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Standing Up Against Debt Blackmail

Joe Conason on

While Speaker Kevin McCarthy demands transparency from the Biden White House, he has concealed crucial facts from the American public ever since he forged the "corrupt bargain" that greased his ascension to the constitutional post he now holds. The details of the agreement that allowed McCarthy to scrape together the barest majority are said to be set down in a three-page memorandum, which remains hidden.

What we already know, however, is that McCarthy arranged for ordinary Americans to subsidize his sleazy deal with the far Right when he promised to withhold approval of a higher debt ceiling until Democrats agree to enormous budget reductions -- including harsh cuts to Social Security, Medicare and Medicaid.

Unless Senate Democrats and the White House surrender to those absurd demands, and Senate Republican leader Mitch McConnell, too, House Republicans insist they will force the United States to repudiate its debts and wreck its credit.

Debt repudiation would have devastating consequences for the national economy, the global economy and America's position in the world. The only beneficiaries would be the adversaries of the United States. That much is obvious. And if it is, then aren't those politicians who constantly proclaim their own patriotism but seek to drive the country into ruin shouldn't even contemplate such acts -- unless they're not so patriotic after all?

The same Republican crazies say these extreme measures reflect their deep concern about budget deficits and the national debt. Their worrying would be more plausible if they had bothered to speak up on any of several occasions during Donald Trump's presidency when Congress had to raise the debt ceiling as a matter of course. Not once did Democrats ever whisper about blackmailing Trump over the debt increase. And not once did Republicans protest the Trump spending and tax policies that ballooned the debt by trillions.

Now, of course, Donald Trump is for welshing on the debt ceiling. This would not be the first time he has encouraged financial chicanery. Ask the CFO of the Trump Organization, Allen Weisselberg, who pleaded guilty to felonious fraud in Trump's service and is now taking up residence on Riker's Island.

 

It is especially obnoxious for Trump to encourage a debt ceiling default when so much of the debt was incurred during his presidency. A higher debt ceiling isn't needed to enable future spending, but to cover spending that already occurred. Legal scholars would add that repudiating the debt would violate the Constitution, which protects "the full faith and credit of the United States," and the 14th Amendment, which stipulates that "the validity of the public debt of the United States, authorized by law... shall not be questioned."

Trump may believe a default wouldn't matter. After all, his deadbeat approach to business always involved shafting his creditors, walking away from his debts and escaping accountability through bankruptcy. That may be how life works for a small-time swindler, but it isn't what great nations do -- and the price would be unacceptably high.

The Republicans always say they want to operate government more like business -- but they didn't say they want to run it like Trump's crooked company.

For now, the Treasury can manage the debt ceiling by shuffling various accounts and delaying certain payments, even though the nation officially passed "Debt Ceiling Day" on Jan. 19. Sometime in the next several months a reckoning will loom.

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