Forgive Us Our Debts

In anticipation of the president’s scheduled 11 a.m. news conference (coming up in a few moments), let me briefly break radio silence regarding the debt crisis to make several points:

First, I’ve been reluctant to post on the issue primarily because it’s not clear to me that the political science literature has any more to say about the specific negotiations and related policies issues (although  John Sides is always useful to read) than do the usual policy talking heads.

Second, far too much of the media coverage has focused on the strategic dimensions of the on-going negotiations (who is bluffing?), and on the political implications of the various potential outcomes.  While not denying that the current debate is driven in part by partisan and personal calculations, it seems to me that one cannot evaluate those dimensions without some discussion of what’s on the table.  What is each side proposing?  Alas, beyond some aggregate numbers and broad policy outlines, there’s been very little detail provided regarding the various options under discussion. Ultimately, however, what gets negotiated will largely determine who gets credit, and blame.

Third, there will be no default come August 2.  Whether it is a “grand bargain” (highly unlikely) or some short-term fix that involves a combination of accounting tricks, a short-term extension of the limit, or even the political gimmick floated by Senator McConnell, in which he in effect offered to give Obama the power to raise the nation’s borrowing authority – provided Republicans get to vote against it – the debt limit will be raised.  It is too late, of course, to actually write legislation to solve the debt crisis before the default deadline, so a permanent fix is unlikely, unless it comes in the form of a broad outline of a legislative agreement.

Finally, assuming a quick fix that addresses the debt issue in stop-gap fashion (that is, in a way that gets us through the next election), I don’t think this current debate will prove very salient in the runup to 2012.   It will be trumped by the jobs issue and a debate over the economy more generally.

I’ll try to devote a more extended discussion of the issue after hearing what the President has to say.


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