Detecting a little nervous energy around here? This is why:
Moody’s Investors Service has placed the Aaa bond rating of the government of the United States on review for possible downgrade given the rising possibility that the statutory debt limit will not be raised on a timely basis, leading to a default on US Treasury debt obligations. On June 2, Moody’s had announced that a rating review would be likely in mid July unless there was meaningful progress in negotiations to raise the debt limit.
In conjunction with this action, Moody’s has placed on review for possible downgrade the Aaa ratings of financial institutions directly linked to the US government: Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks. We have also placed on review for possible downgrade securities either guaranteed by, backed by collateral securities issued by, or otherwise directly linked to the US government or the affected financial institutions.
Do you know what that sound is? Reality, like a windshield to a bug. Because bugs are pretty speedy thinkers, I’m sure they still get a few bug moments to say to themselves, “Oh, that’s weird, something is moving near me. Oh, there’s nothing there, I can see all the way to the back seat! HEY, WHAT THE F-”
Seriously, the window for action is shrinking quickly. If you have a moment, this insight into the delusional cult thinking on the right, whereas they tell themselves the little sippy cup will transport them to a better place with Nordu, the god of ten thousand living planets in the mysterious eleventh dimension (a deeper layer to our reality, curled up the size of a fingernail).
Then there’s Murray Rothbard, a von Mises acolyte whose intense libertarianism led him toward the posture that taxation is theft. Indeed, his contribution to this literature was to discover that since public debt is repaid at the end of the day by taxes, i.e., by stolen money, making such payments stinks of immorality. Bartlett then cites conservative financial analyst Christopher Whalen, who told The Washington Post in 1992 of default, “If it’s good enough for Mexico and Brazil, why not us?” Now, there’s a slogan one doesn’t hear often enough from conservatives: Let’s be the new Mexico!
In our current times, there is a quote from the Cato Institute’s John Tamny, who wrote in Forbes that for Americans to be concerned about a default is “like the parent of a heroin addict fearing that his dealers will cease feeding his addiction.” And finally, yes, there is a proper evangelical angle on all this too, just in case you thought that base wasn’t covered. Gary North, an “economist” who bases much of his work on his reading of the Pentateuch, especially Deuteronomy, leads the charge here. You can read his four-volume study Inheritance and Dominion: An Economic Commentary on Deuteronomy, which comes in at a bracing 1,700 pages. Or you can digest this more manageable piece, in which he avers that the United States would be a “utopia” if only a “Great Default” came along to wipe out all that debt brought on by old people, sick people, public employees, and foreigners.
If I had a nickel for every “taxation is theft” guy I’ve run into on the internet…
If you want to believe that the public debt is immoral and that taxation is theft, go right ahead and believe those things. But acting on them in a world that does not agree with you is a different matter. I can believe that driving on the left side of the road is a superior method of locomotion, but if I try it on the way in to work in the United States, I’ll be a public menace, endangering myself and my fellow citizens.
And yet here we are. Dozens of members of the United States Congress are driving on the wrong side of the road, forcing the rest of us into the ditch as they trundle on their reckless way. And the Democrats don’t know how to go to the American people and make these folks sound like the sowers of chaos they are? And the conventions of journalism require that they be given “equal weight” in analyses and discussions, and taken as seriously as the other side? We are a society in deep, deep trouble.
I think we’ve reached the point where we’re really talking about a financial 9/11 here. A group of zealots are trying to steer the planes into the frickin’ global economy. The nervous, smart ones are peeling off, but the zealots are still steering. If America can’t right itself within a matter of days, we are talking about September 2008 being a goddamn practice run.