The drama of the government shutdown and threatened default on government obligations is entirely unnecessary. It is also harmful to the people of the United States. Government workers and contractors are idle and without income. Their communities feel the economic impact. The threat of a default is stalling investment and hiring across the country. And, the world watches and judges as Congress engages in its dangerous games.
The overarching threat is an incremental shutdown of all government services beginning on October 17. Either the debt ceiling is raised, something that's been done 78 times since 1960, or the Treasury department begins paying debts from government funds on hand until that money runs out. It's not that we lack the money. This is a tantrum, pure and simple.
The impact of a formal default is unknown but the consensus opinion is that its somewhere between a continuation of the dreadful recession and something much worse. The head of Deutsche Bank described a default as a "rapidly spreading disease." A group of leading bankers asked the German banker how to deal with a default. He responded: "I have no recommendations for this audience about putting band aids on a gaping wound.
The United States dollar is the dominant world currency. U.S. Treasury Bonds are viewed as the safest investment in the world. A threat of default on bonds and action that destabilizes the dollar is incompatible with our special status in the world financial community. The last time Congress had a debt-ceiling crisis, 2011, the barely noticeable economic recovery was stalled and stocks dropped 20%.
Over the past two weeks, we've seen the pathetic dramatics of a collection of con artists known as the House Republicans. They know that they've voted on bills to purchase goods and services and that raising the debt ceiling is the only way to pay the bills. Now, they are saying they won't pay by refusing to raise the debt ceiling. This is bait and switch - promise to pay for something and, once you get it, refuse to pay. It's fraud, pure and simple.
Worse yet, the Speaker of the House, John Boehner, created a House rule that makes Republican Majority Leader Eric Cantor (R-VA) the only member who can break the logjam.
The Democrats share some of the blame. President Obama was so busy trying to play warrior king by bombing Syria, he neglected to make the case to avoid this crisis. House Democrats brought up a discharge petition but need Republican signatures to have an impact. Already, several of the twenty or so Republicans who claimed they wanted to end the deadlock have backed away from the petition.
The outcome of this disgraceful, deceitful, degrading behavior will all be at our expense.
The members of Congress won't lose a thing. They'll have their salaries, their health care, and their free travel. Their retirement will be untouched. They will raise funds to pay for their campaigns. They'll sit fat and happy in their homes collecting favors from their donors and dispensing benefits from those donors to their friends and family.
They don't care. They don't have to.
The mess we're in and the failures to follow due to the gross incompetence and corruption of our (s)elected representatives are all at our expense.