Sell the Gold Above the Fold (And a Few Words on the Debt Ceiling)

May 16th, 2011 at 12:20 pm

As I wearily got my Washington Post from the stoop early this AM—yes, some of us still read the “broadsheets”—I was bemused to see this crazy article, front page, above the fold.

There are lots of reasons why this is a bad idea:

–selling public assets may be a fine thing to do but it is always a one-time fix that doesn’t deal with the underlying, structural problem of the long-term imbalance between what we take in and what we spend;

–it would rattle markets that are already worried about the economic sanity of our policy makers;

–the best way to crash the price of an asset is to announce a fire sale;

–it’s a desperation move and we are NOT desperate; we have a flexible, strong economy with some of the best human and physical capital in the world; instead of one-time sales, it is well within our economic capacity to structure revenues and spending to meet the nation’s needs in a  sustainable manner.

But especially today, as we hit the debt ceiling, this bad idea should be a sobering reminder of just how terribly wrong-headed the debt-ceiling debate has become.

Economically speaking, we live in uncertain times.  There’s a fragile recovery underway, but unemployment is still far too high and too many working families can be forgiven if they’re having trouble discerning the difference between recession and recovery.

Adding more uncertainty to the mix, by playing politics with the debt ceiling—using it to extract concessions—is in fundamental opposition to what members of Congress are supposed to do: protect the strength and well-being of the nation.

I understand that some of those playing this game of globally high-stakes chicken are not anxious to support a higher debt ceiling.  I mean, some of these folks were recently sent to Washington to cut spending and explaining to their constituents why they voted to add a cool trillion of borrowing headroom won’t be a cakewalk.

But to drag this out unquestionably hurts our economy and our country far more than any political advantage members might gain from holding out.  It’s time for elected officials to put the country first.

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4 comments in reply to "Sell the Gold Above the Fold (And a Few Words on the Debt Ceiling)"

  1. Bob Wyman says:

    To those whose experience with economics is limited to personal and household finance, it is intuitively “obvious” that selling assets (any assets) is the right thing to do when you’re in debt and can’t raise revenue. The problem, of course, is that “home economics” and “national economics” are drastically different subjects.

    It seems to me that what we really need here is to find a way to teach those who are ignorant of national economics that what works in the home or even in a business doesn’t always make sense for a country. Unfortunately, the Right has discovered that by pandering to and reinforcing the logic conclusions of the ignorant, they can increase their power and influence.

    Mere reason is a feeble weapon against what is “intuitively obvious.” What one needs to do is address the core assumptions which sustain and support intuition.

    • Phil says:

      This is a constant struggle I have talking to people about issues at the State and National levels. Many cannot think beyond their own checkbook as a metaphor for understanding our current economic situation. I welcome any and all suggestions on how to improve these communications with folks who are not as “tuned into” the economic issues of the nation.

      • readerOfTeaLeaves says:

        I think that Bob Wyman has nailed a key problem: we’re humans, so we think in metaphors.

        That limits what we can think, if our experiences come from our households and/or small businesses.

        For instance, I don’t know of a household that uses tax havens. I also don’t know of a small business that uses them (although I don’t doubt for an instant that it happens).

        I also don’t know of a household that supports a military, a postal service, or a national park system.

        So the conservatives are basically telling people that the issues of funding parks, mail services, and veteran’s care don’t matter — all that matters is whether they can buy gas at less than $3.00 per gallon.

        That’s a huge disconnect.
        Add onto that another layer: about 1/3 of the US adult public is functionally illiterate. (I am not kidding.) So all the policywonk language goes by them like buzzing mosquitoes – they swat it away, because it bugs them.

        But, at least in my experience, illiteracy does not equate with stupidity; they can be plenty smart without being Tolstoy.

        So it appears that one part of the challenge is to help people understand that the ‘household’ metaphor is harming them. Or that if they want to keep that ‘household’ metaphor, they need to include a ‘household’ that has an injured vet, a college kid with huge student loans, a laid-off dad, and no trees in the yard because they all had to be sold off to a gypo logger in order to pay the interest on the loans. Or something along those lines.

        The ‘household’ metaphor needs to be cracked open as a misleading, if well-intentioned, fiction.

        FWIW: This blog design is really clean and easy to read. However, it would be a benefit if you could list your recent post topics along the right column, even if they are below the videos.

        Having to go back and forth among screens and have the whole page reload to determine which posts I’m missing is not very convenient.

  2. Phil Perspective says:

    Mr. Bernstein:
    Where is the President in all of this? Why is there even a deal to be had? One could believe that the President wants to play Monty Hall on this to impress Versailles.