In any reasonable negotiation, both sides can assume that certain outcomes can safely be ruled out, chief among them the possibility that one party will resort to something so dangerous that it risks blowing everything up. Not in the negotiation currently consuming Washington. In refusing to lift the nation's debt ceiling without first extracting spending cuts, Republicans are in essence threatening to obliterate the underpinnings of the global financial system -- the bed-rock faith that, come what may, Uncle Sam always makes good.
How can any rational negotiation take place in the face of such a threat? If the Republicans are serious about following through, they are either ignorant about the workings of finance or insane. Or to add a third possibility, they are courageously cynical: They are exploiting the assumption that the people they are dealing with will ultimately cave, paying whatever price is required to avert catastrophe. Act like a madman, the logic goes, and the sane people will be forced to accommodate.
Meanwhile, the rest of us wait and worry and wonder what will happen, every day dominated by anxious talk that American creditors will start demanding higher interest rates on the next extension of credit, heaping fresh trouble on a stalling economy. We imagine what an American default would look like, a thought that renders the logic of global capital effectively inoperable. It would change everything -- faith in the dollar, confidence in the sanctity of all debts. When everything is different, money has a way of standing still.
Perhaps the Cuban missile crisis felt a little bit like this, with the crucial difference being that we are the ones stacking up the nuclear warheads and threatening to detonate them on ourselves.
Obama has already rewarded the Republican position by signaling willingness to cut to some $3 trillion in spending from the federal budget -- cuts that would tear further at the damaged fabric of the social safety net by reducing support for Medicare, Medicaid and Social Security, while adding to the drag on the economy. Which means that, whatever happens next, it's not going to be good.
Paul Krugman has it right: Either a deal gets cut and we avert financial crisis, while settling instead for the consequences of idiotic budget-cutting -- the long, slow slog through elevated unemployment with no relief -- or no deal happens and we find out what happens when the American Treasury slides into delinquency.
Last rites have been proclaimed on civility in American politics so many times that bemoaning the state of things is a tired cliché. Yet this episode feels like the reaching of a new low, a renunciation of the most basic form of responsibility by people who were elected to pursue the national interest.
The Iraq War was a disaster, an unenlightened response to the tragedy that was 9/11, and yet I'm willing to accept that the people who prosecuted that war believed that we would be safer for it, even as that has proven wrong. The deregulation of finance under the Clinton and Bush administrations produced tragic consequences. Yet there too, I am open to believing that it was a product of a flawed belief system that saturated too much of the decision-making class, a near-religious faith in the merits of laissez-faire economics.
What is happening now is appalling in a wholly different way. One party is willfully and intentionally driving us to the edge of a cliff, using the national interest as a hostage.
The American system is, like all systems of governance, imperfect and vulnerable to the foibles of the human beings who wield power, along with the fickle ways of the electorate. It is open to the manipulation of powerful organizations whose interests often pull in the opposite direction of the citizenry -- people working stressful jobs, hauling kids to school and struggling to figure out how to pay their own bills, with little time left for keeping educated about the doings of the people who are supposed to be managing the national finances in Washington.
And still the American system has proven dynamic and strong. It has weathered a civil war and two world wars. It has expanded the rights of people who have been systematically discriminated against. It has more often than not managed to balance the interests of a nation of people who are geographically scattered and separated by culture, race and religious beliefs. None of this is to dismiss the considerable injustice woven into American history, not to mention the present, but if you had to pick one way to run things off the global menu, you could do a lot worse than the American system of governance.
Yet the system can only function so long as we can assume that the parties jockeying for influence will respect certain limits -- that they will rule out certain tactics whose mere discussion is dangerously destabilizing.
That is something we can no longer assume. One organized party is willing to threaten to lay everything to waste in the pursuit of its agenda, courting extreme danger for everyone as a means of getting its way. This is the message of the summer of 2011, a message that will remain even after some sort of unsatisfying deal is inevitably cut to avoid the prospect of default. The strategy of intentionally placing the nation in peril as a negotiating ploy has become part of American policy-making.
EDITOR'S NOTE: An earlier version of this opinion piece employed terrorism as a metaphor -- a metaphor that some readers appear to have taken literally. In this updated version, the language has been changed to address these concerns.