The markets have not yet reacted to the reaching of the nation’s debt limit, because Tim Geithner made arrangements for giving Treasury headroom until August and the fallout has already been priced in. They still view the likelihood of default as remote. Thankfully, they can see through the facade and recognize that the increase will pass and the gamesmanship isn’t real.

What feeds the gamesmanship is a media which has completely shifted their coverage of Congress and the economy in a matter of months. Deficit and debt stories are valued, as well as the outrageous comments that go along with them.

Major U.S. newspapers have increasingly shifted their attention away from coverage of unemployment in recent months while greatly intensifying their focus on the deficit, a National Journal analysis shows.

The analysis — based on a measure of how often the words “unemployment” and “deficit” appear in major publications — portrays a dramatically shifting landscape of coverage over the past two years, as the debate over how to fix the federal deficit has risen to prominence and the question of how to handle still-high unemployment has faded from the media’s consciousness.

National Journal compiled counts of articles that mention one of the words in their headline or first sentences in the five largest newspapers in the country by print circulation — a group that consists of The New York Times, The Wall Street Journal, the Los Angeles Times, USA Today, and The Washington Post. The data was taken over a period of roughly two years from April 15, 2009, to May 15, 2011, using LexisNexis, a news information service. The numbers exclude mentions that also used the words Europe(an) and Greece or Greek in an effort to focus solely on the domestic debate, though even with those included, the trend was not materially different.

Part of this is a chicken-or-the-egg problem; politicians will only discuss deficits and have abandoned unemployment and jobs, even on a rhetorical level. So there’s not much else for journalists to cover. But there’s definitely a feedback loop here. The discourse only focuses on deficits and debt, so the media only writes stories on deficits and debt, so politicians figure the only way to get attention is to talk about deficits and debt. And so on.

As long as I’m being guilty of this – right now! – by writing a blog post about deficits and debt, let me at least bring up two items. One, as Pema Levy writes, there’s a legitimate question as to whether the debt limit itself is constitutional at all:

This theory comes from the often overlooked Section 4 of the 14th Amendment, which states: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” […]

It’s hard to see why the debt ceiling, a congressional statute that could force the government to default on its obligations to seniors, the poor, the sick, and bondholders, is not similarly unconstitutional. “I think the Treasury would have a pretty good legal case,” says James Galbraith, an economist at the University of Texas, Austin. The administration could say to Republicans in Congress “this is all fun and games and we would like to have the debt ceiling increased, but frankly, the Constitution requires us to act in respect of the full faith and credit of the United States.”

Garrett Epps, a law professor at the University of Baltimore School of Law and a contributor to The Atlantic, agrees that Section 4 precludes the debt ceiling. “If a statute requires something that requires violating the Constitution,” Epps says, “the Constitution always trumps a statute.”

It would take some serious chutzpah to invoke Section 4 of the 14th amendment, but desperate times call for desperate measures. So it’s worth pointing out that, if this isn’t kabuki and Republicans really do want to effect a default of the United States’ financial obligations, there’s a way to defuse the bomb.

Which leads me to my other point: there shouldn’t be a debt limit.

The ceiling is entirely unnecessary for managing the country’s finances. Every year, Congress determines the government’s rates of taxation and spending, and therefore its surplus or deficit. Annual deficits accrue to the overall national debt, which Treasury finances by issuing bonds. The ceiling relates only to the total amount of debt the Treasury is allowed to issue. In and of itself, it does nothing to constrain spending, raise taxes, or otherwise improve the country’s fiscal situation.

The nonpartisan Congressional Budget Office may have explained the dangerous pointlessness of the debt ceiling best: “By itself, setting a limit on the debt is an ineffective means of controlling deficits because the decisions that necessitate borrowing are made through other legislative actions,” it writes. “By the time an increase in the debt ceiling comes up for approval, it is too late to avoid paying the government’s pending bills without incurring serious negative consequences.”

Saying that there should be no debt ceiling becomes elementary when you approach the possibility that it’s unconstitutional.

David Dayen

David Dayen