…..to put it politely. Many unwashed tea party patriots claim that it would be no big deal if the Federal Government defaults on its debt because there would be enough to pay the salaries of soldiers, social security for Seniors, interest for Bond holders and medicare/Medicaid.
But that is about it. McMeghan lists some of the things that wouldn’t get funded in a default:
Let's think through what would happen if we tried to use this plan:
- You just cut the IRS and all the accountants at Treasury, which means that the actual revenue you have to spend is $0.
- The nation's nuclear arsenal is no longer being watched or maintained
- The doors of federal prisons have been thrown open, because none of the guards will work without being paid, and the vendors will not deliver food, medical supplies, electricity,etc.
- The border control stations are entirely unmanned, so anyone who can buy a plane ticket, or stroll across the Mexican border, is entering the country. All the illegal immigrants currently in detention are released, since we don't have the money to put them on a plane, and we cannot actually simply leave them in a cell without electricity, sanitation, or food to see what happens.
- All of our troops stationed abroad quickly run out of electricity or fuel. Many of them are sitting in a desert with billions worth of equipment, and no way to get themselves or their equipment back to the
- Our embassies are no longer operating, which will make things difficult for foreign travellers
- No federal emergency assistance, or help fighting things like wildfires or floods. Sorry, tornado people! Sorry, wildfire victims! Try to live in the northeast next time!
- Housing projects shut down, and Section 8 vouchers are not paid. Families hit the streets.
- The money your local school district was expecting at the October 1 commencement of the 2012 fiscal year does not materialize, making it unclear who's going to be teaching your kids without a special property tax assessment.
- The market for guaranteed student loans plunges into chaos. Hope your kid wasn't going to college this year!
- The mortgage market evaporates. Hope you didn't need to buy or sell a house!
- The FDIC and the PBGC suddenly don't have a government backstop for their funds, which has all sorts of interesting implications for your bank account.
- The TSA shuts down. Yay! But don't worry about terrorist attacks, you TSA-lovers, because air traffic control shut down too. Hope you don't have a vacation planned in August, much less any work travel.
- Unemployment money is no longer going to the states, which means that pretty soon, it won't be going to the unemployed people.