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In the Budget Crisis...Just a Short Reprieve and Another Round Begins

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Message Seymour Patterson

So Congress kicked the can down the road and applauded itself for averting a potentially damaging debt ceiling and shutdown crisis that they themselves had everything to do with causing. Some Congresspersons were grinning from ear to ear about the shutdown--they could not have been happier. But you know what? Come January and February 2014, we will be back to square one. We can expect a repeat of this debacle, because a cadre of extremists in the House of Representatives did not come to Congress to legislate but to obstruct. Who cares that they enjoy an approval rating of 10 percent! Who cares if they have the distinction of being labeled "a do-nothing Congress"! They almost seem to relish the moniker and wear it like a badge of honor. Never mind that because of sequestration and the government shutdown many people (yes, the much maligned government workers) were furloughed and didn't know how they could pay their bills without a paycheck.

During the upcoming next installment of a Congress-induced crisis, Democrats and the President should display the same steely resolve they did this time around. They may not know it, but at least for a moment they succeeded in establishing a norm in Congress that blackmail is not a useful device to get what you cannot gain through normal political give and take--elections, legislations, and so forth. Unless you repeal (defund) ACA, unless you cut Social Security and Medicare, unless you cut top marginal tax rates on top income earners, unless you approve the Keystone XL Oil Pipeline, we will stomp our feet like petulant children and take our ball and go home. There is little statesmanship in that kind of behavior, especially when it is an abdication of responsibility to fund the government and pay its debt, since failing to do that can have long-term negative repercussions on the U.S. economy and its place in the global economy. Willful default sends the wrong message to the rest of the world and will test the centuries' old excellent reputation of the U.S. government for its "Full Faith and Credit" (Article IV, U.S. Constitution). What causes a run on a bank? Insufficient funds on reserve? Hardly. It is far more likely to be caused by a climate of fear generated among depositors who go to the bank to withdraw money and are told by the banker, "Sorry, come back tomorrow." By noon the bank could have a long line of depositors outside demanding their money. The Chinese hold about 1.2 trillion dollars of U.S. government debt. They don't want the Congress pussyfooting around with their money.

Something is rotten in Washington--to paraphrase the Bard in "Hamlet."

Maybe what has been going on these last five years is political theater on a grand scale, replete with hyperbolic rhetoric designed to dehumanize the political opposition. I am convinced that some of our representatives' lies would go undetected on a lie detector. That's because they conflate lies and truth, and have long since lost their ability to tell the difference. I am always willing and ready to listen to an assertion that is empirically supported: If you say Death Panels, prove it. If you believe Benghazi was a crime, prove it. If you believe the President is illegitimate, prove it. If you believe austerity works, prove it. If you think bombing Syria trumps the diplomatic solution of getting rid of their chemical weapons stockpile, then argue the case. But you would have to explain why starting another war is a good thing.

Yet, maybe none of this matters in the world of diplomacy. Maybe anything goes. Shakespeare wrote "Nothing either good or bad, but thinking makes it so." This is literary license, of course. But on the face of it the statement is absurd. If I think the world is flat, that does not make it so. Or if I think there's no climate change, that also does not make it so. It's certainly not difficult today to resolve the question of the flat earth. It's terribly more difficult, however, to deal with global warming, since people on either side of the debate have deeply held beliefs, even as it appears the great bulk of the scientific community has little doubt that the earth is warming and that human activity is significantly responsible.

According to Rep. Bachman the end is near. "End Times," she says. Apocalypse is here! Why? Because "Obama supports Al Qaeda." In some ways this is in line with people who say Obamacare will take away our freedom. Again, these statements might have come right out of the pages of standard political hyperbolic rhetoric; never really intended to be believed. Indeed, most of us don't believe them. Scientists tell us the end will come when our Sun goes supernova and threatens our goldilocks position in interplanetary space. But that event, the end, is a long way off--unless, of course, mankind hastens ultimate catastrophe by the misuse or overuse of fossil fuels to meet an increasingly growing energy demand. I take heart, however, that there is hope for mankind.

