Saturday, July 16, 2011

The Debt Limit Showdown and Party Incentives

National Journal has an interesting piece up today about how the House Republican leadership is trying to warm it's freshman members to the (hopefully) eventual debt limit increase. Specifically,
"[John] Boehner has been "aggressive," in one aide's words, in articulating the need to reach a deal."

I would argue this is a reasonably optimistic development for what has been a very worrisome episode in American democracy.

Party incentives drive policy enactments, for the most part. Up until now, it seemed like the House GOP's incentives were being solely driven by the Tea Party, the ostensible drivers of their 2010 Midterm electoral success. The interest group consistently engages in a kind of economic "earth-is-flastism" by denying that a credit national default would have adverse effects. For example, the Tea Party Patriots co-founder Jenny Beth Martin told CNN that the issue was simple to solve by litteraly using the phrase: "It's that simple." This type of oversimplification of a complex and urgent issue is worrisome to the extent of the damage that a default would have on our nascent economic recovery. This all makes sense as s
tructurally, economic issues are hard to explain; and except in the case of the shortest of slogans, even harder to use as a tool of political motivational.

So, no one should be surprised that these type of statements play well with the median, non-engaged constituent, especially in the populist context of the Tea Party demographic.

What is surprising, is the fact that the Republican party's indulgence in this kind of rhetoric as their preferred economic policy, rather than just political sloganeering. To legitimately engage the notion of not raising the debt ceiling is to court an actual default of the US government. It's one thing for base activists to push for economic nonsense that jeopardizes our country. It's quite another thing for professional politicians and major party leadership do the same thing.

That's why this National Journal piece is significant. It's showing us that the basic framework of our incentive system hasn't been placed so out of wack the the House GOP would pursue the political advantage of a government default. The Tea Party may try an exert more pressure to prevent a debt limit increase, but they're only one pressure group out of thousands. As others make the (correct) point that a debt default would be bad both substantiatively as well as politically, Boehner, Cantor, McCarty and others in the House majority leadership begin to pressure their caucus members to step away from the brink.

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