The Democrats, both in Congress and in the punditocracy, have been trying their best to cast Republicans determined to enact significant spending cuts in conjunction with raising the debt ceiling as reckless. They’ve suggested the markets will freak (so far they are disguising their fright, however). It’s unthinkable that we should “default!” No one seriously thinks that’s a possibility, in part because we temporarily have enough “float” to keep the creditors happy and in part because the argument in Congress (as opposed to the campaign trail) is not whether to raise the ceiling, but how to do it.. As Veronique de Rugy wrote last week:
I understand the strategy that consists of making a risk look much worse than it is in order to get something you want, but Treasury Secretary Tim Geithner is really pushing it. On Friday, he sent another letter to Sen. Michael Bennet (D-Colo.) arguing that a U.S. default would cause a double-dip recession and focusing on the doomsday scenario if we default on the debt.
I wish he would stop. We know that the debt ceiling will ultimately be raised. The real question is which safeguards and reforms need to be put in place so that the United States gets off the unsustainable financial path it is currently on. Designing such reforms take time and there is no need to rush. . . .
I have said it many times, but I will say it again: While United States should not consider defaulting on its debt, Congress shouldn’t be forced to raise the debt ceiling under false pretenses. And here is the thing: There is absolutely no reason for the U.S. to default on its debt unless it would like to. The U.S. owns roughly $2 trillion in assets that it can use, in addition to $2.2 trillion in tax revenue.
The Democrats’ caterwauling is political, of course — meant to scare the voters and convince them how irresponsible the Republicans are. Well, it’s not working. The Post reports on polling showing the public stubbornly insists on focusing on the debt:
Among those who believe they are well-informed, 52 percent say they worry more about Congress raising the limit and permitting additional borrowing. By comparison, 37 percent worry more about the possibility of default. Those who consider themselves less well-informed are more evenly split, with 45 percent more worried about borrowing and 34 percent more concerned about default.
The partisan divides are even more dramatic. Republicans are more than twice as likely — 60 percent to 25 percent — to say their bigger fear is that raising the debt limit would lead to more spending. Democrats split 48 percent to 38 percent the other way, with default as their greater concern.
Independents — crucial to the reelection prospects of as many as a dozen Senate Democrats, as well as President Obama — tend to side with Republicans. Among independents, 49 percent say they worry more about additional debt, while 34 percent say their bigger fear is the risk of default.
It is encouraging that scare tactics are having less and less impact with the public. The voters have grown weary of professionally packaged hysteria and inactivity on the debt.