What’s the Plan After Default?

September 25th, 2011 at 10:00 am | 41 Comments |

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David Frum writes:

Tip O’Neill, the former speaker of the House, was asked at his retirement in 1987 how Washington had changed since he arrived in 1953. He answered, “The people are better. The results are worse.”

What he meant: There are many fewer drunks in government than there used to be. Fewer crooks. Fewer ignoramuses. Fewer cheaters and sexual harassers. Yet back when Congress contained many more drunks and crooks and cheaters, nobody doubted that it would vote to pay the American national debt. This summer, a better educated, more sober, more honest, and probably less adulterous Congress pushed the United States to the verge of national default.

Back in 1953 Joe McCarthy was in Congress. But even he didn’t suggest lowering the federal tax rate to zero, as Congresswoman Bachmann proposed the other day.

Imagine a Congress composed of Michelle Bachmann, Alan Grayson, Keith Olbermann, Michael Moore, Rush Limbaugh, and Grover Norquistk. Could be fun, huh?

Actually, I think it’s not a bad analogy, Joe McCarthy and the debt-ceiling destroyers. In both cases, you have congressmembers going beyond what anyone might ever have thought possible. Also, in both cases, it’s not quite clear what the aggressors’ goals are, or what they would they do if they were to “win.” McCarthy appeared on track to continue finding Communists everywhere with no end in sight. As for Bachmann et al.: What would they do after the U.S. defaulted on its debt, after the government stopped paying teachers, cops, soldiers, etc.? At that point, a follow-up crusade against gay marriage would be a bit of an anticlimax, no?

Originally posted at The Monkey Cage

Recent Posts by Andrew Gelman

41 Comments so far ↓

  • Rossg

    Hmm…It’s hard to know where to begin regarding Congresswoman Bachmann. Actually, I suspect her proclamations will become progressively more strident the further she fall in popularity as a presidential candidate.

  • Graychin

    Chris Wallace nailed it – Michele Bachmann IS a flake. Trying to make sense of her ramblings, is a futile endeavor.

    Direct your attention elsewhere, Mr. Gelman. Rick Perry and Mitt Romney don’t make any sense either, but critical analysis of their shifting political philosophies would be a lot more challenging for an astute observer such as yourself than this silly Bachmann-bashing.

  • Steve D

    1. Somebody needs to close out the italics tag.

    2. This is exactly what I used to ask campus radicals in the 1960′s about their revolution that was going to sweep away the System. I’ve heard that Lenin once said anyone who asked what would happen after the Revolution was a reactionary. I guess anyone who asks what will happen after default is a liberal.

    Try this for a plan. If a unit of government defaults, all the residents of that unit can legally default on their debts?

    • Banty


      A lot of the Tea Party zeal is the sheer thrill of opposition. To refer back to that era (which, I still suspect, entertained this way many who grew older to be Tea Partiers), it’s a happening, man.

  • baw1064

    Why does a Federal tax rate of zero need to be the end point? Surely we could make it negative–have the government sent everybody a check in proportion to their income. Call it a “job creation reward.” What’s Michele Bachmann waiting for?

    • gocart mozart

      Since all tax cuts create more revenue, logically, a tax rate of zero should raise an infinite amount of revenue. We will then be able to afford to build the much needed border wall with giant moat filled with robot sharks that shoot lasers from their eyes. This will create many jobs AND keep out the illegals.

      Vote Gocart 2012

  • Now How The Hell Did That Happen? – Textual Fisticuffs

    [...] Frum posted the text of a speech he gave at Western Ontario University yesterday, but Andrew Gelman has called out what I think might be the most interesting part. Tip O’Neill, the former speaker of the House, [...]

  • SteveT

    Even the super committee is likely to make so many cuts that it will adversely affect suburban America i.e. the GOP stronghold.

    Sigh. This is what happens when so many voters believe untruths.

    I wonder how many people are aware of how much Federal Income Tax they pay? I bet most people: 1. Get their check. 2. Aware are of what’s withheld. 3. Assume it’s all Federal Income Tax. 4. End of story.

    A lot of people screaming about the 50% not paying taxes are probably themselves not paying taxes (taxes in both cases being Federal Income Tax). It would be great if we could all get a printout of how much we pay, and how much we are receiving in benefits, including subsided roads, federal dollars to your state, county, city. Everything compared to the cost of a totally privatized, Randian economy. I bet a lot of people would be surprised to see their figures in red making them welfare recipients.

  • Dragonfly

    Bachmann is a lawyer – we do not need a lawyer or a career politician for president.

    America needs a person who has BOTH great business schooling AND great business experience.

    • ram6968

      the govt is NOT a business….the president can’t run around demanding the congress do what he says……get educated

      • Dragonfly

        LOL – you’re out of your mind.

        If it had been Romney versus Obama, Romney would know to question if a company had a good business plan prior to doling out half a billion dollars to Solyndra, not that Romney would have in the first place.

