Monday, August 01, 2011


I'm extremely grateful for the presence of Paul Krugman -- on TV and at The New York Times, he's the guy who's been absolutely right about the consequences of our godawful response to the financial crisis, and I'm sure he's 100% correct now about the dire consequences of the debt hostage deal.

But I disagree with him about this:

Did the president have any alternative this time around? Yes.

First of all, he could and should have demanded an increase in the debt ceiling back in December. When asked why he didn’t, he replied that he was sure that Republicans would act responsibly. Great call.

The president was naive if he thought everything would work out, but that doesn't mean he could have gotten a debt ceiling increase back then. Republicans always have an eye for the main chance -- do you really think they didn't know at that time what a trump card they had?

There are two possibilities. The more likely possibility is that they simply would have refused to address the issue in the lame-duck session under any circumstances, because they knew how much leverage it gave them going into 2011. The less likely possibility is that they could have been persuaded to bargain, but the price would have been steep. Remember how they threatened to block everything else in the lame-duck session if Democrats tried to decouple Bush tax cuts for the wealthy from the cuts for everyone else? Do you think they would have just shrugged and said, "Oh, yeah, sure" on this?

I assume the cost of getting a debt-ceiling increase in the lame duck would have been, at minimum, no extension of unemployment benefits, no New START, no repeal of Don't Ask, Don't Tell, no 9/11 first responders' bill, and no food safety bill -- and an extension of all the Bush tax cuts. That's how Republicans roll. Total war, all the time.

What was Obama's leverage? Even if he were a lot better at using the bully pulpit than he obviously is, there was no urgency then -- there were months to go before the debt ceiling had to be increased. Republicans would have said, "What's your hurry?," and they would have gone all Eddie Haskell and said they certainly wouldn't dream of threatening the full faith and credit of the United States, so what was the president worried about?

And appealing to the public wouldn't have helped -- all through the current hostage crisis, the public was extremely skeptical about the advisability of raising the debt ceiling at all.

So even if he'd been a good card player, I think he always had a weak hand on this. In 20/20 hindsight, the time to raise the debt ceiling was before Scott Brown got elected -- and even then, who knows if Blue Dogs in the Senate would have united with other Dems to prevent a filibuster?

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