Defaulting on the Debt Is the Moral Thing to Do, by Ryan McMaken

You are not liable for the government’s debts. From Ryan McMaken at mises.org:

The US is in the midst of yet another “debate” over the debt ceiling. In the twenty-first century, this is a ritual that Washington politicos and journalists go through every few years when the prospect of default and government shutdown is used as a way to hold Americans hostage until they cave to a debt-ceiling hike. I won’t bore you with the details of which politicians are voting against a higher debt ceiling this time around. Outside a tiny handful of principled eccentrics of the Ron Paul variety, virtually everyone in Washington favors more deficit spending. The fact that the leadership from one of the parties currently pretends to oppose higher debt levels tells us nothing about what the regime really wants.

What it wants, of course, is sky-high spending, forever, and it wants to borrow huge amounts—at rock-bottom interest rates—to do it. A default—brought about by a stable debt ceiling—would complicate that goal. A failure to hike the debt would also limit the power of the regime, so we can expect most everyone inside the Beltway to be deeply opposed.

So, it was not exactly a surprise when Janet Yellen took to the pages of the Wall Street Journal earlier this month to call for an immediate increase to the debt ceiling. She doesn’t hold back when it comes to predicting sure and immediate doom if the debt ceiling is not increased.

“Our current economic recovery would reverse into recession, with billions of dollars of growth and millions of jobs lost,” Yellen insists, and she predicts that

failing to raise the debt limit would produce widespread economic catastrophe. In a matter of days, millions of Americans could be strapped for cash. We could see indefinite delays in critical payments. Nearly 50 million seniors could stop receiving Social Security checks for a time. Troops could go unpaid. Millions of families who rely on the monthly child tax credit could see delays.

And if a financial crisis weren’t enough, Yellen claims the US “would emerge a permanently weaker nation” (emphasis added), supposedly because the US government would no longer be able to borrow more cheaply than its unnamed and ominous “economic competitors.”

Needless to say, this is quite the laundry list of ills all stemming from the fact the US government would have to live with spending only the $3.4 trillion or so that it collects in taxes. Not piling on an extra $1 to 3 trillion in debt on top of that every year? Why, that would just be madness!

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