Comment: The establishment narrative re the debt ceiling....

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The establishment narrative re the debt ceiling....

...is that anyone trying to use the debt ceiling as leverage for spending cuts is "holding America hostage" and risking default on the national debt. Rand's bill, which requires that the President prioritize interest payments on the debt, removes that rhetorical weapon from the hands of the establishment, and strengthens the hand of those conservatives and libertarians in the GOP who want to use the debt ceiling as leverage to get real spending cuts. This is the reason to support Rand's bill: it is a smart political move which effectively neuters the opposition, or at least forces them to come up with a new narrative.

Now, to be clear, this bill is not really about avoiding default, since there is no risk of default anyway. As I said, the idea that a failure to raise the debt ceiling will cause default is just rhetoric from the establishment. But why not default on the debt? Well, I'm in favor of defaulting on the debt in principle, but it can only be done in a certain way. Once we get the budget balanced at a low level of spending, and once we are seriously preparing for a return to the gold standard, then we can talk about defaulting on the debt - but not until then. Otherwise, if the federal government defaulted on its debts now, with the current monetary and banking system, the results could be catastrophic: complete collapse of the banking system and/or hyperinflation. That's to be avoided if at all possible, eh?

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."