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The Next Global Crash

Brent Budowsky: Make no mistake: If the debt ceiling is not extended and America goes into default, markets and economies around the world will probably crash.

There is a real possibility that negotiations to extend the debt ceiling will fail, which would lead to the United States defaulting on its debt and crashing the American and world economies.

debt ceiling

The issue is not whether the cable news broadcasts the clock counting the minutes until it strikes doom. The issue is whether the United States of America will stop acting like a budgetary banana republic, whether our politicians will stop acting like King Louis and Marie Antoinette, oblivious to the hardships of the people of the nation, and whether our leaders are intellectually and politically capable of acting to promote jobs in the short term while assuring the fiscal integrity and stability of the nation.

Let me offer the dramatic suggestion that the president and Congress agree on an entirely clean four- to six-month extension of the debt ceiling. That they publicly begin a truly national dialogue on national television to address the deficit and jobs crises. And that leaders in both houses publicly commit to schedule votes regarding the deficit and jobs crises with unanimous consent to guarantee votes, with open rules that allow amendments, at least a month before the next debt-ceiling increase expires.

I am proposing that we interrupt the gaseous emissions of partisan spin, political punditry and media fluff about the latest polls, Donald Trump's campaign tactics, Charlie Sheen's police escorts, royal weddings, Lindsey Lohan's court appearances and where the president was born to begin a serious national discussion at a perilous moment when one great crash is receding but another is in danger of happening.

America urgently needs the one thing that has not even begun: a thoughtful national dialogue about how the nation balances the need to create jobs with the need to lower deficits in ways that have credibility and integrity.

Our situation today is akin to banana-republic financing. The national deficit commission has yielded to a Gang of Six, which operates in secret to fix the fiscal future of the nation. The Gang of Six might yield to a new Gang of Six, which would also operate in secret to fix the fiscal future of the nation. Or the second Gang of Six could become another commission, which would also operate in secret.

Of course, “secret” in Washington does not mean “secret” the way average Americans use the term. The special-interest lobbyists, who have done so much to cause the deficit, will learn the secrets. It is the American people who are kept in the dark, only allowed to see the final product, full of thousands of pages of cleverly written detail, voted on by many members of Congress who do not understand what they are voting on, with time frames for study measured in hours and threats of doom if members do not vote for a secretly written product presented to them with the authority of Moses presenting the Ten Commandments.

This formula for "governing" is a travesty of the American idea and a banana-republic process that has no credibility with financial markets. It fails to either create jobs or lower the deficit. It strikes fear in the hearts of both liberals and conservatives, who worry (correctly) that they are being conned; offends moderates who want reasonable compromise; has led the president to steadily declining favorable ratings; and led Congress to favorable ratings less than 20 percent higher than Gadhafi in Libya.

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Make no mistake: If the debt ceiling is not extended and America goes into default, markets and economies around the world will probably crash.

There is a better way, which is a clean extension of the debt ceiling for a limited period of time coupled with a genuine and serious national dialogue and drop-dead guarantees for legislative action after a serious discussion, involving the nation as a whole, including both jobs and deficits, allowing votes on competing amendments, ending both the secrecy and brinksmanship.

America does not need more gangs, groups or commissions acting in the dark. We need a full and thoughtful public discussion of the issues and options before us, broadcast live on C-SPAN and any television networks that choose to participate, aiming for the maximum public consensus, addressing both jobs and deficits, clarifying the choices we face and seeking a result of truly shared sacrifice and truly shared prosperity.

Personally I would suggest this roundtable include nationally respected leaders such as former President Clinton and former Senate leaders such as George Mitchell, Tom Daschle, Bob Dole and Howard Baker, along with responsible business and labor leaders and experts at creating jobs and lowering deficits.

Obviously we face very hard choices. Let’s end government by groups and gangs operating behind closed doors, and bring in the American people with a credible four- to six-month timeframe that guarantees action.

Brent Budowsky

To everyone in government in this tired town, I warn you: If you screw this up again, kids, the global economy could crash, and if you thought the last three elections were change elections, just watch the next one.

Brent Budowsky

Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy majority whip of the House. He holds an LL.M. degree in international financial law from the London School of Economics. He can be read on The Hill’s Pundits Blog and reached at