By Taylor Marvin
The US hit the debt ceiling today. Megan McArdle does a good job of outlining why this type of behavior is so dangerous in the long run, even if investors still seem to be very confident about the safety of US debt. However, her attempt to depict congressional Democrats as equally responsible for the failure to raise the debt ceiling isn’t convincing:
“They could almost certainly get a deal by agreeing to cut spending later in exchange for borrowing now, They don’t want to because this would be politically unpopular, and also, they have an ideological commitment to higher spending that looks very much like the GOP’s ideological commitment to lower taxes.”
Is there something I’m missing here? Democrats have historically been open to some degree of spending cuts, especially reductions in military spending, while Republicans are attempting to leverage their ability to hold the debt ceiling vote hostage to extract larger legislative concessions than normally possible for a minority party. While Republican leaders certainly admit in private that a failure to raise the debt ceiling could be dangerous, a refusal to even consider revenue increases has been the core Republican fiscal position for decades. Only if a refusal to automatically acquiesce to minority party brinkmanship constitutes ideological commitment are Democrats equally responsible for the debt ceiling impasse.