06/01/2011 04:56 pm ET | Updated Aug 01, 2011

Playing Chicken With the Debt Ceiling

In the days before people could do anything "virtually" on the Internet, restless teenage boys used to play a game called "chicken" in which two contestants would race their cars directly toward each other. The first to swerve in order to avoid crashing was the "chicken" and loser of the game. No doubt there are still places in the world where teenagers vent their surplus testosterone by playing a similar game with real automobiles. However, even if there were no such place, the political leaders of the western world have rushed in fearlessly to perpetuate new versions of the same old game.

First the Republicans in the House of Representatives, under pressure from passionate new Tea Party members, insisted on substantial cuts in the still unapproved budget for the present fiscal year, which is more than half over, before they would agree to vote for a resolution to continue meeting the government's daily obligations. After weeks of rhetorical exchanges about how many tens of billions of dollars to cut out of federal spending for the balance of the year, and negotiating sessions behind closed doors that were designed to leak, the parties announced their agreement to "cut" the federal budget, by implication for the balance of this fiscal year (which ends September 30th) by about $39 billion. This was a surprising outcome, since the last time the Republicans had played this game, with Newt Gingrich driving them to a collision, the result was that the Republicans were simply crushed, like a compact car trying to play chicken with a truck on a one-lane bridge.

As it happens the $39 billion in cuts was more than ninety-nine percent political theatrics. A few days after the big deal was announced, the Congressional Budget Office, staffed by both parties, estimated that the actual reductions in spending this year would be only about three hundred million dollars, or less than one percent of the amount claimed. The rest of the $39 billion was all reductions in amounts that had previously been authorized, sometimes in times long past, but never appropriated for spending this year or any other year. Most of it, the Budget Office concluded, would never have been spent in any case. The good news is that there has not been even a small dent in the fiscal stimulus that the United States is getting and still very much needs just to keep the economy sputtering along at nine percent unemployment. The bad news is that there is a bipartisan, indeed an all-inclusive social consensus, to substitute make-believe and play acting for any depiction of real problems and issues, let alone solutions.

Now we have the spectacle of the Republican House saying it will not authorize an increase in the federal debt ceiling (which of course was predictable given the budget they passed six weeks ago) unless there are substantial additional "reductions" in spending. Again it would seem to be an uneven game between a truck (we must honor our obligations and maintain the high credit worthiness of our country) versus a motorcycle (we must start cutting our multi-trillion dollar deficits a little bit at a time or force a default on the government debt or an interruption of Social Security payments by stopping that truck). Those of us who think we are still living in the real world are left to hope that there will be no collision with possibly devastating effects on the still wounded national and global economies. At the same time we know full well that if the collision is avoided it will be with yet another theatrical concoction, purporting to show that Obama has again made significant concessions to hasten the day of a balanced budget (with, of course, no new taxes).

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