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September 19, 2013 10:19 AM Maybe It’s Not Quite Nihilism

By Martin Longman

I wish I felt comfortable saying, “No, Donny, these men are nihilists, there’s nothing to be afraid of,” but their blithe willingness to mess with the debt ceiling and our credit rating concerns me.

There are about 30 Republicans — a minority, but enough to stymie legislation — who have stood firm against legislation that doesn’t affirmatively defund Obamacare. Their sights are now shifting to the debt ceiling, and some are beginning to say they are willing to ignore the implications of hitting the borrowing limit.
“I am,” Rep. John Fleming (R-La.) told POLITICO, when asked if he’s willing to forgo raising the debt ceiling without a delay to Obamacare. “Technically, it’s not possible to default because there’s always enough revenue to cover the interest. If we defaulted it was because the president chose to default, not because we ran out of money.”
Fleming said “nothing happens” if the debt ceiling is reached. Asked about market fallout, Fleming insisted both parties will suffer equally at the hands of irate American votes. “We all pay a price for that,” Fleming said.

It should be noted here that credit rating agencies are in the business of estimating your likelihood of defaulting on your debts. They don’t just sit around and wait for you to welsh on your bills before they downgrade your credit rating. They make pro-active determinations so that lenders have some idea how creditworthy you are before they give you any money. The more risk there is that lenders won’t be repaid, the more interest they are going to want on the loan. That is why Standard & Poor’s downgraded America’s credit-rating in August 2011 even though we never defaulted on our debts.

If you care about our nation’s credit rating, you know it is irresponsible to even talk about not raising the debt ceiling because that kind of talk, by itself, can be enough to cause a downgrade. It happened once, and it will probably happen again.

Rep. Fleming makes an odd assertion when he says that it is impossible to default because we can always prioritize the interest payments. Does he think we can stiff government contractors, Social Security recipients, medical doctors, government employees, and everyone else the government owes money to without it having any impact on people’s willingness to loan the government money?

It’s also odd that he says in one breath that “nothing happens” if we run out of money, and in the next breath that Americans will be irate. If nothing would happen, then Americans would have no reason to be angry.

This kind of detachment from the world of objective facts is why I am always tempted to accuse these folks of nihilism, but it is clear that they do believe in something. It’s also clear that we have plenty of reason to be afraid of what they believe, because they are totally reckless.

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