New York Times columnist Paul Krugman is among the economists who has been sounding the alarm about the United States’ debt ceiling, warning that if the U.S. defaults on its debt obligations, it could trigger a major financial crisis. Krugman is vehemently critical of the way in which far-right House Republicans have been handling debt ceiling talks, and in his February 2 column, he accuses them of being willing to “burn things down” if they don’t get their way.
Republicans in the U.S. House of Representatives, especially members of the far-right House Freedom Caucus, have been demanding spending cuts. But Democrats, including President Joe Biden and House Minority Leader Hakeem Jeffries, have maintained that cuts to either Social Security or Medicare are off the table.
“This time, Republicans aren’t making coherent demands,” Krugman argues. “It’s completely unclear what, if anything, they want in exchange for not blowing up the economy. At this point, they’re blackmailers without a cause.”
Krugman adds, “Some of the reporting I’ve seen on the debt standoff describes Republicans as unable to agree on which spending should be cut. This might give the impression that there are factions within the GOP that have different priorities. But as far as I can tell, no influential players within the party are advocating anything that might make a significant dent in the budget deficit, let alone achieve the balanced budget Kevin McCarthy promised as part of the deal that made him speaker.”
The liberal economist compares House Republicans to “blackmailers” who don’t even know what their demands are.
“So, the bottom line on the debt crisis is that there is no bottom line: Republicans denounce excess spending, but can’t say what spending they want to cut,” Krugman laments. “Even if Democrats were inclined to give in to extortion, which they aren’t, you can’t pay off a blackmailer who won’t make specific demands…. It’s hard not to be worried.”
Krugman adds, “It’s dangerous when a political party is willing to burn things down unless it gets its way; it’s even more dangerous when that party just wants to watch things burn; it’s even more dangerous when that party just wants to watch things burn.”