Perhaps not surprisingly given the cast of bizarre politicians affiliated to the tea party wing of the Republican party who now sit in Congress a deal to raise the debt ceiling has still not been struck despite the fact that midnight approaches. A major part of the problem is the strategy of the radical right wing Republicans to try to blackmail the President and the Democrats to do lasting damage to the many positive programs that help the poor and the elderly and the moderate income access health care, retirement, education and employment in the United States. They are determined and dogmatically misunderstand the role of government in a modern democracy as a protector of both prosperity and community in co-operation with the private enterprise system. But unfortunately President Obama apparently has also made some errors in how he has approached these negotiations. By unwisely and prematurely promoting deficit reduction rather than job creation as his top priority he may well have trapped his administration into offering excessive concessions in order to win a deal with legislators who are only interested in damaging his Presidency and defeating him in 2012.
The veteran distinguished journalist Elizabeth Drew has written an excellent article that explores these questions which was published in the New York Review of Books on July 19, 2011 with the catchy title What were they thinking? Based in part apparently on off the record interviews with former Obama advisors she describes a presidential strategy driven by polling that focuses heavily on re-election in 2012 and winning the votes of centrist independents who favor fiscally conservative policies.
Winning is important but the point of winning is to implement positive and progressive policy. This is a key moment in the recovery where a great deal of harm could result from excessive budget cutting and substituting a supply side strategy when the lack of aggregate demand and liquidity trap circumstances are clearly the problem. Robert Reich has suggested that a face saving strategy worked out by Senator Mitch McConnell that raises the ceiling but permits tea party Republicans to register their disapproval without this negating the legislation will ultimately be the solution. Others have rejected this option and are now arguing a further compromise package will be necessary.
Whatever the solution under no circumstances should members of Congress assume that refusing to raise the debt ceiling won’t have significant negative consequences. The tragedy will be that they will be self-inflicted .