by Wayne Besen • May 5, 2023 • Opinion, Politics • Comments (0) • 194

Republicans Hold the World Economy Hostage with Debt Ceiling Threats

Republican House Speaker Kevin McCarthy is threatening to not raise the debt ceiling. A new study by the White House Council of Economic Advisers found that if the debt ceiling isn’t lifted, we are likely to have a repeat of the 2008 Great Recession. Except, this time the devastation could be far worse.

Kevin McCarthy is a turkey that should not be playing chicken with the world economy.

The shocking report starkly warned:

The nightmare scenario of a “protracted” standoff over the debt limit — or one that lasts about three months — would lead to a 6 percent contraction in the size of the economy…The stock market would also fall by an estimated 45 percent.

If you don’t think this catastrophe would impact your life, you’re wrong. The report cautions that failing to increase the nation’s borrowing limit could wipe out more than 8 million jobs. This would cause an immediate halt in consumer spending and massive defaults.

If you’re a homeowner, you might not be able to pay your mortgage. If you’re a landlord, your newly unemployed tenants likely won’t pay their rent. The middle class would become poorer and the chronically poor could become destitute –which could lead to increases in crime.

This is a completely preventable tragedy. We are only in this situation because to win the speakership, McCarthy made radical promises to extremists like Marjorie Taylor Greene, Lauren Boebert and Matt Gaetz. McCarthy doesn’t care if 8 million Americans lose their jobs if he keeps his.

I blame the media for the political standoff. Many reporters and pundits—especially on TV– are economically illiterate. They don’t understand that we raise the debt ceiling to pay America’s bills from laws that have already passed. This isn’t new spending – it’s simply paying for items America already bought or programs we promised to fund.

If we don’t pay our bills, the world loses confidence in America’s word and questions our financial and political stability. Without confidence, you have economic catastrophes, such as recessions and even depressions. Our country is barely recovering from Covid, and this is the last thing we need.

Speaker McCarthy is saying that Republicans won’t raise the debt limit unless Biden agrees to trillions of dollars in cuts. Unfortunately, reporters who don’t understand the issue are confusing the American people by asking the ridiculous question, “Why won’t Biden negotiate with McCarthy?”

Biden can’t negotiate because there is nothing to negotiate. What McCarthy is proposing is inventing a new, unstable budgetary process. In McCarthynomics, Congress passes laws and agrees to fund programs. Then they schizophrenically turn around and bizarrely threaten to not pay for the programs and laws they voted to pass.

McCarthy is no different than the bank robber handing the teller a note: “Give me the money or else.”

If Biden caves to McCarthy’s crazy demands, our entire system for passing bills and funding laws will unravel. Still, you have clueless media calling for negotiations, instead of excoriating Republicans for their extortion. Even threatening default could have catastrophic consequences. The report found:

“Brinksmanship” on the debt limit could cost 200,000 jobs. Refusing to raise the debt limit for even a week could cost 500,000 jobs.

The sick joke is that Republicans pretend they care about cutting costs but offer tax cuts to billionaires. They support corporate welfare and oppose hiring more IRS agents to collect taxes. So, Republican demands aren’t serious. It’s all about posing as tough for the MAGA mob.

I’d like to think that Republicans would come to their senses. But it’s difficult when virtually everything they say or do is senseless.