This is not about what would happen if the United States defaults on its debt. This is about what happened in 2011 when a party just threatened to let this happen.
A Democrat, Barack Obama, was president, and for some crazy partisan reasons, the Republican leadership saw fit to play games with the full faith and credit of the United States. Would the crash in the economy not sully the record of a Democratic administration and reward us at the polls? That’s what they seemed to think.
Well, the deadlock on the debt ceiling scared the markets so much that the S&P 500 index fell 7% in one day, wiping out $ 1 trillion from Americans’ net worth. Consumer confidence has collapsed to a low not seen since the dregs of the financial crisis a few years earlier.
As an added bonus, the specter of a major political party questioning America’s willingness to repay money owed prompted Standard & Poor’s to withdraw America’s triple A credit rating. We still haven’t got it back. Casting doubt on our willingness to repay investors has since cost the US Treasury about $ 19 billion in higher interest charges.
By the way, nine countries have triple A ratings. These are Australia, Denmark, Germany, Luxembourg, the Netherlands, Norway, Singapore, Sweden and Switzerland.
Republicans are starting over. As Senate Minority Leader Mitch McConnell said dishonestly, irresponsibly and treacherously, “There is no way the Republicans will help increase the Democrats’ credit limit.” I’ll spare you his blah-blah-blah about socialism or that raising the debt ceiling “would help China.” Rest assured that China rejoices at the shameful spectacle of national dysfunction.
About money owed: We are raising the debt ceiling to pay for expenses already authorized, not future expenses. And much of the spending and debt Republicans are now denouncing was theirs, supercharged under former President Donald Trump’s “I’ve Always Loved Debt.”
Under the Trump administration, the ratio of US debt to the size of the economy exceeded 100% for the first time since World War II. And no, Trump’s tax cuts didn’t fail to pay for themselves, but actually inflated new deficits. Republican spending, meanwhile, came off the charts. And in those four years, Democrats have voted to raise the debt ceiling three times.
But what about the COVID-19 pandemic? Didn’t Trump just get the wrong business card? He was, although his clowning about the severity of the crisis and his inability to contain it forcefully compounded the economic damage. And remember, Obama also received the wrong card: he inherited a smoldering crumbling economy, thanks to his Republican predecessor.
It’s crazy that Congress even has to vote on this, but when it comes to raising the debt limit, lawmakers just have to do it. The debt ceiling has been raised 98 times since World War II. This has been done under Republican Ronald Reagan 18 times.
It may reflect the determination of the right to subject America to chaos all the time. But Republicans should drop the idea that playing chicken with the country’s creditworthiness is a political winner.
Americans weren’t amused by the stress and higher borrowing costs perpetrated by the madness of 10 years ago. And they didn’t blame the Democrats for it. The following year, Obama was elected to a second term, and Democrats won two Senate seats and eight House seats.
Republicans won’t win hearts by insisting they don’t have to help America pay off debt – especially since they’ve racked up so much.
Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at firstname.lastname@example.org.