When it comes to paying the nation’s debts on time, Rep. John Fleming (R-LA) prefers to trust his gut rather than heed the unanimous warnings of professional economists. “Economists, what have they been doing?” the three-term congressman said in the New York Times on Friday. “They make all sorts of predictions.”
“Many times they’re wrong, so I don’t think we should run government based on economists’ predictions,” Fleming added.
If enough Republicans share in Fleming’s denial of the blunt economic reality that a first-ever failure to fulfill spending commitments Congress has already made would be catastrophic for America’s finances and economic growth, they could induce a new recession. Several of the most prominent anti-spending extremists in Fleming’s party have acknowledged that fact in the past, including Sen. Pat Toomey (R-PA), Rep. Paul Ryan (R-WI), and leadership officials like Speaker John Boehner (R-OH) and his deputy Rep. Kevin McCarthy (R-CA).
The first time that Fleming’s mindset gained real traction within the GOP was in the summer of 2011. The resulting brinkmanship around the debt ceiling caused real economic harm even without an actual breach of the debt ceiling. Conservatives frequently warn that economic uncertainty is damaging when they argue against higher taxes on top earners or regulations of just about any kind, but Fleming and his fellow debt ceiling deniers seem blind to the spike in uncertainty they caused two summers ago. On top of that paralyzing jump in economic doubts, the 2011 episode produced the first-ever downgrade of U.S. debt by a major credit ratings agency. Standard & Poor’s was unequivocal in blaming its downgrade of America’s credit rating on the unprecedented political paralysis around something that had been routine and nonpartisan throughout the country’s history. The downgrade cost the country roughly a million jobs.
Raising the debt ceiling does not raise the national debt, but fighting over it does. The perverse outcome of the GOP’s 2011 fight over the ceiling was a nearly $19 billion increase in costs to taxpayers over the coming years due to increased borrowing costs stemming from the credit downgrade. Over the 50 years prior to 2011, the cap on borrowing had been raised nearly 80 separate times as necessary to allow the government to continue paying its debts. Nineteen of those hikes came with George W. Bush in the White House. Republican leaders broke that trend and deemed the country’s financial credibility and economic health “a hostage worth ransoming.” But while the GOP negotiating position inherently acknowledges that the debt ceiling must rise, the denial of economic fact promoted by Fleming and other ultra-conservatives seems to have boxed Boehner in politically. He reportedly proposes to force a default unless President Obama adopts the Republican position on essentially every issue.