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.”
Got that? The deficit and debt are serious problems. Let’s have a vigorous debate on how to best address them. Let’s negotiate the best deal possible with spending cuts, tax reform, and entitlement reform. And then let’s put alternatives to the American people in 2012. But don’t take the U.S. economy off a cliff just to prove your point.