As the debt ceiling talks slog on, the negotiations - necessary to stave off an unprecedented national default that could prove economically devastating - are testing the ability of leaders on both sides of the aisle to legislate effectively in an era of increasingly shrill and unyielding partisanship.
But what about the economic implications? Fareed Zakara talks to Tom Foreman on "In the Arena" about how the debt ceiling is "almost a sideshow" to the challenges of economic growth and job creation.
FOREMAN: Fareed, we've been hearing so much about what will go wrong if the debt ceiling is broken. And yet I feel this rising current of people saying, "Make no mistake about it – even if we solve this, there are going to be some hard times for this country as a result of the solution. "
ZAKARIA: Well, the debt ceiling itself is almost a sideshow. The fact that it has become center stage is just because one group, the Tea Party, within the Republican Party, decided to make it that.
The debt ceiling simply reflects the fact that we are spending more than we take in.
FOREMAN: And then we have an economy in shambles right now all over the country.
ZAKARIA: And that we don't have growth. The only way you're going to get this economy back on track is if you get growth. If you look historically, the times that the budget deficit has gone from being a number one concern to moving down when we've solved the problem, it's all been that we grew faster than we thought we would.
If you can get growth back, if we can get people employed, get them paying taxes, you can't cut your way to a happy future because the more you cut, you get yourself into a downward spiral like you see in Greece.
You know you - because what does it mean to cut government spending? It means to lay off people who now don't have jobs. They can't pay taxes, they can't go to the diner, they can't buy stuff. So it may work in theory, but in practice, the more you cut, the more you're depressing the economy.
FOREMAN: One of the predictions I've read is that the solution to the debt ceiling problem could cost us a million jobs over the next few years. We could lose, you know, what we've created in a very short period of time.
Do you think that's too dire? Do you think that's possible?
ZAKARIA: It depends on how much we cut and how fast we do. I think what President Obama has been trying to do - again, I think, quite wisely - is push some of these cuts off into the future. When you signal to the markets we're getting our budget deficit under control but don't do it in an economy that is fragile right now.
But if we were to precipitously start laying off wholesale school teachers, firemen, policemen, then, yes, because all of a sudden you have fewer people paying taxes, you have fewer people buying goods, you have fewer people buying products.
We really need to look at what's happening in Europe. The governments that cut too fast too far actually depressed their GDP growth and increased their budget deficits as a result.
FOREMAN: Talk to me about some of these key building blocks that have to be restored. I have had many conversations over months where people have said, if we do not restore the value of housing in this country and the construction market, nothing else we do will solve this.
Is that a fair building block to begin with?
ZAKARIA: I think it's absolutely fair. The problem is it is the most difficult building block to restore because housing went through probably the biggest bubble since the 1920s. It burst.
If you look at the Nasdaq bubble, the Nasdaq bubble burst at its peak at 5,000. What is the Nasdaq now? It's 3,000. In other words ... 21 years later, you're barely halfway back to the prices. I'm not suggesting that will happen in housing.
FOREMAN: Well, it might, though. I've had experts in housing who said it could be 15 years before markets recover in some places.
ZAKARIA: Certainly it's going to take a while. And so then the question becomes what can you do? And people say well, you need a lot of government support. Maybe, but part of the problem was too much government support and too much government encouragement to people to take on large debts.
FOREMAN: Let's say we can't - let's say we can't tackle housing right now or up front, give me a couple other building blocks that you think are critical to address right now so that we get beyond, not just the debt ceiling fight, but our overall inability to create jobs. Every politician says we got to create jobs and not one of them seems to have a clue how to do it.
ZAKARIA: There is one absolutely, obvious way we could do it. We have an infrastructure in this country that is in shambles, OK, point one. Point two, we have 20 percent unemployment in the construction industry. So there are millions of people out of work in that industry. Three, 30-year money - 30-year bond rates are 2 percent. So you could borrow money at 2 percent for 30 years, rebuild American infrastructure, put people to work.
All expenditure is not the same. When you build a bridge or expand a highway that is going to increase economic activity for the next 100 years, that's called an investment. That's not an expenditure.
FOREMAN: And as you know it was the theory behind all those shovel-ready projects. The idea was we will have these projects and yet we found that ultimately even the president himself said not all shovel-ready were shovel-ready.
ZAKARIA: Well, not all shovel-ready was ready, but let's remember ... of the $800 million stimulus plan, only $100 million was infrastructure. Most of that has actually turned out to be on time and on budget, but it's a $14 trillion economy. People say why did China manage an infrastructure program that worked?
Well, here's the main reason. They spent 10 times as much as we did as a percentage of GDP. So – you can't expect to get a big bang by putting $100 billion into a $14 trillion economy.
FOREMAN: Let me ask you one last quick question here. Does it trouble you that we keep looking at all of this so much in terms of the politics, which party comes out wining in this whole thing? Because I'm just convinced that both parties ultimately lose terribly because we all lose with problems like this.
ZAKARIA: I think it's the worst part of Washington right now, which is that it seems as though - you take something like infrastructure. Republicans have supported something I've been pushing, a national infrastructure bank to finance this kind of infrastructure, so it doesn't cost the public much. The private sector would do it.
Kay bailey Hutchinson sponsored a bill, Chuck - Richard Lugar, Chuck Hagel all support it. Can't any traction? Why? Because Obama proposed it. And it seems to be now a kind of almost idea in the Republican Party that anything Obama supports, they have to oppose.
We have to get to a point where we can actually get the business of the country done and not worry about who's going to get credit for it because if we get into this game, you know, we've got - we've national energy policy we have to solve, we've to solve immigration, we've got to solve health care. We've got to get these jobs done. And oh, by the way, we've got to deal with the debt ceiling.
We can't worry about who gets credit. We need to get these things done too fast.