If Republicans are able to block raising the debt ceiling, the American government and financial system could be crippled by October.
On Tuesday, by a strictly partisan vote, the House of Representatives approved raising the debt ceiling. Now it’s up to the Senate, where 10 Republican votes are needed in addition to 50 Democratic votes, but the Senate minority leader is refusing to cooperate.
We are heading straight for an impasse and the consequences could be catastrophic.
An Absurd Law
Without a doubt, one of the biggest absurdities of American economic policy is this 100-year-old law forcing Congress to periodically legislate raising the debt ceiling, which will soon reach $29 trillion, and which is increasing about $4 billion to $5 billion a day.
It’s not the level of debt that is alarming — the American economy can easily support that — but if the American government stops borrowing, its activities will be crippled and the financial system could plunge into a crisis like the one in 2008.
Since the debt ceiling increase is already included in the fiscal policy adopted by Congress, this vote is redundant. Historically, approvals were almost automatic, until Republicans in Congress used it as a tool of extortion in dealing with President Barack Obama.
1-Way Blocking … and Expensive
For decades the Democrats always consented to this form of debt relief for Republican presidents, even Donald Trump, but the Republican Party today seems willing to plunge the country into a crisis just to embarrass its opponents.
Theoretically, Democrats could raise the debt ceiling without Republican votes, but they maintain that they do not want to carry the weight of this debt alone, since it is the result of policies that were adopted by both parties in the past.
This fruitless confrontation will poison the atmosphere for another week. Even if the markets remain optimistic for now, there could be a panic if everyone remains in their camps.
Twisted Partisan Environment
Tensions had already reached their peak surrounding negotiations on the Biden administration’s physical and social infrastructure programs. This blocking of a normally routine vote just throws gasoline on the fire.
The Republican Party, which seduces voters by saying that the government can’t do anything (and they really try to demonstrate that when they are in charge), seems to have no scruples about torpedoing the economy for their own partisan ends.
In this completely twisted partisan environment in the United States today, the worst thing is that the Republican Party continues to pass for a legitimate alternative party, even if it is ready to unleash an economic cataclysm in order to pave the way for the return of its cult leader.
We shouldn’t be surprised by this since we see the leaders of this party putting thousands of human lives in danger in order to attract a partisan base that is completely unhinged.