Default, Abstraction and Reality

I have a hypothetical for you parents out there, particularly those, like me, with three kids.

Let’s say these three siblings are sitting on your living room floor on a lazy summer afternoon haggling over which board game to play. Two of the kids want to play Clue; one wants to play Monopoly. Now this kid really wants to play Monopoly, so much so that he refuses to even consider playing Clue, even just for a few moments. The other kids don’t especially want to play Monopoly, but for the sake of domestic peace they offer a deal. We’ll play Monopoly for two hours if you’ll just play Clue for 30 minutes. The third kid screams, “No,” and whips out a lighter he stole from the kitchen. “You’ll play Monopoly, and only Monopoly, right now. Or I will set both these games on fire and let the rest of the house burn.”

Which of these little darlings would you punish and/or send directly to the Ritalin factory?

I think this scenario is useful in understanding the “debate” over spiteful default on national debts that we can easily afford to pay. Let me repeat that: when you hear “don’t raise the debt ceiling,” you should actually hear “default on our debt, wrung up by caring for old white people and covering the globe with our military, just because we feel like it.”

Let us recap the structure of constitutional government for a moment. With our bicameral legislature, three lawmaking entities have a role in producing federal legislation. They are the House of Representatives, the Senate, and the president. The House and Senate must agree on a bill, and the president must sign it into law, just like SchoolHouse Rock envisioned.

Raising the Roof: Principle or Politics?

Illustration by Bill Rapp, Third Way

Thus, when these parties negotiate something, basic math would dictate each lawmaking element should get a third of what it wants. In an abstract world, because Democrats control two of the three elements via democratic election, they should get two-thirds in any compromise on cutting the debt. Instead, for reasons that escape me, Democrats have already agreed to give Republicans more service cuts than even they want they want in exchange for various upperclass tax increases. The balance would be 75 percent cut, 25 percent tax. And yet, no deal. That is because self-described conservative Republicans, as demonstrated by their actions, care only about protecting the immediate economic interests of very wealthy inheritance babies and dubious moguls like J.D. Alexander and Rick Scott. For the J.D.s of the world to “suffer” is a deal breaker.

If conservative Republicans cared about the deficit, they would not have launched two wars and a giant medical entitlement for old people on borrowed money. And if you cared about the deficit, Mr. Tea Party Republican, you would have stopped voting for them. You do not, and you haven’t.

What’s going on here is that conservative Republicans are trying to bluff backbone-challenged, or big-money-loving, Democrats into doing their dirty work on Medicare and Social Security. They will then use that dirty work against Democrats and Obama in the 2012 election, just like they did in 2010.

Instead, if conservative Republicans really want to privatize Social Security and gut Medicare for everyone under 54, while also sending them the bill for those over 54, (That’s the Paul Ryan plan. Go look it up.) they should win an electoral victory that gives them a filibuster proof margin to do it–just like Democrats did with the stimulus and health care–and then live with the consequences.

In any event, I’m rooting for failure in the default hostage standoff. If I were the negotiator, I’d say, “Screw you. Shoot ’em, big man.”

That’s because, as I mentioned, we have no problem right now either paying our debt service or borrowing money at advantageous rates. And because conservative Republicans care only about protecting the immediate economic interests of wealthy people. On no planet we call Earth will their benefactors actually allow them to default on our debt. Gratuitous default on debt wrung up by old white people and our military adventures, which continue to be, by far, our largest source of ongoing expense, would seem quite likely to cut off money to those expenses. More importantly, it would also stiff bondholders–otherwise known as wealthy individuals, corporate and government investments, and pension funds, all of which invest their money with rich people. As a result, rich people and old people alike will object to the idea of Dennis Ross and his pals setting our house on fire–once they actually realize what it means. (Rich people already realize. Believe me.) Do you think that Dennis Ross, with his malleable sensibility and endless stream of business-backed campaign contributions and taste for the House cafeteria will face down that objection and vote to set our national house on fire? Ain’t. Gonna. Happen. Just like killing SunRail didn’t happen, Tea Suckers.

Instead, you’ll likely see some sort of awful deal muscled through by “centrist” Democrats–who so often snatch defeat from the jaws of victory that one wonders how much they consider it defeat. Or you’ll see some sort of highly choreographed, symbolic default that conservatives can pin across their loins before capitulating to money.

I certainly prefer the second. The best way our of cutting our debt in the near-term is to do nothing and simply let all the Bush-era tax reductions–for everybody–expire. Then we need to scale down our global military obligations, and tinker with Medicare in an ongoing way until we finally realize that single payer health care is the only real way to hold down general medical inflation, which is what drives Medicare’s costs. But all of that, with the exception of the expiring tax cuts, should pale in comparison to tackling unemployment. And if the private sector won’t do it, government needs to.

What’s that you say? We can’t do that because our debt will crush us; the stimulus failed; you can’t raise taxes in a recession? Tune in tomorrow, or the next day, when I hold your hand and walk you through all these things you think you know because you’ve heard them from the news porn channel owned and overseen by the same people who illegally hacked the cell phones of 9-11 survivors, murder victims, and anyone else they felt like exploiting.


Creative Commons License image credit: Bill Rapp, Third Way

3 thoughts on “Default, Abstraction and Reality

  1. I used to be a hard-core fiscal conservative until I realized that those rich politicians have nothing in common with me, other than skin tone, and are only out to make themselves richer.  

  2. You’re awsome man – now get on twitter and help me get Dennis Ross (a nice guy btw) and his bravado and s*** talking under control!  Thanks Billy

  3. “until we finally realize that single payer health care is the only real way to hold down general medical inflation”

    Despite all the evidence available that making healthcare a truly free market benefits everyone, you still stick to this old saw?

    Q: Why did Lasik get so cheap and defy your “medical inflation” principal?
    A: Because it’s an almost unregulated market: http://goo.gl/ga7Ep

    Q: Why are lab tests at private testing facilities getting cheaper in defiance of your medical inflation principal?
    A: Again, because the market for such tests is more free since you can self-order many tests: http://goo.gl/sGdfy

    I’ve got many more, but in the spirit of brevity I’ll leave the readers to do just a little searching on their own. It won’t take much.

    I work hard to supply my family with excellent medical care within the boundaries of the system available to me. But you would blithely subject me to the whims of a centrally planned system and remove from consideration the choices that I would make for me and mine. You would subject me to bureaucratic rationing http://goo.gl/mPBCA just because you think it’s a good idea that someone plan something as complex as our medical care. Despite the staggering failures of central planning documented too many times to list here, you still refuse to learn the lessons of history. Should you and your ilk, who have the hubris to believe that you can make other people’s choices for them, be successful in your pursuits for control over the rest of us, I hope that you receive in full measure the deplorable conditions that you will ultimately visit upon the rest of us.

    Wake up Billy! Even that paragon of socialized medicine Canada is moving towards free market reforms. Canadians who can pay for it are tired of the need for medical tourism to the US to get treatment, and those who can’t are fed up waiting in line.

    P.S.
    I used the Google URL shortener to make the post a little more readable. If you’re worried about clicking shortened links (which you should be) you can expand those at http://longurl.org/ before viewing.

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