Debt Ceiling Thoughts

From the public signals, it seems as thought the President and Democratic leadership are trying to reach a reasonable deal with the GOP, but are ultimately determined to avoid a default on US debt or ratings downgrade no matter what the price.  They'll agree to huge cuts to Social Security, Medicare, and other parts of the social safety net if that's what it takes to avoid a default.  I sense that part of the GOP gets this and is going to milk them for all they're worth. That means that the Democrat's only hope are what Tom Egan calls the "tassled-loafer" Republicans (others would characterize the GOP split as crazies v. cravens), who are also desperate to avoid a default. 

I'm well aware of the costs of a US default; it will undoubtedly hurt the economy, and not just the financial economy, but the real economy.  It could also affect the distribution of social safety net benefits. But those costs have to be balanced against the costs of gutting the social safety net. The former costs will not be long-term; the latter costs will be more or less permanent. There seems to be surprisingly little discussion about whose ox will get gored under each of these alternatives. 

Opting to gut the social safety net to prevent a default is a choice to protect the upper and middle classes--the wealthy and the employed--and the and screw not just the poor, but retirees and the large segment of the population those who are working jobs that do not pay enough to allow meaningful retirement savings or adequate health care. Put differently, sacrificing the social safety net to avoid a default is opting to favor those who need help the least at the expense of the most vulnerable in society. Not surprisingly, there is doesn't seem to be a voice at the table arguing for preservation of the social safety net as a priority greater than preventing a default.  There is, of course, a reasonable level of trade-off, but I worry that the Administration has gone well beyond that.  We should recognize that this is a serious choice about what we want America to be.