Would Default Really Be so Bad?

Unless congress raises the debt ceiling, the government will run out of money and be unable to pay its bills as early as June 1, according to Treasury Secretary, Janet Yellen. Would it really be so bad?

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  • alex_the_tired
    May 22, 2023 8:03 AM

    Taking as an axiom that the people who run the country are not the elected officials but rather the ones who own them, one of two things is unavoidable from this game of brinkmanship.

    First. The debt ceiling isn’t really anything that matters to the ruling class. As in Medieval Europe, Czarist Russia, and pre-Revolution France, famines don’t stop the parties. Zuckerberg owns an entire island. If he doesn’t have a herd of cattle on it right now, he can by nightfall. Stockpiling enough to wait out a five-year (or 10-year, or generational) global economic collapse in absolute, uninterrupted comfort is barely a blip in the expense column for him, or any of the rest who rule things.

    Second, there have been numerous instances throughout history of economic contraction being useful for the ruling class: as a means to consolidate power, destroy lower-order competition (look to the beginnings of the auto industry for a master class in that), and eliminate surplus-to-requirement workers.

    From those two points, the rest is left as an exercise for the student. What benefit does the ruling class have in triggering an economic collapse that they will, almost totally, be immune from the negative repercussions of? If you’ve been paying attention, the answer’s obvious.

  • As it is obvious that the super wealthy are richly prepped for such an outcome, I would not argue that many of them aren’t good with a collapse, though I would guess that a nation of crazies, armed to the teeth, might not be the best place to experiment with this. Eat the rich seems to be a common phrase these days and as we are no longer an agrarian nation with plenty of wildlife and people experienced with gardening and canning, that might literally be what happens to any of the rich caught out away from their private troops.

  • The budget crisis has been a perennial kabuki dance for decades. The intensity of the “debate” is proportional to the intention of the Dem’s to agree to further cuts to social programs (in order to “balance” the budget) in the standard attempt to obscure yet another betrayal of their constitutional bosses to the favor of their actual bosses. See “eating the rich,” above.

    • alex_the_tired
      May 23, 2023 7:25 PM

      In this case, I suspect, the damage to Biden and his reelection campaign from this debt ceiling debacle will be fatal to his second term. And this is still early days from the Republicans.

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