There's no evidence that chronic debt is making us better off.
The only argument to continue with chronic debt is that it gives us instant gratification -- like doing nothing to reduce carbon emissions.
Outgo exceeds income. Has Yellen submitted a plan of what she would actually have to do to comply with the debt ceiling?
The choice has to be to cut spending to whatever point would yield the $$$$ necessary to pay the current debt due to creditors. The simplest "plan" would be to identify the amount needed to pay creditors, then cut this amount from all the spending, for no-matter-what, and do it
across-the-board to everything without distinction of any kind.
That would fix the immediate crisis, and it could be done. And no matter what instant-gratification damage it causes -- you can scream bloody murder all you want -- the fact is that not doing this would produce even greater damage later, probably less than a year, after creditors get stiffed and there's no more borrowing at all. In which case the future pain would end up far greater than the temporary pain immediately in order to pay the current debt obligations.
There's no argument against this other than to scream and scream, realizing that if this did not happen, the screaming later would be even greater still. Of course you can wish that someone in Congress would change their mind -- Reds or Blues -- to allow the debt ceiling to be raised. But that's irrelevant to the question, which is: What if the debt ceiling does not get raised? what then? And the answer is that we'd have to endure the severe spending cuts, like it or not, in order to be able to pay the creditors -- and so
there would be no default! Because not paying them would cause a still greater calamity.
Everyone knows this, and so there'd be no choice except to do this, and it would have to happen even if it means that the President illegally impounds funds in order to do it. And, there'd be no legal action to actually stop him, even if some formal action should be initiated -- it would be symbolic only and would be dropped. And everyone knows that the President would have no other choice, so no real action would be taken to stop him. Even if the Congress somehow had power to order him arrested by the Marines or someone (which it doesn't), it would not do so. He would have to do it in order to prevent the country from collapsing even worse a year or so later.
Somehow everyone would have to suffer through the difficulty of the reduced budgets. And one way or another, virtually everyone would continue working, because they'd have no choice. In fact, those few who quit would quickly be replaced, so the necessary work running the country would still continue.
Most U.S. soldiers, sailors and airmen get free food and board, so they don't need their salaries. But stopping all those paychecks would only save what? $2 billion per week?
It is mathematically impossible for the debt payment need to be so large that it would exceed the current spending level on programs. Of course you could argue that if the timing is exactly wrong, the immediate payment to creditors is high, on a certain day or hour, compared to the momentary spending need at that exact point in time.
However, it's ludicrous to suggest that those making the allocations are incapable to see ahead a week or two in order to recognize when the spending cuts must begin. You can't seriously suggest that they would do absolutely nothing ahead of time, not even a few days, planning ahead when to start the program cuts. To believe that, you must suspect Biden's appointees have a malicious desire to destroy the country, like many Red fanatics believe. Probably even one week's advance foreknowledge of the upcoming payments due would be enough to see what program cuts will be necessary, on which day, in order to free up enough $$$$ to meet the upcoming debt payments.
In formulating your doomsday scenario, you have to remain within the bounds of reality.
The shortfall is much larger than that.
It's not possible for the debt payments due to be greater than all funds available for near-term programs. Those funds will have to be cut sufficiently to meet the debt payment need.
And even a week's delay in soldier paychecks would cause consternation.
"And there shall be wailing and gnashing of teeth." But twice as much, and no end to it, if the drastic spending cuts are not done.
Stop all Medicare reimbursements?
Stop, reduce, or delay. Along with all the other payments to be stopped, reduced, or delayed.
I suppose the "logical" procedure would be across-the-board haircuts: Pay 40 cents on the dollar in the paychecks of our fighting men, 50 cents on the dollar for Medicare reimbursements, 75 cents on the dollar to SocSec retirees — some of them really need the money. Reimbursement of food stamps could be delayed indefinitely. A few measures like this and outgo could be brought down below income. (Income would also be falling however, as tax clerks begin quitting in anticipation of paycheck cuts.)
Those who quit would be quickly replaced by someone who'll agree to be paid half as much, and probably longer hours, until the worst of the crisis is over.
Is this what you have in mind?
It's what has to be done if the chronic debt problem is to be corrected. Which it has to be, unless your philosophy is
"Aaaaaaa, who cares? In the long run we're all dead!"
And that is the only reasoning anyone ever gives why we don't have to put a stop to the runaway debt.
The President effectively has power to impound funds, because it would take police action to stop him, and there would be no such action. The Congress would be unable to authorize its own "police" to seize the President in order to stop him. What would happen is that there would be legal challenge, theoretically based on the law prohibiting the President from doing this, but no action taken to stop it, and the legal action would finally fail, as everyone would recognize that it had to be done. And even though some members of Congress would pretend they could stop him, they could not. The main reason he could not be stopped and the Congress could do nothing about it is that virtually everyone would recognize that in this case it was the only option -- no other choice.
Biden or any President, Republican or Democrat, would recognize that it was the only alternative.
Setting aside the platinum-coin solution which solves the problem at once, it might seem that there is "no other choice" than to plunge the country into chaos and recession.
Yes, into a lesser "chaos and recession" than it will be plunged into if the creditors are not paid, or long-term if the chronic debt problem never gets fixed, which it never will if we continue on doing what we're doing. And "in the long run" the no-limit debt course we're now following will do more damage than a course which puts an end to it and imposes modest restrictions on the borrowing, which we don't have yet.
Of course you can still always fall back on the traditional argument that
"Aaaaaaaa, in the long run we're all dead, so forget it."
But recall that the whole debt ceiling is a pointless anachronism.
translation: "In the long run we're all dead anyway!"
Even though the "debt ceiling" is technically an illogical solution, or not the most efficient solution -- how often does the government come up with the most efficient solution to anything? -- the fact still remains that it puts some limits to spending, or curtails some spending, and communicates that there is a limit to debt. And the public probably would oppose simply eliminating it without replacing it with something else, or a new kind of "debt ceiling" or limit that might be more logical. Any politician who preaches to simply put an
End to the debt ceiling! will have difficulty getting re-elected.
It is better to reform the "debt ceiling" and promote making it more reliable, or more efficient than the current flawed "ceiling" and to introduce some new measures to restrict debt from growing so fast and driving up the debt-to-GDP ratio.
And do you really think that "Moscow Mitch" McConnell has no other choice than to plunge the country into chaos, for . . .
Maybe, if the only alternative is Bolshevik Bernie.
for no purpose except to ... what? ... promote civil war? Foment even more hatred of government than Americans have already?
Of course Blues have their Bash-McConnell fix and Reds have their Bash-Pelosi fix, and both are equally right (or wrong). And simply put, each side has the same fix: banish the other side from having any power and keep stampeding more of the masses into your camp. Once the other side is totally vanquished, we'll finally achieve utopia -- i.e., the Blue or the Red Utopia.