Debt Ceiling

Some people wonder how we are to fix the problem with the debt ceiling.  I think that a long term solution involves abolishing the Presidency and changing the way that Congress is selected.  We would then move to a parliamentary system of government where the parliament is selected as I have stated in the past.

The public should vote in order to determine the proportion of legislators who will retain their positions.  We dismiss the appropriate number and fill vacancies at random from a pool of candidates who have demonstrated that they have the knowledge necessary to handle the office by obtaining a minimum score on an exam.  The voting public could also decide what a minimum score would be.

As for the more immediate problem, I don't believe that the president has the right to default on the debt.  Payment on the debt is required by law.  He would have to decide on what other payments he was going to forgo.  He might start with reductions in national defense.  He could bring our soldiers home from Iraq, Afghanistan, Japan, Germany and all other foreign countries around the world.  He could cut the programs that Republicans would least like to have cut.

Some have argued that huge cuts to government programs would have a devastating impact on the economy.  I doubt this.  If the government were to cut, then this would make it easier for others to borrow and would reduce the expectation that the government would tax in the future.

Even if the president were to take this as an opportunity to default and then blame the Republicans, which I don't think is legitimate, this would primarily effect the interest rate that the government had to pay.  The fact that the government refuses to pay its bills doesn't provide any information about the tendency of other private individuals and companies to do so.

In any case, I don't think such a default would survive legal challenge.  There are well established legal principles that government debt is binding.  Government debt is something that the government is required to pay.  Other expenses, like national defense and social programs are optional.

In case anyone thinks that entitlement programs will be exempt from the axe, they are mistaken.  Some see Social Security as a savings program, where workers make contributions during their working years and then draw these out during retirement.  There have been actual court cases that covered this very subject.  The programs have the legal status of social programs and the contributions that of taxes.  People are not really entitled by law to benefits.  If someone is kicked out of the country somehow, they are not owed any money by the government.