As Ed thoroughly outlined this morning, one of the fiscal-cliff contingency plans Republicans have reportedly been considering as an option would be to agree to Obama’s tax hikes in order to avert going over the cliff, and instead hold out for substantial entitlement reform next year using the debt ceiling as leverage.
But that is an entirely childish, irresponsible, unacceptable plan — sanctimoniously says the guy who has already received six debt-ceiling raises and is currently running the country at a trillion-plus deficit every single year.
Citing what he acknowledged were unconfirmed reports of Republican thinking, the president said “the thinking is the Republicans will have more leverage… and they will try to extract more concessions with a stronger hand on the debt.” But, he told the business leaders, “I have to just tell you. That is a bad strategy for America. That is a bad strategy for your businesses and it is not a game that I will play.”
Calling the last debt battle in 2011 a “catastrophe” that led to the lowering of the nation’s credit rating and stalled economic recovery, he said a repeat of that battle would cause great uncertainty around the world. “There is no uncertainty like the problem if the United States of America, the largest economy, the world’s reserve currency, potentially defaults on its debts.”
He added, “If the Congress in any way suggests they are going to tie negotiations to the debt ceiling and take us to the brink of default once again as part of a budget negotiation… I will not play that game because we’ve got to break that habit before it starts.”
No, no, no — a thousand times, no. A debt limit is good for a lot of things; most notably, forcing you acknowledge when you’ve spent too much money. Just eliminating the debt ceiling so we can all live in a la-la-land without spending limits is going to solve precisely zero actual problems, because the problem of the debt ceiling is unconditionally preempted by the problem of our gaping debt. The debt ceiling is meant to be a mechanism to force tough political battles and “hostage-taking,” for goodness’ sake — how can the president stand there and say with a straight face that haggling with the debt ceiling is a “bad strategy for America”? You know what else is a bad strategy for America? Having $16 trillion in debt and only having plans to increase that number.
Of course, the president would really rather not pay any political prices for the trillions of dollars he’s wracking up, so here’s another great idea for him: Why not require the credit-card industry to eliminate credit limits? That way, cash-strapped consumers can just keep spending consequence-free, no matter how much Obama’s policies perpetuate only meager economic growth! That can work, right?