August 2nd, 2011 will dawn like any other day. Some places will have sunshine, some places clouds, some places will be warm, some will be hot. People will shamble and shuffle through the hours, taking care of children, going to work, shopping for groceries, reading blogs, watching the news, and all the other things that mark a day passed in the life of a human being in the United States of America. Nothing truly shocking will happen... on the surface.
Yet, like an iceberg, most of what happens to our nation happens out of sight, a mass of motions, bargains, and deals that we do not see, nor do we have an inkling about. They happen on floors crowded with cubicles, in rooms with long tables and leather chairs, and corner offices, and back rooms, through teleconferences, emails, furtive phone calls, and quiet handshakes. And on that August day, a decision, really many decisions that rolled up into a singular one, will potentially cause the erosion of our nation's power and prestige, not to mention imperil an economy which, while on the mend, is nowhere near ready to move out of intensive care.
August 2nd, 2011, is the day the money runs out.
No one will notice it, there will be signs: the bleating of pundits on television screens, the waggling and wiggling of Wall Street, the impatient scroll of the teleprompter, and the constantly updating web sites. Though you will not notice it at the gas station or the grocery store or the public library, an event will have taken place that simply has not occurred in our modern era: the United States will have run out of money to pay all our bills. Like a family that has lived day-to-day on paychecks, at the end of the day, the coffers will be empty, and international creditors, and government employees, and senior citizens, and bond traders, and Americans from all walks of life will be left standing there, hand out, while Uncle Sam turns out his pockets and shrugs.
Plenty of people would have you believe this would not be the "end of the world," and they are right. It is hyperbole to believe that the whole of the nation, and the rest of the world with it, will simply come to a screeching, clattering halt. In fact, in the days after the money runs out, things might seem to be going along as usual. Below the surface, though, there will be the mad scramble to move money around, bounce it from place to place in a vain attempt to stave off collapse, shut down whole sections of government and cross fingers that this buys time. For a while anyway, the frantic fluctuations below the surface will not be seen or felt by the average citizen. If it goes on long enough, however...
It will start to show up in a rise in interest rates on your home and car loans and your credit cards. The effects will be subtle, because the rise will seem minuscule. Then you will notice retail prices begin to rise. Suddenly, you will note that you are spending more but getting less for the dollar. Then the dreaded word "inflation" will begin to rear its ugly head.
While a failure to raise the debt ceiling will not lead to the collapse of Western Civilization or the start of World War III, it will put a squeeze on the people who can afford it least: the average citizen. The senior citizens with fixed incomes, and those on disability will be hurt first and hurt worst. The poor will see their safety net dry up. Charities will see donations disappear as people tighten their belts even more than they already have. Money will drain away in savings accounts and under beds, and an economy teetering and tottering along, will be brought down in a thud that will reverberate around the globe.
Some would have you believe that the effects of a shut down will be negligible. Some would have you believe that the effects of a shut down will be catastrophic. The effects will be felt, no question. It may take time, it may not show up right away, but there will be effects and they will reach into every corner of American society -- save perhaps for the top 2%, who will be insulated by the sheer bulk of their wealth.
We would not be here, of course, if Congress had, at any time in the last decade, chosen to rein in spending. If wars had not been launched that were not necessary. If mandates were not created that were unfunded by revenues. If unsupported tax cuts for the wealthiest Americans had never existed. If those who supposedly represent us and our interests had actually done the job we sent them to Washington, D.C. to do, there would be no need for last minute scrambling to try and prop up the debt ceiling a little higher. This "crisis" was manufactured by the inability of both parties in Congress to govern, and is being exacerbated for political gain by the Republican Party, hoping to use it as leverage to unseat President Obama in 2012.
The "crisis" may still be averted; there is time for both sides to pull their heads out of the sand, toss aside the partisanship, and do what needs to be done. To do so, however, would require both Democrats and Republicans to recognize a simple truth: they put themselves and the nation in this predicament, and no one is going to bail them out. Now is not the time to worry about long-range debt problems; one does not worry about the life of the tires on their car when the battery has died. The first thing to be done is to raise the debt ceiling and avoid potential default. Right after that, then next thing to do is hunker down and come up with solutions to increase revenue and decrease debt, and to place everything on the table. Pledges and promises are not tools of governance -- they are stumbling blocks to progress. Congress needs to get its eyes off of 2012 and concentrate on 2011, if we are to avoid creating worse problems for ourselves down the road.
In the end, the same people who got us into this predicament must get us out. We can only hope they have learned something by the negative reactions of the American electorate. We can hope so, anyway.