Reagan Would Raise the Debt Ceiling

Nevertheless if you are the type of Republican who feels the need to ask What would Reagan do? then you should probably read David Brooks’ column today:

If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases.

A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.

The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.

This, as I say, is the mother of all no-brainers.

But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.  The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.

Reagan, I’m pretty sure, would take the deal and lift the debt ceiling. Maybe that would be wrong – though I doubt it – but yet again we see that many of those who profess their unswavering devotion to all things Gipper worship a corrupted version of their god that cannot withstand much comparison with the reality of the man himself.

Perhaps Brooks overdoes it a little (and he may well overstate Democrats’ willingness to compromise) but I don’t think a US default – even a technical one – is likely to produce many happy outcomes. But Republican leaders are now in a desperate place of their own making: they can only please one vital part of their electoral coalition at the price of horrifying another, equally important, constituency. That’s not a good place to be either.

UPDATE: Megan McArdle has a top post on all this that I commend to you.