Imagine looking out your window and seeing a bunch of boys playing “cops & robbers” with toy plastic guns. Then, you realize the immature, incompetent boys have REAL guns. What could go wrong?
That’s the way I see the Congressional debate to raise the debt ceiling. Republicans are wrong . . . this time! Democrats were wrong . . . last time! The out-of-power party becomes feckless and craven in an effort to embarrass the in-power party. The good of the country is immaterial.
Many fret that failure to raise the debt ceiling would be “catastrophic.” If it would be that bad, don’t you think the stock market would reflect that? No, failure to raise the debt ceiling would be a major nuisance, no doubt. Another government shutdown, of course. Some Americans going without government transfer payments, yes. Endless heart-breaking stories on television, yep. Endless recrimination — So what?
In the world of free-market capitalism, the value of bonds already issued would decrease and future bonds would have to pay higher interest rates. In the world of Modern Monetary Theory, that will not happen, as the Fed will simply pay whatever would normally be paid. The debt ceiling lost some of its bite.
No, failure to raise the debt ceiling would NOT be catastrophic. Instead, it would be STUPID!
The debt ceiling was created by Congress and can be eliminated by Congress. It serves no purpose and can be eliminated by “reconciliation” without a 60-vote super-majority in the Senate. Do it! Please take this gun away from those immature, incompetent boys & girls in Congress!