The problems with the argument Rob and others have been making that the government doesn’t have to default if the debt ceiling isn’t lifted ought to be so obvious we need not bother refuting it. But refute we must, which I do in a MWDN editorial today.
Just pay the bond holders and cut spending elsewhere, Rob says. But bonds aren’t the government’s only legal obligations. The guys building aircraft carriers, the surgeons operating on Medicare patients, the government retiree – all have contracts promising payments. The president is required by law to pay out money appropriated by congress.
If congress wants to cut spending, it can do so. Crashing the economy isn’t the way to do it.