jan20-1981.gifLet’s say my grandmother is ailing and you have the medicine that can save her life. However, when I ask you to give it to me you refuse. So I whip out my trusty revolver and hold it to my grandmother’s head and say “Give me the pills or I’ll shoot Nana.” If you’re like me, this is where you might get confused. Why would he shoot his grandmother? Isn’t the whole point of this trying to save his grandmother? At this point you’d probably be forced to come to one of two conclusions – either I am crazy, or my actions betray a goal that may not be coterminous with what you thought my goals were.

Forgiving the imperfect analogy, I think the latter is what we should really start considering re: Republican intransigence in the summer’s debt ceiling debacle.

Let’s go back to first principles. Most people agree that if a government accrues too much debt, that is bad. Now if you asked me why, I would say that if a government one day accrues too much debt it will render itself unable to pay back said debt without creating large quantities of money, thus presenting a Sophie’s choice between default and ruinous hyperinflation, either of which would lead to a drastic decline in living standards and social unrest. And that’s bad! But that’s why threatening to default in order to reduce the debt seems crazy – default is the scenario you’re trying to avoid by reducing the debt! To threaten default in order to forestall default would be, legitimately, considered madness.

But what if your fear of debt accumulation was borne not of a fear of default but of a fear of a high level of taxation? Debt is an unusual category of government spending, in that it cannot be cut – it can either paid in full or cast aside in explosive fashion. You could argue (and I would) that cutting spending by, arbitrarily, 30% on things like Medicare, Social Security, or unemployment insurance would be disastrous – but you could do it! But you can’t just shave 10% off the costs of servicing debt – it’s all or nothing.

So let’s say you abhorred taxation above all else – that that was your primary principle. Well, when in power you might cynically commit to spending on a popular program and fund the spending with debt. But when you are one of a handful of pivotal negotiators in a dangerous game of chicken over defaulting on the national debt, you probably would refuse to raise taxes under any circumstances, even if that risked default. Why? Well, if you agree to raise taxes, taxes go up – your worst nightmare. If you play chicken well then maybe a deal can be struck that leads to an all-spending-reduction deal – optimal! But default?

mortgage-rates37.jpgWell, default is bad for children and other living things. But the immediate reaction of the government wouldn’t be a sudden spike in taxation – it would be a drastic reduction in spending as the market refused to fund it. And sure, you may have a terrible economic crisis on your hands – but the other guy is in power! So by the time the bodies are sorted out they’ll be tossed and you’ll get to shape the aftermath to your liking. And while many if not most people will end up poorer as a result, at least the dread nightmare scenario is avoided – nobody’s taxes need to go up.

I’m not saying this was exactly the thoughts of any individual person, but it does seem like the radical anti-tax ideology that governs the modern Republican Party made for a uniquely credible opponent in a game of chicken like the one we saw this summer.

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