Arnold Kling  

A Default Scenario

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Economists and Influence, A De... Quiggin on the Caplan-Quiggin ...

There is a compendium of papers in Econ Journal Watch on the prospects for a U.S. debt default. Garett Jones and I authored two of the papers. We discussed the topic on Friday with Reihan Salam. A preview is below. The entire 40-minute video is here.


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COMMENTS (3 to date)
NormD writes:

There are Republicans who oppose any tax increases because they are convinced, based on excellent evidence, that any tax increase will simply be spent wastefully or stupidly or on projects other than what was presented.

In this situation starve-the-beast is the only real choice. Not the best, the only.

Having spent half my career as a manager, government stinks like an organization where you could fire half the people actually increase output. I have never ever seen any situation where giving a bad manager more resources ever yielded anything positive.

NormD writes:

Question:

Would it be such a disaster if the US defaulted?

Why is it economists are all in favor of creative destruction when it comes to business but never apply the same thoughts to government?

I have worked at companies that were forced to restructure. In each case they did everything they could to avoid failure, but once it happened, they downsized, refocused, restructured and came out healthier.

The same could apply to government.

People who loan us money are just allowing us to put off our problems.

Robert Easton writes:

I would be interested to see more of these conversations if you record some but will comment that the audio quality is very poor in this one, and wasn't ideal in the previous video linked to. Using headsets with microphones rather than the computer built-in microphone would, I suspect, greatly improve this. How feasible that is with different guests each time I don't know.

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