Home > 2011 > Personal Finance > Of Debt Ceiling Debates, Non-Denial Denials and Non-Default Defaults

Of Debt Ceiling Debates, Non-Denial Denials and Non-Default Defaults

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In 1980, Republican presidential nominee Ronald Reagan asked the American people: “Are you better off than you were four years ago….Is America more respected?” Fast forward to the cyber era of 2011, where anything less than real time is considered “so two weeks ago,” and weeks seem like dog years: are you feeling better now than you did four months ago? Do you believe that America is more respected in the world after our Debt Ceiling Smack-down?

After weeks of histrionics and political brinksmanship that terrified consumers, roiled the markets and bemused and befuddled the rest of the world, our leaders have proclaimed that fiscal calamity has been averted and the budget debate has been altered forever.

How’s that working for you?

In the opinion of many friends and colleagues, we have just witnessed a circus that diminished our image on the world stage and, among the folks I have spoken with on all sides of the political spectrum, didn’t do a hell of a lot to improve their impressions of the American political process.

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And while we’re on the subject of the American political process, do you remember All the President’s Men? If you read the book by Washington Post investigative journalists Bob Woodward and Carl Bernstein, or saw the movie starring Robert Redford and Dustin Hoffman, the political drama of the past few weeks may bring back vivid memories of our dark and relatively distant past.

All the President’s Men chronicled the downfall of the Nixon administration from the botched 1972 break-in at the Democratic National Committee offices in the Watergate complex, to the elaborate and distracting White House cover-up, to the first resignation of an American President in August of 1974. There was intrigue, countless plot twists, shadowy foreign and domestic operatives, a slew of unforgettable vignettes and several turns of phrase within the story. The one that keeps coming back to me these past few weeks is the “non-denial denial.”

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The term “non-denial denial” was coined by Woodward and Bernstein to describe what most officials of the Nixon administration did when confronted by an awkward question or compromising fact: they didn’t deny it—and they didn’t admit it, either. They simply deflected the question by talking about some related aspect of the inquiry that could be framed in a positive light. They would then refuse to answer any other questions. This happened so often during the Watergate era that the “non-denial denial” has become a part of American political lexicon, though these days they are not as elegant as they once were. In recent years when confronted with a difficult question, many politicians routinely, lamely, and unabashedly … lie. It is as if decorum no longer requires any effort to sidestep an awkward fact—it’s become politically correct to let loose with an unblinking prevarication to score political points or reply to a tough question. If you have any doubt, just take a look at Politifact.org’s ever-growing list of falsehoods.

These past few weeks, however, we have witnessed a throwback to the halcyon days of the Nixon era and its parlance. What just happened in Washington was a non-default default.

OK, so we all know that there wasn’t an actual default. The United States will continue to fund Social Security, Medicare and pay interest to its largely foreign investors. But we also know that there was never a real chance that the debt ceiling would remain in a state of suspended animation. The only question was whose blood would be spilled during the course of a pathetic tug-of-war that would ultimately lead to the ceiling being increased.

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Non-Default Default (cont.) »

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