The “Funhouse Mirror” of the Debt Ceiling Crisis

Janine Jackson: Corporate news media provide better and worse explanations of various issues, of course, but there are some issues where elite media’s explanation leaves you somehow more ignorant than you were before you read it.

The debt ceiling, and what media insist is a partisan showdown around it, is one of those issues. If you are disturbed by reporting that misconstrues an issue, where that misunderstanding can lead to people losing their healthcare, you have company in our next guest.

Chris Lehmann is DC bureau chief for The Nation, as well as contributing editor at the Baffler and the New Republic. He joins us now by phone from the DC area. Welcome to CounterSpin, Chris Lehmann.

Chris Lehmann: Hi, Janine. Thanks so much for having me. It’s great to be here.

JJ: Before we get to corporate media’s funhouse mirror version, can you start us with some information about what the so-called debt ceiling is, and the role that it has played in reality, historically?

CL: Yeah, the pithiest definition of the debt ceiling, I think, is a completely pointless contrivance that has outlived whatever usefulness it may have once had, if it ever did.

It was ginned up in 1918, in response to the deficit spending of the US entering into the First World War. That was the time before Keynesianism existed, and there was a frantic perceived need to tamp down on deficit spending, that proved to be largely, as I say, pointless.

And the pointlessness of it was firmly demonstrated during the Great Depression, and the Second World War’s mobilization of the American economy, and the post-war boom in the American economy. So that we now exist in a world where the United States is the only major industrialized nation that has this dumb boundary on what it can spend. Literally no other country in the world deals with this.

It’s also clearly unconstitutional. There is in the 14th Amendment of the Constitution what’s known as the Public Debt Clause, which just flat-out states, “The validity of the public debt of the United States…shall not be questioned.”

So what’s frustrating, living in Washington as I do, and seeing versions of this showdown play out time and again, for what are crass and venal partisan reasons, there is no reason for any of this to be happening.

The right likes to claim that they are originalists when it comes to constitutional language. So here is constitutional language, saying you are weaponizing the spending process for what are nihilistic policy ends.

What they really want out of all this is to basically hold the American economy hostage, so that they can extort, from the opposition in Congress and the White House, key spending cuts that their donor base really wants, but that are vastly unpopular with the American public.

There are things like an accelerated work requirement for Medicaid. There are things like deep cuts to the Veterans Administration’s social service funding. There are things like rollbacks of IRS and antitrust enforcement. It is just a wishlist for the far right that is being smuggled in under the color of an alleged “both sides” showdown over how much we should be spending. It is all made up.

I’m clearly at a point where I’m just exhausted at the approach of this ritualized conflict, and the media’s, in my view, just unbelievably negligent handling of the issues.

JJ: Because when you look at coverage, it makes it sound as though our hands are tied.

CL: Right? There’s nothing anyone can do.

JJ: Yeah. And so there’s basic, it’s not an ideological—I mean, it is ideological—but there are basic definitional problems with the way that media are talking about this.

So when the New York Times says, “But eventually, the United States will need to either borrow more money to pay its bills, or stop making good on its financial obligations,” well, that’s not how that works, right?

CL: No, that’s exactly right. And, again, this is all being ginned up as a crisis for political gain on the right. And if the media could just report that, which is the truth, we would have a different follow-on conversation, instead of this airy, make-believe fantasy that somehow there’s going to be a grand bargain, where both sides will compromise and the golden mean will prevail.

It is stunning to me that we went through all of this in the Obama administration, when there was the “fiscal cliff,” and there was the approach of the debt ceiling. There was language that made it sound like we were in some film noir B-movie: We were going to be kidnapped and thrown over the fiscal cliff. And it was all just for an organized ideological assault on social spending from the right. It’s exactly the same thing now.

Kevin McCarthy is doing the bidding of the Freedom Caucus, which, we all remember from January, tried to block his path to the speakership, and extorted all these concessions, and this is one of the key ones that they got. He’s forcing a confrontation with the Biden White House over the debt ceiling so that they can try to get all of these, again, unpopular cuts to spending that they will not run on.

