You assume that public outcry would have made it necessary to eventually make up for any missed payments.
Drop the eventually, they would be made up almost immediately. And that assumes there was any need to delay them in the first place. Debt payments, current contractual obligations, social security, and military salaries probably could have been paid out of revenue. I would hope things like farm price supports just stop, but realistically even if they couldn't be paid during the debt limit fight, they would get paid as soon as it was over.
Ideally a debt limit should be taken seriously by everyone involved. The problem with this case is it wasn't taken seriously by almost anyone when setting budgets, all the spending, all the spending promises, just ignored it or assumed it would be raised. Then all the sudden some people want to take it seriously and the transition is jarring.
Such transitions are more jarring because of the size of the federal government. If their is some federal budgetary crisis, it has a lot more impact when the government is involved in everything, and spends 20 to 25% of the GDP. That's one more reason to have a much smaller government, but I don't expect to see that happening. Perhaps it could slowly shrink by this measure, as it grows but slower than the economy, but it would still be huge, and the pressure of entitlements is pushing the opposite, pushing the government to grow faster than the economy. |
