Continuing in the spirit of self-preservation, the Republican controlled House allowed a vote Wednesday to suspend the debt ceiling limit until May. Perhaps they are catching on to Louisiana Governor Bobby Jindal’s recent advice: “We’ve got to stop being the stupid party.” Exactly how they are going to do that remains to be seen, but at least they are avoiding general enmity for the moment. They are still holding the debt ceiling hostage, but are at least giving “him” food and water for a few months.
Other fiscal shinaningins will take place between now and then, but they can wait while we try to better understand the tug of war since it is likely to continue throughout this presidential term. As much as I don’t want to study the matter, and you probably don’t want to read about it, I feel compelled to for the simple reason that our inability to develop a fiscal path forward seems likely to sink us in upcoming decades, if not right to the bottom than leave our deck stranded along the water line.
To build a context for this debate, I suggest first looking at the seven minute video below by David Wessel, economics editor of the Wall Street Journal. His portrayal undoubtedly has critics from the left and right, but his outline of the issues has been praised by moderates on both sides.
While ostensibly focusing on the fiscal cliff, his points are relevant to the whole deficit/debt issue in terms of providing an overall snapshot. He states a number of facts that I find illuminating, which is what facts should be, of course, but these days they are more often manipulated to obscure like peas in a shell game.
A case in point. During the third presidential debate, Mitt Romney made a point that we have less ships in our navy now than in 1915, as if that meant anything. Obama’s derisive response stemmed from the fact that Romney was implying that it did (*1). The number of ships we have is not important; their collective fire power and relative dominance is. In that regard, “today’s navy is bigger than the next thirteen combined.” Now that is an illuminating fact in contrast to Romney’s misleading one.
And the light source just happens to be David Wessel’s book Red Ink: Inside the High-Stakes Politics of the Federal Budget.
The book, by the way, is only 162 very readable pages. If you read it, your expertise on these matters will largely match my own.
(*1) Part of President Obama’s irritation with Romney’s point about the navy’s size in 1915 may have stemmed from his apparently cribbing the line from Obama’s own Defense Secretary, Leon Panetta, who in defending the Defense budget had given the same misleading statement to Congress. (Red Ink, p. 90).