It seems the Senate came up with a plan of sorts to save the nation from economic Armageddon. Naturally, a few dozen members of the House of Teaparty wax dummies had to be placated less their fee-fees be hurt and it fell apart. Which leaves one day to get it together and maybe one weekend before things really start approaching irreversible. The scariest thing is, the same denial that’s been nurtured and developed for everything from evolution to climate science is not being being brought to bear on this issue and against Republicans who do not show proper fealty for the crazy caucus:
CNBC — Senator Richard Burr, Republican of North Carolina, a reliable friend of business on Capitol Hill and no one’s idea of a bomb thrower, isn’t buying the apocalyptic warnings that a default on United States government debt would lead to a global economic cataclysm.
“We always have enough money to pay our debt service,” said Mr. Burr, who pointed to a stream of tax revenue flowing into the Treasury as he shrugged off fears of a cascading financial crisis. “You’ve had the federal government out of work for close to two weeks; that’s about $24 billion a month. Every month, you have enough saved in salaries alone that you’re covering three-fifths, four-fifths of the total debt service, about $35 billion a month. That’s manageable for some time.”
The growing popularity of these pseudo-econmics demonstrates a profound misunderstanding of how debt markets work, and that’s a hopeful way of saying it. It doesn’t matter to one’s credit rating if they only miss three-quarters of their bills, that rating goes down, making borrowing more expensive and eventually impossible. Furthermore there is no way to distinguishes between various bondholders and the Treasury’s vast payment system is not set up to make partial interest or Social Security payments.
This all is so well understood by debt markets that underlying bonds from the US will begin falling in advance of the event, not afterward. That’s what will start happening soon, and it’s so widely known and there are so many examples of it, we have to consider an even more chilling possibility than willful ignorance: premeditated economic murder. The Teaparty knows the economy will fall apart and they or some significant potion of them want it to, that’s their strategy.
There’s method in the madness. If the economy falls apart, Teaparty elites like Cruz may figure they have a chance to manipulate the fearful electorate and seize total power for their interests on a wave of racist hatred and violent propaganda. It would be the end of this experiment in democracy and the beginning of our own version of the dissolution of the Soviet Union or worse, probably worse. On the latter, imagine an equivalent Teaparty platform during the height of the Cold War, where even as NORAD reported missiles arming and locking on US targets, Teaparty grifters hit the airwaves assuring the nation the Soviet Union didn’t really exist, it was all a WH led media conspiracy, and if they did, surely the commies had no nukes or bullets, so we can do whatever we want in the world without worry. Don’t worry, go shopping …
That would have been stupid, and so is pretending the bond market will stabilize or not be affected by a US shortfall of any kind. It will unravel, and left to its own would eventually drag us and the entire world into a depression of late Roman Empire proportion.
If this were to come to pass, Osama bin Laden will have literally won thanks to the likes of Ted Cruz and Rand Paul. and we’ll all be standing around like we always do asking “why didn’t someone stop it?”
Well, House Speaker John Boehner can stop it. If this grim view of current events is anywhere near accurate, let us hope he and others choose actual tangible love of people and country instead of blind fealty to rising Teaparty fuhrers. And unlike so many who had to risk their life trying to stop horror from unfolding, John Boehner’s worst fate is a gentle life in the well gilded halls of DC followed by a dream retirement on the most well manicured links the world has to offer, ensconced in luxury to his last breath, all on the dime of the generous US taxpayer.