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The Debt Ceiling as a National Security Issue

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Wednesday, October 16, 2013 at 7:49 AM

If a body other than the Congress of the United States were actively contemplating a step that would, by the accounts of virtually all economists, tank the U.S. economy, cause interest rates to shoot up, and trigger a financial crisis, we would talk about that body as threat to national security. At a minimum, we would talk about the step it is contemplating in national security terms. A government shutdown, after all, can invite a national security event, but by itself it isn’t one. It’s a game of Russian Roulette. A default, by contrast, is a national security event, the loss of one of this country’s great international and domestic assets: Its undoubted creditworthiness. It is an asset on which much of this country’s prosperity and power rests.

Yet for some reason, when Congress flirts with flushing this asset down the toilet, with giving it away for no discernible reason and getting nothing in exchange for it, we do not tend to discuss this in national security terms. Congress may suffer in public opinion polls, as it has done. But we don’t tend to talk about Congress as—at this stage—what it plainly is: the clearest and most present danger in the world to the national security of the United States.

There is no chance that tomorrow Al Qaeda will cause this country to default on its debt. Nor is there any chance that Iran will or that North Korea will or that any foreign adversary will. Nor can any of these entities hope to inflict one gazillionth of the damage such an event would entail. There is, however, a considerable chance that Congress will launch such an attack—which, of course, we won’t speak of in those terms. Here is how the New York Times opens its lead story this morning:

With the federal government on the brink of a default, a House Republican effort to end the shutdown and extend the Treasury’s borrowing authority collapsed Tuesday night as a major credit agency warned that the United States was on the verge of a costly ratings downgrade.

. . .

With so little time left, chances rose that a resolution would not be approved by Congress and sent to President Obama before Thursday, when the government is left with only its cash on hand to pay the nation’s bills.

I’ve heard a lot of hand-wringing over the last few years about the possibility of a Chinese—or other—cyber attack on the American financial sector. I take those threats pretty seriously. But here, in slow motion and altogether in plain sight, is a real live attack of catastrophic proportions on our banking and financial system that is actually unfolding and absent congressional action will come to fruition starting tomorrow. It is an attack, among other things, on the jugular of precisely that feature of the system that binds the whole thing together: Confidence. Yet we talk about it in the staid language of political punditry. Can speaker Boehner get his caucus together? Can the bipartisan Senate leadership pass a compromise package? There comes a point at which this is no longer the right vocabulary.

National security is not just things that go boom. It is not just terrorists and foreign adversaries. It is possible for a country to commit suicide. It is possible for great nations to rot from within. Shelley once called his national legislature: “Time’s worst statute unrepealed.” I’m no historian of the early 19th Century in British politics. But I’ll wager that Parliament in that era never intentionally raced Britain to the edge of a financial meltdown. Nor can I imagine that any sane person looking at congressional behavior today is predicting, as Shelley did back then, that from Congress “a glorious Phantom may Burst, to illumine our tempestous day.”

We are, I’m afraid, quite stuck in the darkness of our tempestuous day. But we can at least describe it honestly.