How the Wacko Birds are Destroying the Economy
Debt ceiling fights and needless deficit reduction are taking a huge toll on our economy.
Once again, Ted Cruz—and other right-wing Republicans—are making noise about White House concessions for raising the debt limit: “President Obama is asking Congress to give him a blank check to allow him to keep maxing out the credit card without doing anything to fix the problem. I think that’s irresponsible,” Cruz said this afternoon.
If there were a stand-off over the debt ceiling, it would be the third since Republicans took control of the House of Representatives. The first was in 2011, during the nadir of President Obama’s first term, and the other was last fall, during the government shutdown.
Both of these were needless fiascos that endangered our global standing and revealed the deep dysfunctions in our government. But what’s less obvious is the extent to which they were disastrous for our economy.
To wit, according to a new report from the Peterson Institute for International Economics, the threat of debt default—in addition to all of the fiscal uncertainty of the last few years—has increased unemployment by half a percent, or reduced the number of jobs by 750,000.
This includes the full range of needless economic damage. From sequestration—which, even in its reduced form, cost the economy tens of thousands of jobs—to cuts to food stamps and emergency unemployment insurance.
The easy response to all of this is to blame Washington for its needless bickering and inaction. And there’s no question that the various players have made huge mistakes and pursued wrongheaded policies, like the bipartisan drive for deficit reduction during Obama’s first term.
But if we’re doling out blame, the bulk should go to the Republican Party and its leadership. In a world where Republicans don’t control the House, there aren’t debt limit fights or government shutdowns, and the federal government isn’t slashing billions from anti-poverty programs while also blocking additional stimulus to the economy. This isn’t to say Democrats are perfect, or even optimal, but that there’s a real difference between imperfect solutions and absolute obstinance.
Or, put another way, in the five years since the economy collapsed into free-fall, the GOP has moved from opposing any efforts to fix the damage to pursuing policies and tactics that hinder the economy. And in the process, it’s left us with a slow recovery, mass unemployment, and too much economic pain.