        That is just the tip of the iceberg as to why it is important that a president knows about business. Our nation depends on the success of business, and for you to think the head of the nation………………

        I think you need more than an education – you can stand to get some common sense, as well.

        • SteveT

          I disagree with you as well Dragonfly. I think most of the posters on here would as well as the commentators, Frum for sure.

          Knowing something about business and finance is certainly important for the President. It’s a skill that should be self evident when he is listening to his advisors, not just nodding along.

          The government is not a business. To start a business has only the bottom line. Building value for it’s shareholders. Layoffs when revenues drop is a sensible way to run a business.
          How does that translate into running a country? All the citizens are of equal value, bottom line or not. When times are hard you can’t lay them off.

          I’m not going to insult you.

        • Banty

          People who think running a business means they can run an economy, is like the mill owner thinking he understands the whole water cycle, for having built a mill on the stream.

        • lilmanny

          They did have a good business plan: build high end, efficient solar panels that the Chinese can’t. Since the Chinese control over half of the solar panel market, doing something they can’t is about as good a plan as you are going to find. The crash in prices of solar equipment doomed them, not the lack of a business plan. The Chinese subsidize their solar manufacturing sector to the tune of $30 billion per year and the industry employs more people than coal or steel in the United States, so what business education are you talking about that would tell anyone to not invest?

          But I know you have a fake scandal that you want to push so don’t let me get in your way.

        • ottovbvs

          “I think you need more than an education – you can stand to get some common sense, as well.”

          Well yeah Herbert Hoover and Neville Chamberlain had loads of business experience. Your role models presumably?

    • lderse

      Yes, like a business…. Then they can raise prices just like an insurance company , oil company etc.

  • Frumplestiltskin

    Come on people, all yee of little faith. This is exactly what will happen in the event of a default.
    Default, then ?, then profits.

  • rbottoms

    You keep voting for the GOP and expect different results.

    And Michael Moore is fat.

  • valkayec

    Andrew, if I may be familiar, your article is a unique bit of sarcasm but very light on information or political history. I’m not trying to be sarcastic myself or to criticize you unfairly. Most blog posts are short and limited in information these days. I, however, prefer informative, instructive blogs – but that’s my own personality flaw.

    After reading your post, I read a rather long (3 page article) on the NY Times website: Whatever Happened to the American Left? (http://www.nytimes.com/2011/09/25/opinion/sunday/whatever-happened-to-the-american-left.html?_r=1&hp). Although long, I enjoyed reading the article for its informational and history value. I learned things I had not previous known.

    My hope is that you and those of your compatriots will be so inclined to provide more information, including historical perspectives, in future posts to enlighten your readers and inform the national conversation.

  • buddyglass

    What would they do after the U.S. defaulted on its debt…

    I don’t think this is a mystery. If she had her way, she’d get rid of the entire federal entitlement infrastructure. Medicaid, Medicare, Social Security, SCHIP, federally subsidized housing, federally subsidized student loans, TANF, food stamps, Title X grants, federal unemployment insurance. She’d get rid of the Dept. of Education and maybe the EPA. If the disappearance of all these expenses managed to balance the budget then she might stop there. If it actually created a surplus then she’d cut taxes. Most likely those on corporations or the wealthy.

  • JohnMcC

    After a default? Isn’t that when Grover Norquist drowns the government in a bathtub and Jesus comes back and everything is good?

  • paul_gs

    The only fault with these stories is that the United States was never at risk of defaulting. Repeating it over and over doesn’t make it any less true.

    And not to defend Ms. Bachamann, but she never advocated zero taxes. Might not hurt to brush up on one’s reading comprehension before posting such obvious nonsense.

    • busboy33

      Were we at risk of being “forced” into a default? Technically no. But we were at risk of being forced into either paying our debt (avoiding default) or paying our other bills. Since we weren’t going to stop paying for prisons, the FAA, border patrols, etc. . . . we WERE facing default, it just wasn’t going to be a “forced” default. We could have avoided it by lighting ourselves on fire, sure . . . but we weren’t going to do that.

      • paul_gs

        No, there was no risk of default. Social Security checks might not have gone out for a few days but that’s about it.

        It’s a nice story to claim the US was facing imminent default in August, unfortunately for the story, it wasn’t true.

    • PracticalGirl

      I think you earned every dollar, you should get to keep every dollar that you earn.
      —Michele Bachmann, to 6.1 million American voters as they tuned into Fox News GOP Debate

      What part of this doesn’t advocate zero taxation? It may not be what she meant, but for those who would say this was just an “off-the-cuff” gaffe, hear what she’s repeated over and over again:

      “President Bachmann will be banning the teleprompter at the White House,” she told supporters in New Hampshire. “You’ll be getting uncut, uncensored–you’ll be getting the unvarnished truth out of the White House because that’s what the American people deserve.”

      I’ll take her at her word. Bachmann gave me the unvarnished truth about what she believes at the debate. Just because she’s horribly wrong doesn’t mean it isn’t message she was trying to convey.

