For the last several weeks, you can't turn on the TV news or pick-up a newspaper without hearing about the fight to raise the debt ceiling. Most economists tell us that the failure to raise the ceiling would cause the US to default on its debts and this would cause catastrophic problems worldwide.
I am not an economist (and no, I never played one on TV either -- it just seemed like a catchy title), but what would be so bad about defaulting? I ask this seriously because we constantly hear that the government should be run like a corporation and when a corporation finds itself with more debt than assets, what does a good corporation do? If it can't bribe the Washington elite to grant it a massive taxpayer bailout, it files for Chapter 11 bankruptcy!
Some of the biggest players on Wall Street have utilized Chapter 11 to get things in order and then to come out of the other side looking rosy. So, if Chapter 11 is good enough for the likes of Delta Airlines and General Motors, why not the United States Government?
I realize that, if the government filed for Chapter 11 (or Chapter 7), the little people -- folks like me -- would be screwed big time. The court would see to it that the big dogs of the corporate world got their money back and that would leave next to nothing for you and me. However, the ways things seem to be going right now, it looks a lot like that anyway.
I just don't understand why fiscal conservatives -- the ones who demand that government be run on a business model -- haven't broached this idea at all. Filing for bankruptcy protection is an important tool in the corporate toolbox. So, why not show that the federal government can be run like a corporate monstrosity by utilizing this tool as well?
I am not an economist (and no, I never played one on TV either -- it just seemed like a catchy title), but what would be so bad about defaulting? I ask this seriously because we constantly hear that the government should be run like a corporation and when a corporation finds itself with more debt than assets, what does a good corporation do? If it can't bribe the Washington elite to grant it a massive taxpayer bailout, it files for Chapter 11 bankruptcy!
Some of the biggest players on Wall Street have utilized Chapter 11 to get things in order and then to come out of the other side looking rosy. So, if Chapter 11 is good enough for the likes of Delta Airlines and General Motors, why not the United States Government?
I realize that, if the government filed for Chapter 11 (or Chapter 7), the little people -- folks like me -- would be screwed big time. The court would see to it that the big dogs of the corporate world got their money back and that would leave next to nothing for you and me. However, the ways things seem to be going right now, it looks a lot like that anyway.
I just don't understand why fiscal conservatives -- the ones who demand that government be run on a business model -- haven't broached this idea at all. Filing for bankruptcy protection is an important tool in the corporate toolbox. So, why not show that the federal government can be run like a corporate monstrosity by utilizing this tool as well?
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