Don't Call It a Debt Crisis

For once in American politics, the nation is focusing on a serious political crisis. Republicans have used their control over the U.S. House to demand massive cuts in American investment, a budgetary result of their program of massive tax cuts for the massively wealthy.

Republican intransigence on the budget has caused a political crisis. This political crisis will make it impossible for the federal government to pay its creditors starting on August 2nd. This is not truly the same as a 'debt crisis' that CBS labels it. The CBS poll finds that 71% of Americans disapprove of the "handling of debt ceiling negotiations" by congressional Republicans. Not all of the disapproval is coming from the political center, either. 51% of Republicans expressed disapproval of Republican negotiators. There is broad dissatisfaction with the negotiations in general (of course, negotiations at a standstill should be unpopoular).

The Republican attempt to use the debt ceiling as a hostage in an attempt to enforce conservative ideological orthodoxy on the American public isn't going well for them. Their base appears splintered (CBS hasn't released ideological crosstabs, but I see no reason why Republican moderates have a monopoly on disapproving of the congressional negotiators; far right conservatives may also be disapproving in reaction to the prompt of "negotiating" in the question wording.

Regardless, the public is distinctly upset with the Republican tactics. They are creating a debt crisis by putting America through a political crisis of choice. Boehner and the Republican leadership could end this "debt crisis" by bringing to the floor a bill that would either expand the debt ceiling or abolish it completely. After all, what point is there in constraining the treasury's ability to pay the government's tab, when Congress is legislating more drinsk and hors d'oeurves? Referring to this situation as a "debt crisis" glosses over the purely engineered nature of the problem. If Republicans succeed at passing massive spending cuts or triggering defaults, we would have a debt crisis. In the first case, the spending cuts would plunge the economy into a depression, bringing in less revenues and placing a greater demand on federal and state entitlement programs. That would cause a debt crisis. With the default path, in which Republicans continue their intransigence and fail to raise the debt ceiling, bond markets might panic. The costs of our outstanding debt would skyrocket. That would bring the stagflation trap that deficit cutting is 'designed' to prevent. It also isn't happening at all currently.

The economic crisis that America faces is a manufactured product of Republican politics and policies. It's not a "debt crisis." It's an electoral one. If we had a parliamentary system, this would be an excellent time to let the citizens decide the government's direction for the next two years and send Congress to a reelection campaign. Business groups are starting to turn against the GOP, recognizing that a failing economy would provide an even worse business environment than a slowly recovering one.