Defusing The Debt Ceiling Bomb

Richard Thaler encourages John Boehner to take the debt ceiling out of the picture in the budget battle (h/t Mark Thoma):

Which leads to my proposal for restoring Mr. Boehner’s relevance: He should propose that the debt ceiling be raised for at least two years or, even better, propose that it be abolished. He wouldn’t need a majority of his own party to vote for such a bill, of course, because it would have wide support among Democrats. He would just have to propose it and persuade some of his colleagues to support it. That would be enough.

Here is why I think this is a good idea, for him, the Republican Party and the country:

Congress has plenty of incentives to make a deal on spending. Taxes have already been increased and Republicans are eager to even the score. The sequestration-induced spending cuts coming on March 1 should provide more than enough impetus for Congress and the president to agree to something, even if it’s only a plan to undertake serious tax reform and a comprehensive evaluation of all government spending. By removing an option that we should never rationally use, we can immediately accomplish an often-cited Republican goal — reducing global uncertainty — and likely restore our triple-A credit rating. The Bipartisan Policy Center has estimated that the dillydallying about the debt ceiling last time, which ticked up interest rates, will end up costing more than $18.9 billion over 10 years, about the same amount as the recent Medicare “doc fix, ” which blocks cuts to doctor reimbursement rates.

Tea Party conservatives would undoubtedly be outraged by this suggestion, arguing that Republicans need to retain the debt ceiling threat if they are to get the best possible deal from the Senate and the president. But taking this crazy threat away from a group that just might use it is precisely the point.

By undertaking this act of unilateral disarmament, Mr. Boehner and whichever Republicans had the courage to join him would be signaling that they’re willing to engage in the serious discussions the country needs, and to put pressure on Democrats to do likewise. Anyone who has a large bomb and is threatening to push the button doesn’t deserve to be a party to these discussions.

In other words, Jim Jordan and the other Tea Party loons are the Iranian mullahs working to get the bomb in our budget negotiations.  Except the Iranians are probably more responsible, and less likely to blow up everything they can.