It's gamesmanship to the fiscal brink
Monday, October 14, 2013 5:00 PM
WINNEMUCCA - Is anyone keeping score on who's winning in the federal government shutdown?
Is Rep. John Boehner up today, or did President Obama and Sen. Harry Reid score the latest political points?
The American people as a whole don't appear too impressed with the impasse over a federal spending plan. The NFL's ratings surely continue to top those of CSPAN, I'm guessing.
An NBC News/Wall Street Journal poll released Sunday indicates that 60 percent of Americans would fire the entire Congress at this point, including their own representatives. The 60 percent figure is the highest-ever for that question recorded in the poll and has steadily ticked up for weeks.
Now two weeks into the stalemate, the government shutdown hasn't really interrupted the lives of local residents. It's a little late in the season to visit Yosemite or Yellowstone, both of which are closed. If you're a federal employee, you're on furlough with pay and waiting. BLM, USDA and Forest Service business is backlogged.
The other, more pressing issue is raising the debt ceiling beyond the $16.7 trillion mark so the government can borrow and pay its bills. That is where the gamesmanship could lead to brinkmanship.
Washington is inching closer to the threat of the U.S. defaulting on its debt for the first time in history, a precedent that could have unknown and dire consequences. If the American public is apathetic now, it won't be if politics pushes the country back into recession.
Actually, the world is taking notice of the potential for U.S. default. Five years ago this month, to be exact, the U.S. financial system all but collapsed, leading to severe fiscal pain around the globe. Who wants to risk a repeat of that for political points?
The unfolding of the Great Recession was a crisis only a select few saw coming. The majority were transfixed by their ever-increasing paper wealth as the bubble expanded. Then the housing market imploded, credit markets froze, banks wouldn't lend to each other.
Those heady days of "irrational exuberance," as Warren Buffet put it, came to a sudden stop. We heard phrases like credit default swap and derivatives for the first time.
I don't think Congress will allow the country to default so that a few lawmakers can continue to play a game of chicken in Washington. It's too dangerous, for one, and it won't play well politically on Main Street if Wall Street tanks and Social Security checks bounce.
The memories are too fresh, too painful from the crash five years ago, when the average person saw 40 percent of their wealth in 401(k) and retirement accounts evaporate in days. In the years since, frugal savers haven't earned anything on their money as the Federal Reserve pumps money into the economy to prime the liquidity pump.
Playing games with the debt ceiling and the potential for default is foolhardy. The economy has not fully recovered from 2008. The jobs are not back to pre-recession levels. Housing prices are coming back slowly. A doctor might diagnose the economy as still showing symptoms of anemia.
The International Monetary Fund expressed worry over the weekend about the gridlock in Washington. The Chinese, who hold a lot of American treasury notes, will have something to say about a default.
As the deadline nears to raise the debt ceiling, there's still time for at least a temporary borrowing bill to buy some time, which is the reasonable thing to do.
Who will come out as the winner in this D.C. debacle? It certainly won't be the American public.
Steve Lyon is editor of the Humboldt Sun. Contact him at firstname.lastname@example.org.