The Debt Ceiling Crisis: “Live and Let Die” , “Let it Be” or “Helter Skelter”?

The Debt Ceiling Crisis: “Live and Let Die” , “Let it Be” or “Helter Skelter”?

By:

Robert Crossen

 Obscure Midwestern Economist

Date; August 20, 2011

The circus is over fpr now and many comments have beeen made. Many parties have been blamed. As for me, I provide the following comments.

#1 Live and Let Die: No deal by August 2, 2011. Government spending essntially ceases, aside from Debt Service and selected payments. Financial chaos, end of the American Dream (again).

#2 Let it Be: Deal. But it could take many forms. High probablity -  Smoke and mirrors, kick the can down the road. Medium Probability –  More smoke and mirrors, kicking the can down the road, both sides declare victory. Low probability, but rising to high as each day passes – Some or all of the following: Default on U.S. Debt. Default on many U.S. Obligations to American citizens, municipalities, foreign governments and higher interest rates, civil unrest, or maybe no one will care.

#3 Helter Skelter: Mint “seigniorage and profits” are deposited in the General Fund as miscellaneous receipts. United States Mint Public Enterprise Fund (PEF) statute, 31 U.S.C. 5136.

“Pursuant to the United States Mint Public Enterprise Fund (PEF) statute, 31 U.S.C. 5136, all receipts from fines assessed under the regulation would be deposited in the PEF and the Secretary of the Treasury would transfer these amounts, along with regular United States Mint seigniorage and profits, to the General Fund as miscellaneous receipts.[1]

As miscellaneous receipts in the Treasury—the drawing of funds from which are subject to appropriation by Congress—neither the Secretary of the Treasury, nor the Director of the Mint could be subject to “possible temptation when [their] executive responsibilities may make [them] partisan to maintain the high level of contribution” from the assessment process provided for under the regulation. Cf. Ward v. Village of Monroeville, 409 U.S. 57, 60 (1972). Moreover, the amounts involved would nonetheless render any ostensible temptation inconsequential because the relatively small amounts that the United States Mint could be expected to receive in fines payable under 31 U.S.C. 333 would be de minimis when compared to the recent amounts ($600-800 million) that the United States Mint annually has transferred to the General Fund.“ 72 FR 60771 (2007).[2]

So these are pretty tough choices. Winners and losers in all three scenarios. In any event, whether under Marshall law or some type of strict public curfew rules ther will be an election in 2012. May be this way we can avoid all of those campaign commercials and robo phone calls urging everyone to vote for “America’s Choice Candidate X”.

This is extreme right? This could not possibly happen! Just like the Financial Crisis of 2008. This is the black swan of all black swans for the United States of America. Expect the unexpected. Most pundits, financial experts, political experts and all those with reality blinders on will see these words and scoff. The political environment and process in the United States has evolved into the biggest and most ridiculous reality show on earth. I would rather watch The Bachelorette (gag).

Option #4. Let’s Call this Show “Fools on the Hill”

As a child growing up in the Chicago area, I watched “Bozo’s Circus”. The Bozo Show was WGN-TV's first live half-hour cartoon showcase titled Bozo, hosted by character actor and staff announcer Bob Bell in the title role performing comedy bits between cartoons, weekdays at noon for six-and-a-half months beginning June 20, 1960.[3]

http://www.google.com/One of my favorite parts of the show was the Bozo Drum. The drum was one of those circular wire cages that had a kind of trap door on it. It had this handle that could be turned so the cage would spin around and mix up all the cards with names and addresses it contained. Games on the show included the "Grand Prize Game" created by Sandburg, whereby a boy and girl were selected from the studio audience by the Magic Arrows, and later the Bozoputer (a random number generator); to toss a ping-pong ball into a series of successively numbered buckets until they missed.[4] Prior to the “Grand Prize Game” Bozo would say ‘Let’s go over to the Bozo Drum” spin it and pull out a card with some viewer’s name on it. The viewer would win the same prizes as the contestant.

This is what we see in Washington today. First we do have a circus, let’s not give it a name we can have a contest for that later. Second we have all sorts of contestants, the President and all members of congress. Third Inside the drum There could be cards with “Spend”; “Cut”, “Spend and Cut”. Of course at the start ther would have to be an equal numer of cards for each category. Let’s see, we can make it easy since these Fools on the Hill can’t count anything but votes, hmmm. Yes my dear Fools that means an equal number of cards for each category lets settle on 50 (one for each state). If we run out Bozo will supply more!

Now we are getting to the exciting part. We need to devise a way to pick a contestant for the game. Hmmmm. We’ll do away with the “Magic Arrows” and “Bozoputer” for the sake of simplicity. Let’s have the top three, the President, Speaker of the House and President of the Senate each flip a coin and the ODD man/person (no pun intended) can rotate as contestants.

Ok back to the show! Now Bozo spins the drum and opens the little trap door. The contestant reaches in and pulls out just one card. Viola, one of the for categories is chosen and we move on untill the Federal Budget is balanced. Problem solved! Now the Fools on the Hill keep rotating through until we eliminate the deficit! Bob Barker would love this!

Oh darn, one thing I missed, Who will be Bozo?

Answer: Please submit recommendations. Right now my dog Sparky takes the spot.

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[1] http://www.correntewire.com/coin_seigniorage_and_irrelevance_debt_limit

[2] http://www.correntewire.com/coin_seigniorage_and_irrelevance_debt_limit

[3] http://en.wikipedia.org/wiki/The_Bozo_Show

[4] http://en.wikipedia.org/wiki/The_Bozo_Show