Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

July 20, 2011

Too big to fail: Washington edition

by Quincy

From Megan McArdle, a list of reasons why the Federal Government is too big to fail (or even pause):

  • 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 US.
  • 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 so, it won’t be going to the unemployed people.

Now, how many of the companies that leftists were screaming were “too big to fail” could have had one one-hundredth the impact of a Federal Government failure? Yet these same leftists who recognize too big to fail as a bad thing want to endow the Federal Government with ever more power. Amazing.

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  • tkc

    What I find amusing is the number of things on that list that the government has no business doing and the things on the list that the government has gotten itself involved in only to botch it.

  • tkc

    “The nation’s nuclear arsenal is no longer being watched or maintained”
    Who are we going to nuke? Who are we going to nuke 10,000 times? The nations nuclear arsenal should be severely reduced. Maybe if the government did this it wouldn’t have to spend so much on watching and maintaining it.

    “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.”
    Maybe if the government didn’t criminalize so much then the federal prison system would be a lot smaller. Especially the failed war on some drugs. Again, decriminalization of all manner of things would make the federal prison system smaller and cheaper.

    “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.”
    I especially love this one. Ya know, having the border control stations manned has only resulted in what, 12 million or so illegal immigrants? If the government shuts down it won’t be able to do something it sucks at. Get me the world’s smallest violin for this complaint.

  • tkc

    “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 US.”
    Being the worlds policeman has been for affordable and successful. Not.

    “Our embassies are no longer operating, which will make things difficult for foreign travellers.”
    The only one I can’t think of a snarky response to.

    “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!”
    James Madison summed these up nicely with, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on the objects of benevolence, the money of their constituents.”

  • tkc

    “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.”
    Bailout nation is already doing wonders for the prospects of my bank account. Specifically draining it when the bill comes due for this folly.

    “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.”
    25,000 security violations later and granny gets her diaper checked. Bang up job you’re doing there. Besides, the 4th Amendment is just so antiquated.

    “Unemployment money is no longer going to the states, which means that pretty so, it won’t be going to the unemployed people.”
    Paging Mr. Madison again.

    Come to think of it, McArdle has come up with a pretty good list of why the government should fail. It already has.

  • http://pith-n-vinegar.blogspot.com/ Quincy

    Come to think of it, McArdle has come up with a pretty good list of why the government should fail. It already has.

    Failure is such a harsh word. Really, they just responded to the incentives of those in power while hurting the rest of us. And they responded well indeed. So really, everything you cite is a smashing success!

  • http://thelibertypapers.org/ Brad Warbiany

    tkc,

    I want to see pretty much all of the changes you mention… But “flipping the switch” on those changes is going to generate so much pain that the voters will see to it quickly that it turns around. And they’re going to place the blame squarely on Republicans, elect a bunch more Democrats, and (while I’m no fan of Republicans) we’ll end up with worse than what we even have now.

    It took 100 years to put together the progressive liberal society of the US, we need at least a few decades to walk it back. McArdle made that point in the original post — even if you think these programs SHOULD go away, trying to do it all at once is going to create so much backlash that it can’t be done.

  • Dr. T

    The federal government is too big to survive, not too big to fail. Megan McArdle makes the absurd assumption that federal government failure is equivalent to an instantaneous shutdown of all federal functions and lockdown of all federal facilities. Has she never heard of bankruptcy proceedings, receiverships, or phased transitions?

    The activities of a failed federal government could either cease (TSA, DEA, ATF, Dept. of Education, and HHS are good examples) or get transferred to state governments, local governments, private corporations, and citizens.

    The assets of a failed federal government could be purchased by state governments, local governments, corporations, or citizens. The proceeds would pay off creditors. Extra monies could be distributed to taxpayers (the equivalent of corporate shareholders) based on their average federal tax payments over the previous three years.

    When can we start?

  • http://pith-n-vinegar.blogspot.com/ Quincy

    tkc and Dr. T,

    I used McArdle’s list to make a different point. I suggest you go back and read her entire post. It’s actually quite reasonable.

    Also, Dr. T, it’s perfectly possible that the US Government is simultaneously to big to fail and too big to survive. In fact, I believe that’s the case.

  • Akston

    Also bear in mind the standard tactic: First, threaten to cut programs which are highly visible, inexpensive, and have large constituencies. “Want us to cut? Ok, we’ll start with 911 service.”

    Fear will snap those voters back in place.

  • http://pith-n-vinegar.blogspot.com/ Quincy

    Akston, good point. Funny how a government “too big to fail” serves the interests of the ruling class so well.

  • tkc

    I understand McArdle’s point but the way she chose to make it was rather amusing. Given the list, all but one of the items I found problems with. If the government corrects these problems then it is quite possible that it will correct the debt problem in the process. As she points out, no one wants to do that so the problem will persist until the broken government is forced to stop completely.

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