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ANYTHING PEACEFUL

Default Not Inevitable

JULY 27, 2011 by SHELDON RICHMAN

Freeman columnist Don Boudreaux puts the “default” scare into perspective in an op-ed in The Daily. Choice quote:

After paying creditors [in August], the government will have $87.8 billion on hand in ready cash in August to spend on its myriad programs — such as Social Security, wars in the Middle East, subsidized farming and maintaining a court system. With an un-raised debt ceiling preventing the federal government from borrowing more money, it will indeed be unable to fund the full range of these programs.

To renege on promises to pay subsidized farmers and other non-creditors, however, is not to default; rather, it’s to belt-tighten.

Election after election, Americans go to the polls and elect representatives who frequently promise to make the “tough choices” about allocating scarce government revenues. Now is the time to make those tough choices.

ABOUT

SHELDON RICHMAN

Sheldon Richman is the former editor of The Freeman and TheFreemanOnline.org, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families.

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