We can now mark the countdown to a debt ceiling breach in days rather than weeks, with the federal government at "significant risk" of running out of cash and reaching its borrowing limit before mid-June. President Joe Biden and congressional leaders are set to meet again Tuesday, but not much progress has been made since the last meeting. Republicans haven’t released the fiscal hostage, but the White House is continuing talks anyway. The latest news from staff-level negotiations is that the White House asked for about a dozen tax loopholes to be closed, and of course the Republicans refused.
While that drama plays out, NBC News went out to see what the voters think of it all, and determined that voters aren’t paying that much attention. At least that’s what the scant research shows right now. Research firm Engagious conducted a focus group and concluded that the nation defaulting is an “abstraction far removed from day-to-day concerns” and that “there are signs that a crisis-weary population wants to sit this one out.”
“If people have followed the issue at all,” NBC reports, “they’ve concluded that this is simply one more partisan fight in Washington that reinforces perceptions of broader dysfunction, political analysts from both parties said.” That could be because that’s exactly how the traditional media has been reporting it, “both sides” and all.
The default for the traditional media is always going to be, “How does it affect the horse race?” before the next election, not “What does this mean for daily life in America?” One reason, in this case, is because we don’t know what will happen. The nation hasn’t defaulted on its debts before because we haven’t had one political party willing to go there. That does make it a political story, but not reporting beyond that is a profound disservice to the public.
So let’s talk about what it would almost certainly mean. The first thing that would happen is people who get money and assistance from the federal government could stop getting it, and would certainly not get it on time. That means paychecks for a bunch of federal employees, including the military—the actual grunts in uniform. It’s people who receive Social Security benefits every month. It’s the health care providers who provide care to Medicare enrollees. It’s the people who rely on food stamps and federal housing assistance.
There are domino effects to that money drying up, because all those people who aren’t getting paid aren’t able to buy things. They’re maybe not going to be able to pay their rent or mortgages. It means businesses would stop hiring new workers. It might mean businesses have to start laying people off. That means even people who don’t get paid directly by the federal government are going to be affected as the loss of all that money ripples through the economy.
On the other side, there are the people who hold the U.S. debt—meaning us, the larger public: “Debt held by the public is essentially U.S. Treasury securities—government-issued IOUs—held by the sovereign wealth funds, banks, insurance companies and other private investors, including individuals.” Those Treasury securities aren’t going to look like such a safe investment following a default; they’ve always been a sure bet because the U.S. government has always paid its debts. The loss of investors would probably ripple through the markets, and that in turn could hurt retirement savings other than Social Security—like 401(k)s and pensions.
The last time we came this close to a default was in 2013, and that near-brush with a default cost the U.S. 1% of GDP. That was when Republicans were holding the debt ceiling hostage, but basically promising not to shoot it. At least some of the Republicans running the show now are fine with shooting it: They’re ready to default and don’t care about whatever happens after. (Okay, so it is really hard to keep the politics out of this discussion.) What this all means, almost inevitably, is a recession—and potentially a global one.
That’s all really dire stuff. It’s dire enough that it probably does make sense for President Biden to do what he hasn’t done yet: deliver a primetime address in which he explains this to the American people. The traditional media would have to take a break from the both-sidesing long enough to at least show the speech and talk about it.
Biden’s got the most powerful microphone in the country, and we’ve already seen how effectively he can use it. It’s about time he does it again and while he’s at it, he could get the public ready for the possibility that he takes care of the crisis on his own.
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The data is in: Americans don’t like Republican policies on abortion. Kerry is joined by Drew Linzer, the director and co-founder of the well-regarded polling company Civiqs. Drew and Kerry do a deep dive into the polling around abortion and reproductive rights and the big problems conservative candidates face in the coming elections.