How High The Debt

It didn’t require prescience to write, as I did recently, that the “fiscal cliff” alleged crisis was a dress rehearsal for the fight over the debt ceiling. We’re no longer talking about a mere government shutdown. We had one of them with the Gingrich Congress in 1995 and survived nicely. Anything unresolved on January 1 could have been corrected retroactively. But now we’re talking about the United States defaulting on its debt for the first time in its history. Should this happen the consequence would be domestic and international monetary anarchy.

Contrary to what I had implied, I now see the Republicans as having no leverage in this matter. What may now seem like the party’s slow death throes would become instantaneous with default. It would not be a “hail Mary” pass with which the team behind could win with luck, but a kamikaze attack where everyone loses.

The word “compromise” has a legitimate place in how we incur the expenditures that comprise our national debt. But it has no place in whether we honor it, unless we are willing to accept Third World status. International faith in our credit is such that we are now able to borrow money at virtually no interest. This privilege would disappear overnight if we become deadbeats.

What has yet been barely mentioned is that the biggest losers from default would the barons of finance. The threat to their portfolios does not come from Democrats or what is left of establishment Republicans, but from fringe Tea Party types who were put in Congress by Wall Street money and can be removed the same way. Or maybe they could get belated Christmas presents. Rumor has it that politicians can be bought.

The game of fiscal cliff has been played and Republicans did passably well considering the hand they had dealt themselves. But if the president means what he says that was the final game. There are only fifty two cards in the deck and the credit of the United States, to which one might add integrity, is not one of them.