Which makes it unfortunate that the online headline for that article is “Treasury making hard choices in case of default.” True, “Treasury making hard choices in case of failure to raise debt ceiling” would take up more space, but it would be more accurate.
I talked to a journalist on Thursday who was very concerned about the “dysfunction” in Washington. So am I. But I told her that the real problem is not the dysfunctional process that’s getting all the headlines, but the dysfunctional substance of governance. Congress and the president will work out the debt ceiling issue, if not by Tuesday, then by next Tuesday. The real dysfunction is a federal budget that has doubled in 10 years, an annual deficit of some $1.5 trillion, and a national debt bursting through its statutory limit of $14.3 trillion and approaching 70 percent of GDP.
We’ve become so used to these unfathomable levels of deficits and debt — and to the once-rare concept of trillions of dollars — that we forget how new all this debt is. In 1981, after 190 years of federal spending, the national debt was “only” $1 trillion. Now, just 30 years later, it’s headed for $15 trillion by the end of the year. So here’s a graphic representation of dysfunction:
Those are the kind of numbers that caused the Tea Party movement and the Republican victories of 2010. And many Tea Partiers this week have been reminding their representatives that they were sent to Washington to fix this problem. That’s why, for once, there’s a real argument over raising the debt ceiling. It’s going to get raised, but many of the Republican freshmen are determined to set a new course for federal spending in the same bill that authorizes another $2.4 trillion or so of borrowing.
And where did all this debt come from? As the Tea Partiers know, it came from the rapid increase in federal spending over the past decade:
Annual federal spending rose by a trillion dollars when Republicans controlled the government from 2001 to 2007. It has risen another trillion during the Bush-Obama response to the financial crisis. So spending every year is now twice what it was when Bill Clinton left office 10 years ago, and the national debt is almost three times as high. Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate. And yet many voters, especially Tea Partiers, know that both parties have been responsible. Most Republicans, including today’s House leaders, voted for the No Child Left Behind Act, the Iraq war, the prescription drug entitlement, and the TARP bailout during the Bush years. That’s why fiscal conservatives are looking very closely at the bills being proposed, most of which promise to cut spending some day — not this year, not next year, but swear to God some time in the next ten years. As the White Queen said to Alice, “Jam to-morrow and jam yesterday — but never jam to-day.” Cuts tomorrow and cuts in the out-years — but never cuts today.
If the “dysfunctional” fight that has sent the establishment into hysterics finally results in some constraint on out-of-control spending, then it will have been well worth all the hand-wringing headlines. The problem is not a temporary mess on Capitol Hill and not a mythical default, it’s spending, deficits, and debt.