Debt danger dire
Mick Mulvaney seems determined to blow up the financial world
Mirror mirror on the wall, who’s the most dangerous government official of them all?
The Mooch may be out of the running, but there’s still a lot of competition.
It’s not the guy in charge of our nuclear arsenal, who may or may not have realized that was the core of his job description before accepting the post (Rick Perry). Nor is it the woman meeting with men’s rights advocates (Betsy DeVos). And it’s not the guy who keeps adding financial assets and meetings with Russian officials to his federal disclosure forms (Jared Kushner).
It’s neither of the guys rolling back climate change regulations and sidelining scientists at the Environmental Protection Agency and Interior Department (Scott Pruitt and Ryan Zinke, respectively).
It’s not the guy who worries that homeless shelters are too comfortable (Ben Carson). Not the guy arguing to dismantle lesbian, gay, bisexual and transgender rights (Jeff Sessions). Not the mastermind of the Bowling Green Massacre (KellyanneConway).
It’s not the fellow who built a media empire by playing footsie with the altright (Stephen K. Bannon). Nor is it even the guy whom a Nazi-allied Hungarian group claims as a sworn member(Sebastian Gorka).
To be sure, all these aides and bureaucrats are doing damage. They are degrading norms, enacting bad policy and putting our country and planetat grave risk.
But the “most dangerous” title belongs — aside from the tweeter in chief, of course — to someone in a much less sexy job, with a much less scandalous background.
It’sMick Mulvaney, director of the Office of Managementand Budget.
The threat Mr. Mulvaney presents is far greater than any of the slow-motion train wrecks happening elsewhere in the administration. That’s because he seems hell-bent on wreaking a global crisis within the nexttwo months.
Yes, in two months. That’s when the government will run out of money needed to pay bills Congress has already incurred, according to Treasury SecretarySteven Mnuchin, if Congress does not raise the debt limit.
What would follow? Just a constitutional, political and global financial crisis.
Arguably, the U.S. government would be in violation of the 14th Amendment (“The validity of the public debt of the United States .. . shall not be questioned”). The government’s ability to pay Social Security checks, interest on the debt and other basic obligations wouldlikewise be at risk.
Most important, this would irrevocably destroy the United States’ sterling reputation as a borrower.
U.S. debt is considered the safest of safe assets, so Treasury securities are the benchmark of the global financial system. Causing creditors to question whether they’ll receive full and timely payments would trigger panic in markets throughout the world.
The debt ceiling is a product of the misguided belief that limiting the official borrowing capacity of the government would force legislators into frugality, but it has done nothing to curb financial profligacy. Its chief effect is to periodically offer some political faction the power to take a very valuable hostage.
Mr. Mnuchin has urged Congress to pass a debt-limit hike with no strings attached. The government would thereby dodge default with minimal drama and withoutspooking markets.
Mr. Mulvaney has other plans. During his six years in Congress, he voted againstraising the debt limit four times. One might hope he was merely posturing, casting such votes with the knowledge that his colleagues would ultimately pass the bills. Unfortunately, as OMB director, Mr. Mulvaney has continued to be breathtakingly irresponsible with the creditworthinessof the United States.
In May, he publicly contradicted Mr. Mnuchin by arguing that a debt-ceiling increase should be coupled with divisive spending cuts, which would inevitably complicate an already politically fraught process.
And on Sunday, he told CNN’s Jake Tapper that Congress must not pass any legislation — not even a debt-ceiling hike — until the notoriously impossible Obamacare repeal is done. President Trump echoed this thinking on Twitter as well. No surprise, given that the self-proclaimed King of Debt has also been cavalier about the full faith and credit of the United States.
So long as Mr. Mulvaney has the president’s ear, we’reall living dangerously.
The threat Mr. Mulvaney presents is far greater than any of the slow-motion train wrecks happening elsewhere in the administration.