Debt Ceiling Inaction Plan

I am watching with amazement the debt ceiling drama unfolding in the USA.  It is weird to think what a credit downgrade might mean for the reserve currency of the world - USD. Many international financial mechanisms (as I understand it) are built on the USD. The world will face a choice of trying to keep them going with a bad currency, or trying to rebuild international institutions from scratch on alternate bases, or giving up.

In essence, the situation of the US government is not unlike my household with a new child.  We have gone from two full-time incomes and no idlers, to one full-time, one-part time, and one unemployed. (All he does is eat and sleep.  He pays no taxes. He contributes nothing.) The choice we face is to either:

• liquidate our assets (realising a hefty loss) and move to a lower cost lifestyle, 
• moving to a lower cost lifestyle by eating less, driving less, turning off the heaters and lights and doing no washing, not seeing the doctor, not getting immunisations done, making no progress on our existing debts (paying interest-only), although it is unlikely that all this can be brought under our current income, or
• accepting that we will earn more in future years, and increasing our total debt for the moment.

We are choosing the last.  The first two are panicky reactions that would almost certainly be significantly injurious long-term.  To some extent, we could have been wiser, perhaps in years gone by - in the house we chose and so on.  But from where we are now, a little debt is very affordable.

I saw reports of a freshman Congressman hoping aloud that the Lord would bless the economy measurably when his side, the 'No Increase' Tea Partiers won the contest.  If they do win, the Obama Administration will have to administer the obligations of the US Government with insufficient funds - anything up to 40% too little week to week.  I recommend an 'across the board' approach:

• All military members, recipients of social security, welfare, medicare, medicaid and members of congress go in a lottery and 40% of them get nothing.  Maybe if their ID number ends in 6,7,8 or 9.
• US Government Bonds the same.

These are the ridiculous options that the Obama Administration is going to be forced into. It's like me having to sell the house and not take my wife to the doctor and put her back to work in a couple of months to avoid adding $5000 to my mortgage. It's just a pity there is no instrument to default on recipients of the Bush tax cuts.

As I said to a friend this morning, the hope that the Lord would bless a move that forces welching on obligations to debt-holders, to employees, and to aid recipients because you believe He is first and foremost against 'socialism' is a position so confused that I hardly know how to undo it.  First, he is pro-socialism.  He invented it - look at the redistribution of wealth in the Jubilee laws, and then again the practice of the early church. Second, a vote against the debt ceiling increase is a vote against the sick, the poor, the unemployed, and the rich who have opted to do business with you on your terms. He is the Friend of all these categories.

(My one small hope in this calamity is that it may punish Wall Street for its irresponsibility. In the Old Testament, God's judgement against one nation is usually meted out by an even more rabid nation, and Wall Street has got away with being clever and reasonable and offering excellent deals after damaging the global economy with terrible judgment. It would be good to see Terrible Judgment disable them.*)

*pun intended.