Thursday, July 28, 2011

Debt Ceiling "Crisis"

[The following is a print version of the audio podcast available in iTunes or by download (click the title of the post)]

This week, we look at Mark Hyman's commentary on the debt ceiling "crisis" (suggestion for discussion: this issue is neither about the debt ceiling nor a crisis--discuss).

I continue to play around with format.  This time, in both the print and podcast version, I am reproducing the text of Hyman's commentary with observations from me intercut with them to point out the rhetorical moves being made.   We'll then touch on the content, with a rebuttal from a special guest blogger.

The world ends on August 2nd

That's what Washington politicians want you to believe. 

Note the use of the demon phrase "Washington politicians."

Supposedly, that's the date America hits the national debt ceiling.  Previously, we were told the deadline was March 31st, April 15th, May 16th and May 31st.

Here's an example of a hasty generalization. Hyman suggests that because these previous dates did not prove to be "deadlines," the August 2 one is similarly arbitrary.   However, many financial experts point out that the August date truly is a deadline, because all the wiggle room available has already been used.  The can we've been kicking stops rolling on the second.

It’s like the old joke.  A doctor gives a man six months to live.  The man tells the doctor he can’t pay his bill.  So the doctor gives him an additional six months to live.
This is an argument by analogy, and a faulty one at that.  As just noted, the premise that the August 2nd date is an arbitrarily chosen date is false.

It’s Washington gimmicks.

Here, Hyman uses "Washington" as a metonym for meaningless government action, and uses the word "gimmicks" to suggest a lack of substance to the issue and its consequences.  Note, however, that using this phraseology doesn't actually prove anything.  

Most media equates the debt ceiling with automatic default.  Untrue. Treasury Secretary Tim Geithner - the man who cheated on his taxes for years - is obligated to make debt payments.  And we have enough money to pay our debt. We default only if the White House orders us to default.

A lot going on here--first, Geithner did not "cheat on his taxes for years" (he apparently made an embarrassing-but-quickly-corrected mistake regarding wages paid to a household employee).  Even if he did, it's a red herring.  Nothing about Geithner's personal tax situation is relevant to the statement that Hyman makes (that he's obligated to make payments on the debt).  Additionally, Hyman leaves out an important fact--while the government *could* continue to make debt payments, it could only do so if it cut about 40% of the budget.  This, by the way, is the true motivation behind the created "crisis;"  it has little to do with the debt being a particularly dangerous to our economy at present (unemployment is the much bigger issue), but because of opposition to the very idea of social spending.   The statement that we only default if the president orders us to is simply a nonsensical bit of fluff that's only there to attempt to put the onus for the issue on the back of the president, despite the fact that the law says it is Congress that must act.

Now the White House argues we can’t afford our debt.  And we should take on more debt to pay off the debt we already can’t afford.  Got it?

Argument by ridicule: present opposing points in ways intended to deny any actual validity or seriousness to them.  Here, Hyman attempt to make it seem as if the current White House administration is doing something different and novel, unlike the dozens and dozens of other times the ceiling has been raised as a simple matter of economic policy.

A catastrophe does await our children and grandchildren.  We are saddling them with debt they can never hope to repay.
Argument by fear ("catastrophe") and pity (we "are saddling [our children] with debt").  Again, this suggests that the current situation is in some way novel.  It also ignores that the majority of the debt we are "saddling" our kids with came about during the Bush administration (going back to Clinton-era tax rates would, by itself, all but solve the whole problem).

This is no time to compromise.  You compromise on china patterns. And on which movie to see.  You don’t compromise on principle. One side wants to live within our means.  The other side wants to spend us into bankruptcy.  You don’t meet in the middle and just wildly overspend.

Perhaps the most dangerously mistaken passage in the whole commentary, shot through with Manichean black/white, good/evil binary thinking.  You can have principle or you can compromise, but not both.  Even a suggestion that compromise, or finding a "win/win" solution, would itself be principled is not allowed.  Nor is it acknowledged that framing a conflict in binary terms in which your opposition is portrayed as lacking any legitimate principles might itself be an unprincipled approach to conflict resolution.

Hold the line. Principled people shouldn’t allow this White House to turn our country into Zimbabwe.

An appeal to fear based in a faulty analogy (U.S. to Zimbabwe) and a restatement of the "we're principled, the other side is not" trope.

Okay, but what about the substance?  Rather than blathering on myself, I have a guest who wants to respond to Mr. Hyman's commentary.  His name?  President Ronald Reagan (who presided over 18 raises in the debt ceiling):

Congress consistently brings the government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility—two things that set us apart from much of the world. (September 27, 1987)
This country now possesses the strongest credit in the world. The full consequences of a default or even the serious prospect of default by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the cost, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.  (Letter to Howard Baker, 1983)

And that's Behind "Behind the Headlines" for this week!

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