At the water cooler today, some of my coworkers were under the impression having 306 billion dollars worth of bills and 172 billion to pay them would be a good thing. They said they knew this because Representative Michelle Bachmann and other politicians said so. One of those at the water cooler went on to say wholesale default would not happen and it was just a big lie made up by Democrats who wanted to go further into debt. Somehow, he thought if Bachmann and others could not make the President and Democrats take a machete to the budget without any revenue enhancements, paying half our bills was a good idea. He was sure default was a big joke.
He is not alone. 58 percent of Americans do not believe the failure to raise the debt ceiling would cause a crisis or major problems.
For a moment let us humor those Americans who do not believe default is an issue. Many economists agree, we can pay bond holders and not be in “technical” default. Let’s for a minute play Bachmann’s dangerous game. Let’s say we really don’t owe anyone but the credit markets and pretend we can teach those big spenders a lesson. Let’s play the half our bills game or more precisely let’s play the pay 56.2 percent of our bills. So, let the fun begin…
I guess you have to assume Bachmann, Jim DeMint and others plan to pay our interest payments so we don’t default. The interest payment is around 20 billion and that leaves us around 150 billion. Here, it is important to note the game if purely fictitious. No one advocating this game has spelled out which bills they would pay, we have only been assured some bills would be paid because the Constitution directs the President to do so. How is that for circular logic?
It gets interesting from here. If we ignore the throw momma under the bridge crowd will want to pay our Medicaid and Social Security bill at about 104 billion. They will probably want to spend on defense. The monthly defense bill comes to around 61 billion. We have exceeded our 150 billion by now and 15 billion worth of gas and bullets for the troops or something else will have to be cut. I am not sure how many soldiers will want to fight anyway because we don’t have enough money to take care of our veterans, a monthly cost of around 10 billion. Soldiers in theater may want to stay there however, because the homefront will be a little wild without federal police functions, law/order and prisons which run about 5 billion a month. This spending plan will also slow down progress on a real budget deal because there will be no money to continue general government functions including legislative costs at about 2.7 billion a month. I guess lawmakers like Bachmann will continue to work in the dark without staff.
Once you throw grandmaw under the bridge it gets a little easier. You only have to cut about 50 billion more to balance. Medicaid (28 billion) and welfare (36 billion) easily get you to balance. Bridges are going to get pretty crowded when the poor are added but, that is a waste of taxpayer money anyway. By eliminating the spending on these leaches on society, we are free conduct the rest of the government normally. Government services like transportation at 8.7 billion and education at 10.1 billion will continue. I guess the only drawback will be suffering corporate profits when grandmaw’s relatives quit spending from things like new cars to buy grandmaw’s food. We could call this the Logan’s Run option. You know the old movie with Farrah Fawcett where they made yummie food out of 21 year-olds. We’re just sending them to the bridge.
Does this sound wacky?
Well, Michelle Bachmann a Representative, Jim DeMint a Senator and others are advocating this approach. Bachmann is even a Presidential candidate who according to the Iowa Republican could expect 25 percent (first place) of the vote were it held today in Iowa. Talk like this is not only whacky, it is insane. When Americans hear talk like this from “respected” politicians it only validates their wild fantasies about government and spending. They have these fantasies because year after year, rhetoric from politicians reduces government to visions fat minority women with 10 kids on the public dole, government life cycle studies of fruit flies and bridges to nowhere. If we did not face a double dip recession or worse, it would be tempting to default. Since 58 percent of Americans believe government is useless, maybe we should let them see how life would be without half of it.