Some lessons of the crisis have added significance beyond our shores. One is that America now regards its most solemn financial obligations as flexible commitments. The problem isn't just that some members of Congress were willing to contemplate national default. It was that some of them clearly desired default as a kind of ultimate weapon against social spending. The precedent has been set for using America's credit rating as blackmail. The issue comes up again in less than a year and a half, at which point the masochistic drama of recent weeks could be repeated with a different outcome. This is the way in which the United States resembles Greece—not in its underlying creditworthiness, but in making the matter of paying its debts a political question.I'm particularly struck by the first graph. Weisberg presents it in a way I hadn't completely though of. Namely, that America has now made clear that it will not necessarily pay its debts. We have become, in some ways, like other economically troubled countries where it is no longer a certainty that debt can be fully repaid, and where debt has become a political commodity. All because of the Republicans.
At the level of political culture, we have learned some other sobering lessons: that compromise is dead and that there's no point trying to explain complicated matters to the American people. The president has tried reasonableness and he has failed. It has been astonishing to watch Obama's sheer unwillingness to give up on his opponents after their refusal to work with him on the stimulus package, health care reform, or the extension of the Bush tax cuts last fall. A Congress dominated by mindless cannibals is now feasting on a supine president. But surely even he now realizes there's no middle ground with antagonists whose only interest is in seeing him humiliated.
If we had a partisan President, he would have noted such a thing, which not only would have worked to our political advantage in the talks, and in the next elections, it also may very well have stopped the GOP from undercutting America's financial credibility in the eyes of the world. As Joe and I have noted numerous times, the President's mistakes are not isolated incidents. They reverberate far beyond the current crisis, into other policy matters, and into the future where the numerous errors tend to coalesce into something bigger and increasingly worse.
