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 wonderfully unfair (speaking as a US citizen) advantage 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 China’s 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.