Geithner and Debt: A Better Analogy
By David Henderson
I posted last week on the dispute between Treasury secretary Tim Geithner and U.S. Senator Pat Toomey and argued that Toomey got the best of Geithner in the debate. I quoted this argument that Geithner used against “prioritizing” federal government revenues to be paid as interest on the debt:
A homeowner could decide to “prioritize” and continue paying monthly mortgage payments, while opting to cease paying other obligations, such as car payments, insurance premiums, student loan and credit card payments, utilities, and so forth. Although the mortgage would be paid, the damage to the homeowner’s creditworthiness would be severe.
I pointed out the problem with this analogy. But now that I’ve thought about it more, I’ve got a more a propos analogy.
A homeowner could decide to “prioritize” and continue paying monthly mortgage payments, while opting to cease buying concert tickets, buying a new car, going on trips to Europe, spending money at a tanning salon, buying expensive Champagne, and paying gangs to prevent powerless people from using marijuana.
Or, to get beyond analogies, here’s what Geither could have said:
We in the U.S. government could decide to “prioritize” payments of interest on the debt but only by cutting foreign aid to Israel and Egypt, ending the wars in Iraq and Afghanistan, bringing the troops homes from Asia, Africa, and Europe, ending subsidies to farmers, getting the federal government out of schools, getting the U.S. out of the United Nations, the World Bank, and the IMF, ending the Department of Energy, and quitting paying gangs to prevent powerless people from using marijuana.
HT to Tom Lee.