In a recent trip to Addis Ababa I observed that people were not coughing, wheezing, or sneezing as much as I recalled from previous visits. I could breathe without inhaling an ever-present cloud of noxious brown fumes. I asked what had happened. The answer: the government is committed to reducing pollution in the city by introducing unleaded gasoline and the accompanying technology, that is, catalytic converters on vehicles. Kenya and Tanzania among other African countries appear to be following suit. This is a small-step (minuscule in the grand scheme of things) effort to reduce pollution. I remember when the U.S. initially attempted to force catalytic converters on vehicles. The reaction against it was predictable--claims that it would put an end to freedom, increase costs to business, produce tyrannical government, and so forth. That reaction came from the same political party whose virulent disdain for the Affordable Care Act brought on a shutdown and took us to the precipice of default. Despite our position on the Kyoto Protocol on climate control, there is still time to mend our ways and do the right thing.

We seem destined to reprise the inanity of the shutdown and the debt ceiling showdown in a couple of months. I can't help but cringe at the thought of another fight on the same turf to achieve the unachievable. Meanwhile, as these skirmishes flare up, real people suffer. Alert! Government workers are real people, too, with bills, despite what some people think of them.

This is a fight that will create a climate of uncertainty that advocates of certainty should want to avoid. They have been telling us--often without proof--that it is a climate of uncertainty caused by the debt and the deficit that discourages business investment and prevents economic growth. I won't disagree that businesses have had every reason to be uncertain about the future and that, as a result, they have not been investing or fostering economic growth. Why should they release the scads of money they are holding on to to produce more goods they can't sell?

But, maybe businesses are holding on to this money for reasons that have very little to do with the debt or deficit. Their reluctance to invest might instead have everything to do with the SNL-like skits Congress has been putting on over the past six years. How could threats of shutdowns and defaults possibly make businesses feel more certain? This is the kind of counter-intuitive thought process that blows the mind.

I suspect that perpetual internecine squabbles over funding the government and paying its bills can only lead to the very climate of uncertainty that austerity-focused groups fear the most. So why do Congressional Republicans insist on doing seemingly contradictory things? And why do they keep up the charade of voting to repeal the Affordable Care Act 43 times?

One must ask, Why would smart people embark on a fight to defund the ACA, when they already know what the outcome is going to be? Yet, after a series of clear defeats, the GOP is resolved to continue the fight to undermine the law.   Marco Rubio says he did not want to shut down the government, but voted against reopening it. Now the GOP is signaling that they are not going to give up on the effort to undermine the ACA, rather than try to make it better. But this time they'll shift gears and focus on the glitches in the computer system. They are obviously relishing the glitches, seeing them as an opportunity to accomplish what has heretofore failed.

Maybe I should stop worrying about these politicians who have lost their way in extremism. Maybe there are greater mysteries to worry about: Is there life after death? Are humans alone in the universe? Ruminating on these questions might be more satisfying than trying to comprehend the intrigues of American-style hardball politics and the representatives we send to office.

The problem, however, is that what politicians do affects us all in direct ways: the national parks get shuttered, retirees worry about getting their social security checks, and foreigners who lend us money wonder whether they'll get their money back. When you cut $40 billion in the Food Stamp Program, about 4 million people are affected and many real children are harmed. Isn't there a paradox here? Why would you want to target vulnerable children with cuts to save money, in order to address different strategies for dealing with economic and political questions?

The underlying motive for such draconian behavior lies in the belief that austerity, balanced budgets, and privatization are needed for economic prosperity. I could easily refute each of the rationalizations for punishing the poor. Instead, I will question the efficacy of privatization as a vehicle for prosperity.

Support for privatization rests on the belief that business managers are ipso facto superior to government managers. It also assumes that privatizing Social Security, Medicare, the Post Office, prisons, and even some aspects of the military would lead to more efficient management. It ignores, of course, the recent catastrophic business failures of ENRON and Lehman Bros., the EXXON Gulf oil fiasco, the mortgage misbehavior of J.P. Morgan Chase, and the financial games played on Wall Street that led to 2008.

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Seymour Patterson received a Ph.D. in economics from the University of Oklahoma in 1980. He has taught courses and done research in international economics and economic development. He has been the recipient of two Fulbright awards--the first in (more...)
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