Posted by | July 13, 2011 21:31 | Filed under: Top Stories

by Stuart Shapiro

Well that’s the trillion dollar question isn’t it?  As tensions rise on both sides, more and more people are thinking that they are insane (including my Dad who scolded me with “There is no Republican Party anymore.”)  Diane Swonk, chief economist for Mesirow Financial and an economic advisor to the Congressional Budget Office and the Federal Reserve Board, also is moving into the “They are nuts” camp (courtesy of Steve Benen)

“Right now, financial markets in the U.S. are giving this a 0% probability of happening. With all the time I’ve spent in Washington, although everyone believes it’s just inconceivable, those who don’t agree it’s inconceivable are the Congresspeople we need to actually vote on it. And that’s what really is disturbing: they’re the ones who are unconvinced that there’s any problem out there.

“Everybody else is saying, ‘This is just so horrible. There’s no way they could possibly be this stupid.’ Well, I’m not sure. They could possibly be so stupid.”

Asked how economists can explain reality to those who don’t want to raise the debt ceiling, Swonk went on to say, “I don’t even know how to explain it any more clear to them…. This is something you just don’t play with”

I continue to think that the Republican caucus is deeply divided.  Speaker John Boehner announced today that 60 members of his caucus won’t raise the debt ceiling no matter what.  So that’s 60 in the insane column.  But Boehner did this to signal both to the President that he (Boehner) has a problem he can’t control and to campaign donors that they have 60 people they need to call.  Boehner and Senate Minority Leader McConnell are riding a horse they’ve lost control of.  They want a deal but don’t know how to get to one and keep their jobs;  so they are looking to the president to bail them out, either by caving in to the 20% of the electorate that opposes higher taxes or through a gimmick like the one McConnell proposed yesterday.

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Copyright 2011 Liberaland
By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.