Thursday, October 17, 2013

Reprieve ... but at what cost?

The hostage drama has ended, for now. Republicans in the House of Representatives have lowered their gun, agreeing not to pull the trigger for another three months, at least. We've got a reprieve on the government shutdown and on the threat of default,... for now.

But at what cost?
Containers of goods idling at ports. Reduced sales at sandwich shops in downtown Washington. Canceled vacations to national parks and to destinations abroad. Reduced corporate earnings forecasts. Higher interest payments on short-term debt.

Even with the shutdown of the United States government and the threat of a default coming to an end, the cost of Congress’s gridlock has already run well into the billions, economists estimate. And the total will continue to grow even after the shutdown ends, partly because of uncertainty about whether lawmakers might reach another deadlock early next year.

A complete accounting will take months once the government reopens and the Treasury resumes adding to the country’s debt. But economists said that the intransigence of House Republicans would take a bite out of fourth-quarter growth, which will affect employment, business earnings and borrowing costs. The ripple from Washington will be felt around the globe.

“We saw huge effects during the summer of 2011, with consumer confidence hitting a 31-year low in August and third-quarter G.D.P. growing just 1.4 percent,” said Beth Ann Bovino, chief United States economist at Standard & Poor’s, referring to earlier brinkmanship over the debt ceiling. “Given that this round of debt ceiling negotiations” took place during a shutdown, she said, “the impact on the economy could be even more severe.”

And we get to do this all over again in three months!

Our economy took a huge hit from this two years ago, the last time Republicans took us to the brink of default. It has taken another huge hit this time. (Yet you can bet those same Republicans will campaign on how anemic the economic recovery has been, the next time they're running for re-election.)

This is also the full faith and credit of the United States they're playing with. The American dollar is the world's reserve currency. It's as good as gold, worldwide - better, because it's far, far more stable than gold. Despite the hysteria from right-wingers about America's budget deficits, American government bonds are the choice of safety and stability not just for senior citizens here, but for cautious investors around the world.

But for how long? Will Republicans even have to force default in order to destroy the full faith and credit of the United States of America? Won't these repeated threats, these manufactured crises, these continuing demonstrations of politics over country have the same effect, eventually?

Here's Sen. Elizabeth Warren:
I'm glad that the government shutdown has ended, and I'm relieved that we didn't default on our debt.

But I want to be clear: I am NOT celebrating tonight.

Yes, we prevented an economic catastrophe that would have put a huge hole in our fragile economic recovery. But the reason we were in this mess in the first place is that a reckless faction in Congress took the government and the economy hostage for no good purpose and to no productive end.

According to the S&P index, the government shutdown had delivered a powerful blow to the U.S. economy. By their estimates, $24 billion has been flushed down the drain for a completely unnecessary political stunt.

$24 billion dollars. How many children could have been back in Head Start classes? How many seniors could have had a hot lunch through Meals on Wheels? How many scientists could have gotten their research funded? How many bridges could have been repaired and trains upgraded?

The Republicans keep saying, "Leave the sequester in place and cut all those budgets." They keep trying to cut funding for the things that would help us build a future. But they are ready to flush away $24 billion on a political stunt.

So I'm relieved, but I'm also pretty angry.

We have serious problems that need to be fixed, and we have hard choices to make about taxes and spending. I hope we never see our country flush money away like this again. Not ever.

It's time for the hostage taking to end. It's time for every one of us to say, "No more."

Amen. But will it end? 144 Republicans in the House of Representatives (and 18 in the Senate) still voted to default on our debts, at the end. That's almost two thirds of the Republicans in the House! It was a minority of Republicans who joined with the Democrats to end this debacle.

Note that Republicans control the House as a minority party. In the last election, Republican candidates received more than a million fewer votes than their Democratic opponents, overall. But they've gerrymandered election districts so badly that they were easily able to stay in power anyway.

Those people are unlikely to give up trying to force their wishes on the American people. And the rest of the Republican Party went along with them, right up until the very brink of default, until polls showed how disastrous that was going to be for their whole party.

But for individual Republicans, it's just the reverse, at least in the House. Because of those gerrymandered election districts, it's the sane Republicans who are under threat of losing their job, the sane Republicans who are threatened with a primary opponent from the Tea Party. (That's why Republican Senators - yes, those people who've been filibustering everything - were actually more reasonable than their colleagues in the House!)

Gerrymandering election districts didn't just guarantee the House for the Republicans, it gave the craziest Republicans a real advantage (well, that and the GOP's notorious 'Southern strategy' of deliberately wooing the crazies).

My point is, this has cost America bigtime,... and it's far from over. We've a three-month reprieve, yes, but that's all. Oh, it's much better than actually defaulting on our debts, but these repeated political games may well have the same effect, eventually. And it's already meant a huge cost to real Americans.


jeff725 said...

To paraphrase what you said, it's a win....for now. But if you would permit me a moment of light celebration of a win over the Tea Party:

And this is for Jody P:

WCG said...

OK, yes, it's a win, and we should celebrate. I don't mean to be such a downer, Jeff.

Of course, I have to point out that William Wallace ("Braveheart") was eventually captured by the English, hanged, and drawn and quartered for treason. :)