The Atlas Shrugged Party looks like it’s barreling full-tilt to an economic shutdown–an Atlas Shrugged scenario for real–in a couple of weeks, and here’s Jon Favreau’s advice to President Obama:
[A] failure to raise the debt limit would inflict far more pain on far more people than a government shutdown. Breaching the debt limit would trigger an economic shutdown of epic proportions. The president used that phrase, “economic shutdown,” in a speech last week. He should keep using it. The White House should say it every day, as should everyone who wants to avoid such a calamity. Because it happens to be true.
According to Favreau, here are the consequences of an economic shutdown (a debt default):
Without enough cash on hand, the government would be forced to delay indefinitely Social Security checks, the ones our grandparents depend on to put food in their mouths and a roof over their heads. Veterans who served this country would stop receiving the benefits they earned, and the men and women in uniform risking their lives for us wouldn’t get paychecks.
Every company in America that does business with the federal government, of which there are hundreds of thousands, would not see their contracts paid on schedule, an effect that would ripple down to their employees and their families. With each passing day, making our debt payments to businesses and governments around the world would become more and more difficult. When the world stopped seeing the United States as a safe and reliable place to invest, the cost of borrowing money would skyrocket for every single American—whether it’s a home mortgage or a personal credit card. And those high borrowing costs, coupled with billions in delayed income for seniors, soldiers, small-business owners, and their employees, almost surely would send our economy and the world’s into a crisis even deeper and more dramatic than the Great Recession of 2009.
This is the precipice over which the Republican Party is near to taking us. It’s the Samson option–bringing the temple down upon one’s own head as well as everyone else’s–and is akin to the Atlas Shrugged myth. It’s a willingness to let the world be destroyed in the name of principle. It lacks proportion because it is fueled by fanatic abstractions, straining out all gnats to swallow its singular camel. It’s the dysfunction we’re all confronting; an intraparty crowd effect impervious to critical thinking.
What’s the most reasonable response to this sort of political fever? How do you limit its damage and keep it from spreading? There was talk last year of Obama issuing through the Treasury a trillion dollar coin, bypassing the Congress altogether. It’s gimmicky, but maybe that would work.