The Debt Ceiling

Conservatives like to claim they run the government like it was a business. Let’s try to relate the debt ceiling debate to a business.

But we’ve got a problem already: no business has anything like Congress. They have boards of Directors who work part-time. If the CEO disagrees with them on a major issue they fire him by simple majority vote. OTOH the US Congress is always on, consists of 535 members constantly looking for CEO mistakes, and about half of the time most of Congress wanted another guy to be CEO. Moreover if the company spends a dime it has to be traced to a budget they passed. Let’s just say we’ve got an Active Board.

Nine days ago Congress approved a budget. They knew that to actually implement the budget the company would need new lines of credit (ie: a higher debt ceiling). But they didn't approve those. Now, an entire nine days later, they're refusing to approve those lines of credit because they think the CEO spends too much. In the budget they approved.

They don't really know what is gonna happen if they don't approve the lines of credit. They tell themselves the CEO will "prioritize" spending and the banks will ignore the fact they're schizo as long as current creditors are paid off.

You get the idea.

I know it's not Obama's style, but IMO here's what he should do:
Insist that the debt ceiling be abolished completely since it's stupid, and tempts otherwise sane Congressman into doing stupid things. In the meantime he should reduce all spending by x% (where x% is the number required to keep going without new borrowing), including combat pay, social security, and his salary. The x% will be made up when Congress approves a) increasing the debt ceiling without conditions, or b) abolishing it.

The signal this would send to the market is that a grown-up is in charge and there's nothing to worry about.