That has implications, not just for the debt ceiling, but for a whole range of problems. Republicans have a decent shot of taking the White House and the Senate in 2012; by throwing that away with both hands they also throw away their best chance at repealing ObamaCare before it starts irrevocably altering health care markets. They also ensure that any deficit-reduction deal we do post election will be heavily weighted towards tax hikes; give Democrats a fresh crack at all the bits of the Obama agenda that they ignored in favor of passing health care; and probably let them preside over a mid-decade recovery that will leave the GOP in a very difficult electoral position in 2016.
The GOP will have taken a chance at meaningful entitlement reform and a mostly-spending budget deal, and thrown it away for literally no gain. Anything you can achieve by simply saying no, they can undo by simply persuading voters not to re-elect you. And the 1996 experience suggests that this will not be hard for them.
Does that mean that I’m shilling for the Democrats and saying you can never cut spending? Hardly. But you cannot cut spending by 40% in the middle of a recession. Throw out any metaphors you have in your head about families or CEOs. The political system doesn’t work like that. Neither voters, nor other congressmen, are children or employees who can be dictated to.
If we had to cut spending–if no one would lend us any more money–could we do it? Definitionally, yes. But it would mean an enormous amount of real suffering: homeless families, hungry old people, nursing homes closing their doors to indigent patients. And the fact that we could do it if we had to doesn’t mean that we can therefore do it when we don’t have to. If you try to artificially create a situation that requires drastic cuts, voters are going to get rid of you, not the spending.
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