send interest rates for everyone through the roof? Do all these Congress Critters get their paychecks cut by 40 percent?

But wait, it actually gets worse. There are costs that come with cuts. If you lay off a large number of federal workers, the government will save very little money immediately because it will have to pay out unemployment benefits for these workers. If you cut Social Security payments, there would be a flood of people applying for food stamps to stay alive. So, the cuts the government would actually have to make are likely to be above 50 percent to stay within the legal debt limit.

The spending reduction we are talking about is equal to about 11 percent of the Gross Domestic Product. If you reduce GDP by that amount, then we are talking about negative economic growth that hasn't been seen since the Great Depression. The last time that happened, it crashed the economy of the entire planet. The fact that this cut would have to be immediate makes it even worse.

And that's just the direct effects. Indirectly, the money that the government pays out to people gets spent on goods and services all across the economy. You take this money away, and even those people who don't receive benefits directly from the government will be hurting. The ripple created in Washington will look like a tsunami that threatens to swamp the rest of the world.

Is this what Amodei, Pawlenty and Bachmann really want to see happen? Do they think putting the country and the world into a full-on economic depression is going to help their electoral chances? Yes, the person in the White House usually gets the blame when the economy goes sour, but with so many top Republicans openly rooting for failure, do they think voters are too stupid to figure out who's to blame?

Much to the chagrin of liberals, the White House has even put Social Security and Medicare on the table in order to cut a deal with Republicans. But it seems clear now this was just a tool to set up the GOP to take the blame for this mess. The Obama Administration can now go out and say they offered up everything, with more cuts than the Republicans asked for, and still they said no because they wanted to protect loopholes for corporate jets and hedge fund managers.

The GOP took the debt ceiling hostage, but now they are faced with having to shoot the hostage and suffer the consequences of that action, or release the the hostage and lose face. Someone should have told Republicans that hostage taking rarely if ever pays off.

The Republicans have set themselves up to own this coming disaster. A part of me says we should let them have it. But another part of me worries about surviving the mother of all economic depressions.

Liberals have joked for a long time that Republicans want to bring us back the Stone Age. It may not be a joke after all. There's still a possibility that this issue will find a resolution that keeps the country running. In the meantime, I think I'm going to stock up on supplies in case it doesn't.