For the past few years, the Republican approach to governance has been to cause a series of Breaking-Bad-like cliffhangers, with ever-more destructive consequences. It has gotten so ridiculous that even the Peter G. Peterson Foundation, one of the tireless deficit scolds encouraging Republican behavior, has finally gotten tired of it.
This government-by-crisis approach has cost the U.S. economy about 900,000 jobs and raised the unemployment rate by about 0.6 percent, according to a study by private forecasting firm Macroeconomic Advisers, commissioned by the Peterson Foundation, of all things. Peterson continues to wax apocalyptic about America's long-term debt, but appears to finally have gotten disgusted with Republican tactics in dealing with it. (Story continues below chart.)
"Partisan divided government has failed to address our long-term fiscal challenges sensibly, instead encouraging policy that is short-sighted, arbitrary, and driven by calendar-based crises," Joel Prakken of Macroeconomic Advisers said in a press release. "One can only hope that our policymakers will implement more sensible policy in the future."
Sure, let's hope that, but the evidence is that House Republicans don't care at all about the damage they are doing, because they seem hellbent on doing far more damage. In its new study, Macro Advisers estimates that the government shutdown has already shaved about 0.3 percent from economic growth in the fourth quarter, consistent with an recent estimate by Goldman Sachs.
A short debt default -- which could be just short days away -- could cause unemployment to spike to 8.5 percent from 7.3 percent and cost 2.5 million jobs, Macro Advisers estimates. A longer default, lasting a couple of months, would cause an even deeper recession, pushing unemployment to 8.9 percent and costing 3.1 million jobs.
And all of this damage would come on top of what has already been done to the economy by Washington's Republican-driven obsession with debt and deficits in the past few years, even as the economy stumbled out of its worst recession since the Great Depression. To be fair, that obsession has been encouraged by Pete Peterson's perpetual deficit scolding and President Obama's arguable over-indulgence.
Maybe Obama should have spent more energy arguing, as his former adviser Larry Summers does in a Financial Times column on Tuesday, that the debt fight is exactly the wrong fight to be having right now. We should be talking about what more the government can do to stimulate the economy. Instead, the Republican deficit obsession, indulged too often by Obama, has led to the sharpest cut-back in government spending since the end of the Vietnam War. It has led to the economy-bruising payroll-tax hike and the sharp spending cuts of sequestration.
All of this has weighed on economic growth -- which in turn has made government finances worse than they needed to be. Macro Advisers estimates that the austerity of recent years has cut GDP growth by 0.7 percent and cost 1.2 million jobs already.
But that's to be expected: It's no shock that economic policies that shrink spending also shrink the economy. What is maybe more striking is just how much damage has been done simply by all the agita that Republicans have created in recent years. And even if we do get a last-minute deal to avert default this week, it will probably mean we'll get to have another destructive crisis in February.
Also on HuffPost:
Warren Buffett, Chairman And CEO Of Berkshire Hathaway
"The debt ceiling makes no sense anyway. If you're going to spend more than you take in, you're always going to have to be raising it," <a href="http://www.huffingtonpost.com/2013/10/07/buffett-debt-ceiling-bomb_n_4056861.html?utm_hp_ref=business" target="_blank">Warren Buffett told Fortune</a> in an interview in early October.
Tim Geithner, Former Treasury Secretary
"It would have been time a long time ago to eliminate it," <a href="http://www.huffingtonpost.com/2012/11/16/timothy-geithner-debt-ceiling_n_2147748.html" target="_blank">Tim Geithner told Bloomberg</a> TV in November. "The sooner the better."
Ben Bernanke, Federal Reserve Chairman
"I think it would be a good thing if we didn’t have [the debt ceiling],” <a href="http://washingtonexaminer.com/ben-bernanke-get-rid-of-the-debt-ceiling-it-has-no-practical-value/article/2518534" target="_blank">Ben Bernanke said</a> while speaking at the University of Michigan.
Larry Summers, Former Treasury Secretary
"I think that given that Congress has to approve all spending and all tax changes, there is not much logic to the debt ceiling," <a href="http://www.slate.com/articles/business/moneybox/2011/07/the_guys_who_sign_the_checks.html" target="_blank">Larry Summers</a> told Slate in an email.
Bruce Bartlett, Former Senior Policy Analyst And Treasury Official
"The debt limit must be abolished," Bruce Bartlett <a href="http://economix.blogs.nytimes.com/2011/08/01/doing-away-with-the-debt-ceiling/" target="_blank">wrote in the New York Times in 2011</a>. "While that is extremely unlikely at this time, it is nevertheless necessary. As the computer eventually learned in the movie 'War Games,' the only way to avoid disaster in this sort of game is not to play."
Ezra Klein, Washington Post's Wonkblog Editor, Bloomberg View Columnist And MSNBC Contributor
"We shouldn't suspend the debt ceiling for three months. We should suspend it forever, completely eliminating the threat that this hard, unpleasant, confusing vote could go wrong and unleash economic havoc," <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/22/suspending-the-debt-ceiling-is-a-great-idea-lets-do-it-forever/" target="_blank">Klein wrote</a> in a January piece entitled, "Suspending the debt ceiling is a great idea. Let's do it forever!"
Alan Greenspan, Former Federal Reserve Chairman
"I have a more <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/26/dont-just-raise-the-debt-ceiling-get-rid-of-it-forever/" target="_blank">fundamental question</a>. Why do we have a debt limit in the first place," <a href="http://www.nbcnews.com/video/meet-the-press/42632429#42632429" target="_blank">Greenspan</a> asked during a roundtable talk on Meet The Press back in April, 2011.
Richard Thaler, Economist And University Of Chicago Booth School Of Business Professor
"The debt ceiling is a dumb idea with no benefits and potentially catastrophic costs if ever used,” Richard Thaler <a href="http://articles.latimes.com/2013/jan/22/business/la-fi-no-debt-limit-20130123" target="_blank">wrote</a> in response to a poll, according to the Los Angeles Times.
Anil Kashyap, Economist And University Of Chicago Booth School Of Business Professor
“Deciding whether or not to pay the debts incurred to fund the previously approved tax and spending is nuts,” Anil Kashyap commented when asked by the <a href="http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_555sdN4BXmfNKCN" target="_blank">University of Chicago</a> about the necessity of a debt ceiling.
Robert Rubin, Former Treasury Secretary
"It's an anachronism," Robert Rubin said in reference to the debt ceiling <a href="http://www.washingtonpost.com/blogs/wonkblog/post/robert-rubin-the-risk-is-greater-today-than-it-was-in-1995/2011/05/09/AFlJqp5G_blog.html" target="_blank">during a 2011 interview with Ezra Klein</a>.
Paul O'Neill, Former Treasury Secretary
"It is hard to make a rational argument for the debt ceiling as it is now structured," Paul O'Neill said, <a href="http://www.slate.com/articles/business/moneybox/2011/07/the_guys_who_sign_the_checks.html" target="_blank">according to Slate</a>.