30
Jul
11

Unorthodox Debt Ceiling Lessons

I’ve been playing around with new ways to think about the debt ceiling debate. Here’s a recent article I wrote for PolicyMic on this subject, but here I want to say some other random things.

So far, I disagree with basically everything that’s been said about this month (?) long media/political event.

First, I want to go on the record and say that there will not be a default. People have tried to escalate the risk this time around, but I just don’t think it will happen. People have already cautioned that just because it would be stupid to not raise the debt ceiling does not mean it will be raised. True enough, but when the incentive system  is so clearly and robustly in favor of some result, one has to have a pretty sophisticated reason why we should worry in this case. I’m reading a book on negotiating and the author claims that 80% of concessions are made in the final 20% of the allotted negotiating time. Deadlines get things done.

Some people say that America looks stupid and why can’t we get this issue solved. I agree that America will look very stupid if we run out of money, but I don’t think it is at all stupid that we are having this debate and that both sides are trying to extract concessions from each other. Some people say that this is just “political theater” but I  am really growing to dislike that phrase. It’s often used to just stop caring about the debt ceiling altogether or worse, politics altogether. There is a theatrical element, but there is also the completely honest and genuine reason that some people in the house want lower spending and are willing to force a showdown to get that.

Also, I wonder if we have wasted more time whining about our politicians than anything else. How would a different media approach to this issue actually have CAUSED a different outcome. What if the media had just refused to report more than a few times a week about this (there’s no such thing as “the” media of course and collective action problems would make this unworkable)? Some of the “theater” would be gone and many politicians would be able to compromise more easily because the eye of the public would not be on their every move. Negotiations can easily obscure one’s role in the final product allowing various politicians (on both sides) to meet in the middle but still hide that fact.

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