House Republicans have been playing games with the nation’s debt ceiling for months, threatening to not raise it — and thus invite all of the adverse economic consequences that would follow — unless they receive various concessions from the Obama administration and Congressional Democrats, including cuts to Social Security or new constitutional amendments. But at the same time, the Republican leadership has been saying that failure to raise the debt ceiling would be, in the words of House Speaker John Boehner (R-OH), “irresponsible.”
But as Aug. 2 approaches, which is the date on which Treasury Secretary Tim Geithner estimates the U.S. will begin to default on some obligations, the Republicans have acted more reckless when it comes to the debt ceiling. Case in point, House Budget Committee Chairman Paul Ryan (R-WI) has outright called for the U.S. to go over the cliff and miss payments to creditors:
If a bondholder misses a payment for a day or two or three or four — what is more important is you are putting the government in a materially better position to better pay its bills going forward.
Several Republicans — including Sen. Pat Toomey (R-PA) and Rep. Ron Paul (R-TX) — have said default would not necessarily be bad thing. Others, like Rep. Devin Nunes (R-CA), have said that failing to raise the debt ceiling would bring on a “crisis,” but that such a crisis could be beneficial. But as The State pointed out, Ryan is “is the highest ranking Republican thus far to express support for a possible U.S. default.”
Ryan has changed his tune regarding the debt ceiling significantly over the last several months. Back in January, Ryan admitted that failing to raise the debt ceiling was “unworkable.” “Yes, you can’t not raise the debt ceiling. Default is the unworkable solution,” he said during an appearance at the National Press Club. Earlier this month, he began to take a more radical line, saying that the ceiling wouldn’t be raised without concessions from Democrats. “It won’t happen, I’m serious about this,” he said. Now it seems he’s gone full-in with the fringe of his party in actually inviting a default.
Yesterday, the credit rating agency Fitch warned that even a short-term default that resulted in some missed payments — exactly what Ryan is advocating — would do real damage to the U.S. creditworthiness. “If the Treasury missed a payment on its debts, even for a short period, Fitch would lower the nation’s credit rating — adding that it would be ‘unlikely’ the government could return to AAA after such a default,” The Hill reported.