The Kabuki Debt Dance

[The second installment of my weekly column]

I was certainly not the first person to call our recent Fiscal Cliff national "debate" a Kabuki dance (although I did call it that, back on December 18th, on the radio).  We all knew something important was at stake, with the cable news channels running live countdown timers to Taxmageddon and local politicians warning of the dire consequences to the local water supply if something called “sequestration” was allowed to happen.

As with that highly stylized Japanese dance theater, our periodic set-piece showdowns in Congress feature elaborate gestures, high drama, and rituals bizarre to the uninitiated, but no doubt as to the final outcome. 

The Fiscal Cliff Follies™ followed the familiar script and ended with the entirely anticipated outcome.  In a triumph of hope over experience, some of my friends on this side of the fence are gearing up for the next big fight over the National Debt Ceiling.  Already forgotten is the fact that the Fiscal Cliff was the direct result of the deal done to avert the last National Debt Crisis.  Although CNN has not yet begun its countdown timer, the “crisis” over the debt ceiling is expected to occur anytime from mid-February to early March.  Likewise, the recent deal postponed sequestration, the automatic budget cuts that were to have taken place on New Year’s Day.

The National Debt is a problem.  According to the US Debt Clock, our federal debt stands at $16.4 trillion, and we are already $billions above the legal “limit.”  The debt is beginning to dwarf our national economy, which stands at an annual $15.5 trillion in Gross Domestic Product.  (It is distressing to see the red numbers on the clock growing at a faster rate than the green numbers.)

Orange County Register columnist Mark Steyn is fond of describing America as the "brokest" nation in history.  He has a point.  In terms of absolute value, no society has ever attempted to function with a debt level as high as ours.  Relative to the size of our economy, it is looking worse and worse.  Although this data dates from 2011, it shows how the nations of the world stack up on the debt/GDP ratio.  Back in the halcyon days of 2011, the U.S. ranked a mere 38^th out of 150 countries.  With our current debt ratio, at about 107 percent, we would rocket up to rank among those European basket cases Ireland and Portugal. 

We have not yet reached the debt status of world leaders Greece (165%), demographic basket case Japan (205%), and all-around economic basket case Zimbabwe (220%), but we are closing fast.  We are heading down the road to Argentina, whose President has to charter a private jet for overseas trips, to avoid having her government-owned plane seized to settle unpaid state debts.

Make no mistake, in the end, Republicans will vote to raise the debt ceiling.  They will receive no meaningful concessions—on spending or any other issue—from the President in return.  Can anyone make a persuasive case for another possible outcome?

Others argue that Republicans should instead focus on sequestration, thinking that those automatic cuts (mostly to Defense) offer more leverage.

As Steyn argues in the column linked above, no deal will happen because the parties are not in agreement that a deal must be done.  He writes,

"The prevailing political realities of the United States do not allow for any meaningful course correction.  And, without meaningful course correction, America is doomed."

Democrats have no interest in spending less.  Republicans have no interest in taking the blame for a “deal” not getting down.  Result:  ceiling raised, spending increased.

In my recent adventures in electoral politics, I spent one afternoon engaging in Kabuki theater with even less uncertainty than the Debt Ceiling Crisis:  my endorsement interview with the Minneapolis Star Tribune editorial board.  On the way to their inevitable endorsement of my opponent, I was asked about the source of the Republican-Democrat gridlock at the legislature.  My answer was simple:  there is just no overlap between what the Republicans want (limited government-less spending) and the outcome desired by the other party (bigger government-more spending). 

Perhaps, back in the 1970s, the differences between the parties may have been ones of degree:  a little more or a little less, let’s split the difference.  Now the differences are ones of kind:  spending cannot be both greater and lesser, government cannot be both smaller and larger.  Until the electorate figures out which kind of government it wants (as it had done, unfortunately, in Minnesota) gridlock is the only possible result.

Bard professor Walter Russell Mead had some good advice about the last debt ceiling crisis back in the summer of 2011:  ignore it.  Mead wrote,

“The brouhaha over the coming debt meltdown has obsessed the media for the last two weeks.  Some of the most talented journalists in the country are trying to get the latest rumors and back stories about every step of the negotiations.

“My advice to anybody who tries to read the news seriously: don’t chase this ball.  The moment by moment twists and turns in this story might matter to day traders and other financial market players for whom rumors are news, but for the rest of us, no.

“You have limited time to follow the news and you need to use that time well.  Following every twist and turn of a story like this gets you nowhere.  Scan the headlines, keep up with the main thrust of affairs—but don’t be fooled into thinking those screaming headlines mean anything real.  Five minutes after the final vote on this thing, all the stories and scoops and inside details that everybody thought were so crucial will disappear and never be thought of again.

This isn’t signal; it’s noise.”

Take Professor Mead’s advice and skip the sturm und drang this go around.  Read a good book.  Figure our how to convince our fellow citizens what dire straights we are in.