"If You Argue With A Fool, You've Got Two Fools"

 From John Avlon writing in the Daily Beast:

Call them Debt Ceiling Deniers. Believers in faith-based fiscal policy. Math-challenged cause-and-effect-skeptics. ...

The costs of courting conservative populists should be clearer than ever to reality-based fiscal conservatives inside the Republican Party.  Their “all-or-nothing” meets “what, me worry?” negotiating stance is not only the newest symbol of D.C.’s dysfunction—it is beginning to have an impact on the entire U.S. economy. ...

The fact that defaulting on our debt would raise interest rates—deepening the fiscal hole we’re in by compounding the size of our deficit and debt overnight—is not addressed.  Instead we are greeted with nihilistic bubble talk—at its best, economic incompetence and at its worst evidence of tactical Leninism—the belief that “the worse things get, the better they are for me politically.” ...

If you argue with a fool, you’ve got two fools.  Nonetheless, I thought a reality check might help some of the Republicans in Congress currently deciding how they’ll vote as we pedal ever closer to the cliff that is the August 2 deadline.

So I reached out to two former Republican chairmen of the Council of Economic Advisors, with presumably impeccable fiscal conservative credentials: Michael Boskin, who served under Bush 41, and Glenn Hubbard, who served under Bush 43.

"A real default would have severe ramifications in financial markets and the economy.  We need to maintain the full faith and credit of U.S. government securities," says Boskin, now a senior fellow at the Hoover Institution.  "The deficit and debt are primarily a spending problem that could condemn us to stagnation or stagflation if not seriously addressed soon. So trying to leverage the debt ceiling increase into spending control makes economic sense...The worst outcome is a default with no real spending control."

While you’re digesting that considered opinion, here’s Glenn Hubbard, advocate/architect of the Bush tax cuts and dean of the Columbia Business School.  “The debt ceiling must be raised—not doing so is irresponsible,” Hubbard emailed.  “The real discussion needs to be about to stabilize, then reduce America's burgeoning debt-to-GDP ratio…From here, the most sensible path would be an agreement on spending reductions.  Then should come a debate (post-raising the ceiling) over reducing entitlement spending versus raising taxes.  That debate can also address raising marginal tax rates (as the president proposes) versus limiting tax expenditures (as the [Bowles-Simpson] commission proposes).  These debates will be the domestic policy stage for voters to judge in 2012.”