So it’s both fundamentally opportunistic and venal, and it’s deeply dishonest, and the press goes along with that dishonesty in a way that is just frankly infuriating.

JJ: I’m going to bring you back to elite media, and their ironclad framing that they won’t be moved off of, in a second.

But I just wanted to tease one other thing out, which is that coverage often implies, or at least does nothing to dissuade a reader from a “family budget” analogy, or like you using your credit card, thinking that debt is something you bought, but couldn’t pay for. So that even if this list of things that might be cut—social safety net programs, military salaries, etc.—well, “that’s terrible, but you’ve got to be fiscally responsible.” And that’s pathological. I mean, that’s just deceitful.

CL: At least when the debt ceiling was originally introduced, American leaders had the excuse that Keynesian economics had not existed, and it hadn’t been tried. But the American economy functions in a very different way from any household economy.

And what happens in a downturn is that demand freezes, because credit is now prohibitively expensive; banks are failing, the rest of it. And so that is where the government comes in and “primes the pump.”

And the other thing to note is all this spending was fine when it was approved during the first Covid emergency under the Trump administration. Congress suspended the debt ceiling for all that.

So, again, you just connect all the dots here, and we are not in anything like economic crisis conditions. The economy is functioning at something close to full employment, and the only crises are concerning banks that were overexposed on bad debt in Silicon Valley, and now are facing higher interest rates that the Fed has exacted.

None of that is going to be remotely addressed or solved by cuts to spending extorted under the debt ceiling.

It’s also—not to get too nerdy and wonky here—it’s notable that as FDR and the New Deal were combating the Great Depression by priming the pump with government spending, FDR and his Treasury secretary had a brief flirtation with fiscal austerity in 1937, and tried to balance the budget, and another recession promptly ensued.

So this is not to say that would be the case necessarily here, but it is to say that, again, this model of “we have to tighten our belts and keep the debit and credit column in perfect alignment” wreaks havoc in macroeconomics, in a way that the model of the household spending and credit card limits just does not apply, and it’s often dangerous to apply.

JJ: And then “we” are not ever tightening “our” belts. It’s really only some people who are feeling the brunt of this.

CL: That’s the other thing, is this is a party that has lavished tax cut after tax cut to the One Percent, and exacted fiscal discipline on everyone else.

JJ: Let me just ask you, finally—we’ve been talking about it all along—but when the New York Times says in covering this, “The bad news: Democrats and Republicans are divided.”

I mean, I don’t even know where to start, but elite media’s fealty to this phantasm of bipartisanship, whatever it means: Speak to that, but maybe in terms of, what would better coverage look like?

CL: Yeah, as I was saying before, better coverage would just report the truth, which is: one political party is using an outmoded mechanism to extort cuts to spending that it cannot legitimately put forward for public scrutiny and win. So there are lots of ways of making that point.

I think there’s also a big failing on the part of the Democrats here, of just not taking the weapons that are at their disposal. It’s very easy for Janet Yellen, the secretary of the Treasury, when the debt ceiling comes on June 1 or thereabouts, to just say we’re going to ignore it, it doesn’t matter.

Similarly, the Biden administration could cite the Public Debt Clause of the 14th Amendment and say, look, if we are not honoring the country’s debts, we are in violation of the Constitution. Make the Republicans be the party of both cruel Dickensian fiscal austerity andabuse of the Constitution’s powers.

So it’s not all the failing of the press, but it is significantly the failing of the press.

The Republican Party does not have a case here, and our elite media, of course, function as a for-profit industry. It’s owned by the people who want this kind of austerian budget process that benefits the wealthy. So, of course, its material interests are going to be reflected in how it covers matters of economic policy.

JJ: All right, then. We’ve been speaking with Chris Lehmann. He’s DC bureau chief at The Nation. You can still find his piece, “The Media Can’t Get Enough of the Debt Ceiling,” at TheNation.com. Chris Lehmann, thank you so much for joining us this week on CounterSpin.

CL: Thank you, Janine.