In December 2012, Planet Money co-host Adam Davidson stopped by the TED office to talk about the fiscal cliff. At the time, the U.S. Congress was weeks away from a deadline to set a course on federal debt, and head-butting was at a fever pitch. As Davidson explained, the disagreement was simple: Democrats see increasing taxes, especially on the wealthy, as the answer, while Republicans favor lowering government spending. In the end, the so-called cliff was avoided with a last-minute deal.
But this morning, with Congress unable to pass a new budget and the United States government shutting down all but “essential” services for the first time in 17 years, Davidson’s talk seems relevant all over again. We asked Davidson to tell us why this budget standstill is even more concerning than the last. Here’s what he had to say:
It is shocking and maddening to watch the drama in Washington. I’d say the core issues here remain the same. The shutdown doesn’t represent the will of any substantial number of Americans — it doesn’t even represent the will of a substantial number of Republicans in Congress. It is caused by a couple dozen Congress-people who seem to have painted themselves into an ideological corner from which they haven’t been able to find an escape. Or, in pursuing their own narrow self-interest they are hurtling the country towards pain. Or, maybe, they actually believe their nonsense. It doesn’t matter. Twenty people shouldn’t be able to cause this much damage.
The core issues are the same, but the stakes are much higher this time. One period of insanity can be dismissed as a one-off blip, but this is beginning to feel like a new, semi-permanent feature of American governance. That is very troubling. If we convey to the world and to ourselves that we will lurch from self-imposed crisis to self-imposed disaster, we are doing something no country has ever done, that I’m aware of. We are deliberately damaging our status as the world’s reserve currency and as the world’s least-risky economy. This isn’t something that will happen overnight, especially since there aren’t many obvious competitors for that status. But if this constant battling over the most basic requirements of Congress continues, it will happen and it will make us all poorer.
As strange as it sounds, I find myself in the bizarre position of rooting for some kind of disaster fairly quickly. It’s not that I want disaster, but something that happens quickly and so painfully that congress never goes back to these shenanigans again would be preferable to making these suicidal moves a regular feature of our country. Quick and painful might be better than slow and terminal. Of course, not doing this at all would be best.
There is one slight benefit to having this battle over funding the government this week rather than over the debt ceiling in two weeks. However damaging a short-term shutdown might be, failing to raise the debt ceiling would be truly disastrous. Hopefully, this episode will be so embarrassing for the Republican Right that they will not want to repeat it in mid-October.