      • Rossg

        Anybody who is vying for the presidency, if they think they don’t need to ponder and craft their messages with care, are just fools. Businesses don’t operate in an off-the-cuff manner.

      • paul_gs

        Practical Girl, it is foolish to claim Michelle Bachmann advocates zero taxation.

        Ms. Bachmann doesn’t advocate zero taxation, to suggest otherwise is dishonest.

        • PracticalGirl


          I wasn’t the one who gave 6.1 million Americans the impression that I think they should keep “every dime they earn”- it was Bachmann. She’s the foolish one, and the worst thing about it is that she did it knowing she had a huge audience who typically do not fact check what they hear and while playing for applause. She went for cheap emotion as a substitute for substantive talk, and that’s as intellectually dishonest- bankrupt, really- as you can get

          I’m also not suggesting that you are defending Bachmann beyond trying to straighten out her meaning while she obviously panders to the crowd. But this is a pattern of hers: Outlandish claims, patently false statements…And it’s never about Bachmann being wrong, just “misunderstood”. But how many more times can people explain what Bachmann “really” means? She’s given us her own edict” Pure, unvarnished truth whenever she opens her mouth. Or did she “really” mean that she’d do that only once she reaches the White House?

          C’mon- we expect more public accountability from PTA leaders in this country than we get from a Republican candidate for President of the United States? Sad.

        • paul_gs

          Anyone who watched the debate knows that Ms. Bachmann never advocated zero taxation.

          Only those who never actually saw the debate fell for the cherry-picked and quoted out of context sentence. People like you.

  • ottovbvs

    Of the people listed only one of them is in congress and that’s Bachmann. I’m not sure what Gelman’s point is here? That there are a lot of loony Republicans with zero economic understanding like Bachmann walking the halls of congress? Not exactly breaking news I’d have thought.

    • paul_gs

      Exactly otto, we need some more of that genius Democratic economic thinking which sunk $500 million into Solyndra. Genius, absolute genius.

      • PracticalGirl

        OK, paul, Mr. Get To The Truth:

        Which genius administration initiated and pushed the Solyndra deal, and which one inherited it? And make a point: Solyndra represents 1% of all the funding from this particular program. Does that necessarily mean that the other 99% will be/has been wasted?

  • PracticalGirl

    Of course, we know the effects of a default but I don’t believe that President Obama will let it happen.

    What should happen if Congress forces a default? Last year, The House of Representatives passed HR 5072. In part, the focus of this bill is to prevent homeowners who strategically defaulted on their mortgages from accessing FHA and other government programs, given the negative effects caused to the real estate market and increased costs on other borrowers. Ironically, it also abolished the position of a Federal risk manager for FHA, but that’s another story…

    So, if Congress decides that a strategic default on our debt is necessary, perhaps they should be prevented from accessing government services as a result of the possible damages. No pay, no benefits. 94% of them decided that this would be good recourse for Americans who looked at an unwinnable situation, determined they couldn’t afford to pay any more and decided to walk away. I just think they should live by their own rules, if they decide NOT to pay that which we can.

  • Banty

    “The only fault with these stories is that the United States was never at risk of defaulting. Repeating it over and over doesn’t make it any less true.”

    Only in the most extremely limited sense. We can pay interest to our bondholders, but the very same bondholders observing that the US is defaulting on other obligations that are legally set by acts of Congress, would have destroyed their confidence in their next payment. Or any other debt obligation for that matter.

    Individuals can’t even get away with, for example, defaulting on their mortgage, without other credit being impacted.

    This idea that bond holders would sit pretty in this situation, because they got their interest this time around, is naiive in the extreme. And bond holders aren’t the only creditors. So, yes, the US would have defaulted.

    “And not to defend Ms. Bachamann, but she never advocated zero taxes. Might not hurt to brush up on one’s reading comprehension before posting such obvious nonsense.”

    Please do tell what she was talking about when she answered the question about the earned $1.00 bill during the debate.

    • Rossg

      Never at risk of defaulting?

      I double-checked by email archive and found that I have the following reply, this past August from U.S. Senator:

      “Though many in the Obama Administration have called on Congress to raise the debt ceiling, I will only consider voting for the increase if significant spending cuts and an ironclad balanced budget rule is included. ”

      Thought the debt ceiling debate was about providing funding for debts duly authorized by Congress, this Senator seems content to default, unless they get what they want.

      If any of us tried to do this with our own debts, who would be wrong for labeling us irresponsible?

    • paul_gs

      Sorry, Ms. Bachmann never advocated zero taxes. It just isn’t true.

      And no, the US did not face default. That is a narrative Democrats constructed but one that is not rooted in reality.

      At most, social Security checks might not have gone out for a few days but that’s about it.

      • DifferentFrumer

        Oh? Maybe I was watching an Onion version of the debates wherein Bachmann said something like, “I think Americans should keep every penny they make.” That sounds like zero taxation to me. What was it – 10 million people watching that debate?

        • paul_gs

          You claim you listened to the debate. What else did she say?

          Did anything else that she said back up your preposterous claim that she supports zero taxation? Anything???