It’s Really Up To Corporate America Now To Make Sure The US Government Doesn’t Default
And we’d better hope the nation’s CEOs are working the phones tirelessly right now
Because some politicians really do seem to be big enough idiots that they’re willing to let America crash and burn based on supposedly sacred “principles” they don’t ever follow when they’re in power.
But never mind that for now.
First, let’s make it crystal clear why a default would be so devastating that it cannot be allowed to happen:
- The US enjoys a unique and deliciously unfair (speaking as a US citizen) over every other country in the world in that a massive majority of all transactions are done in US dollars. Meaning there’s always a demand for dollars, and it’s always easy to figure out what a dollar’s worth, and it’s always a lot. There’s even a term for it: exorbitant privilege. As the Chinese government snarkily points out, it only costs about 17-cents for the US to print a $100 bill. Yet there are tons of people and countries willing and often compelled to pay $100 or more for it if their credit isn’t great. That’s a massive bargain deal for the US government. And US consumers. And US corporations. Should the US default, suddenly no one would really know what a dollar is worth. Could be anything. Even if nudnik politicians are willing to risk that, are the biggest and strongest corporations in the world?
- US government bonds are considered the safest investment in the world. If the US defaults, that immediately becomes untrue. And forever. It won’t be able to be undone ever. All the riches that pour into the Treasury both from US investors, 401Ks, overseas fortunes, whatever, look to go somewhere else, because they don’t want to risk a repeat, meaning the US then has to pay tons more to lure them back in order to pay its debts. Which of course blows the budget deficit up to unheard of dimensions. So it’s automatically the opposite of what Republicans say they’re trying to achieve. Also, is anything then safe?
Big business tends to like Republicans, we all know this. But they can’t like where Republicans are headed at this moment in time, except for keeping the big Trump corporate tax cuts in place.
I’ve always argued and will continue to argue that’s an easy one: let them keep those tax cuts. Just add a condition: something that says keeping the huge cuts comes with a requirement they’ve got to make stuff and hire people in the US. If they ship jobs overseas, they lose that benefit. (Still their choice so not socialism!) But ship jobs overseas; lose those tax cuts. In fact, Trump said he was going to do that. But turned out to be a lie when the bill was passed. Now Trump’s cheerleading a default.
But anyway, it’s hard to see an environment where big business by-and-large, likes the prospect of defaulting. Even a little bit. And I’d imagine there’s a lot of stepping up right now that we don’t even know is going on. Because there should be. There better be.
Because clearly there are some in Washington who are ready maybe even aching for “crash and burn”. Partly posturing, but partly because they don’t know what they’re doing besides seeing red and raising havoc. But a lot of even those folks get donations from a lot of big businesspeople who yeah, kind of want them to go in this direction, but not as far as a default. Because that would be too stupid.
Part of the problem of being a politician these days at least at the federal level is there’s really almost no real job left to it. Almost all of the money is already spent. There’s almost no point anymore running for federal office if you expect to make any really substantive changes involving spending that’s not emergency spending. Which is at least partly why so many lunatics are filling the slots in Washington as they come open. Because they don’t care about substance and building things up, only rabble-rousing and tearing things down. I said this a lot when Trump was president, but he’s left this legacy behind: it’s a lot easier to demolish things than build them. And that includes society.
If there has been any time in history for America’s CEOs to rally and do something good for the country–even if they’re just doing it because it’s good for themselves–it’s now. Do they still have the influence? Or have the monsters they’ve helped create cut themselves completely loose?
Only one way to find out: exert all the influence you’ve got.
Get to it.