Debt Ceiling Shootout

Debt Ceiling Shootout

It’s sudden depth on the debt ceiling. In role-based politics, about half the roles are conflicted about their views—not being solid red or solid blue.

Hyperpartisan parrots think people in these roles are stupid. We know better.

Welcome to Tiebreaker Tuesday.

Should we invoke the 14th Amendment
to avoid a
US Debt Default?

Why Care?

The last time the Government shut down, it hurt the economy, meaning workers, professionals, small business owners, and the stock market. 

And this time, we may default on US debt, which is about the same as a self-inflicted gunshot wound. 

A debt default risks the dollar losing its status as the world’s reserve currency. Perhaps the stupidest thing the world’s top superpower could do to itself. 

Is there a
Debt Crisis?

The US total net worth is $150T. The debt is $33T, but $7T is intergovernmental, so $25T is owed to others.

Of the $25T, about $7T is held by our foreign country trading partners (they have to put the dollars we give them somewhere).

The remaining $18T is held by Americans wealthy enough to buy US treasury bonds and notes.

The average US household has a net worth of $750,000. The average household debt is $100,000. So that’s a $100,000 / $750,000 or 13% debt to net worth.

The US total net worth is $150T. The net US Debt is $25T.  So, that’s $25T/$150T or 17% debt to net worth. 

Does this sound like an emergency so dire as to risk the full faith and credit of the United States of America?

SPOILER
ALERT

This week’s political flap started with our Monday Puzzle Drop article.

You can role-play this week’s puzzle at PolicyKeys.com.

POLI THE AI

POLI looks at over 16 million variables for a general bias for change or status quo per puzzle, using loose ties to beliefs, attitudes, values, and ethics.

With regard to the 14th Amendment, some of the 128 roles were tied between leaning towards change or status quo.

The PolicyKeys editors are here to break the tie in the Sudden Depth first half.

Then we Call a Fowl (foul) on the roles where the editors disagreed with POLI for a specific reason in the second half.

We affectionately call the roles in these two halves the Noisy Guests.

Two Types
of Noise

Two types of noise make public policy difficult to understand.

First, the literal is the constant chatter from hyperpartisan parrots – those who dominate conversations to promote their interests, often with hypocritical irrationality, muddying public discourse.

We call this the First Law of Public Policy Formation: People with short-term focus naturally protect their wages, jobs, status, profits, and wealth.

The next kind of noise, the figurative, is the overwhelming influx of information, so much so that we can’t think clearly.

Identifying and ranking solutions for or against policies on a nonpartisan scale is our primary mission.

Tiebreaker

Debt Ceiling
Sudden Depth
First Half

Should we invoke the 14th Amendment to avoid a US Debt Default?

NO

Border & Order Republicans (R) (8)

These Republicans want to blame the Democrats for all that’s wrong with the Federal Budget. However, they might recognize that a stable economy aids national security, like securing our borders, giving them pause.

Taker States (28)

Taker states are uneasy that invoking the 14th would undermine the remnants of trust in the Federal government. However, it’s ironic, as national fiscal policy directly benefits them and could sway them.

Billionaires (22)

Downturns in an economy are a buying opportunity for them. Yet, the prospect of a stable market to further grow their assets without diversion might tempt them.

Energy States (24)

Energy states are dubious, concerned that sidestepping Congress via the 14th could lead to unfavorable environmental regulations. However, they might acknowledge that stability in the dollar as a world currency is in their best interests.

YES

Insurances (23)

The 14th Amendment’s potential for economic stability reassures insurance companies, as it ensures consistent revenue streams. However, they’re also cautious that invoking the 14th could lead to broad government oversight, putting a damper on their underwriting freedom.

Sudden Depth
Score

YES 1 v NO 4
For a net 3 NO

Calling Fouls:
Debt Ceiling
Second Half

NO

Free Press (#20)
Media is born to cover controversy, and the Debt Ceiling has a dramatic positive effect on their profitability, although they acknowledge the potential for a financial meltdown.

Liberty Republicans (#18)
The 14th potentially circumventing Congress deeply troubles Liberty Republicans, albeit recognizing that fiscal stability might preserve other freedoms.

Importers (#16)
Importers are fearful of a weaker dollar that the 14th could create, but dodging a world economic contagion might sway them.

INVESTMENT BANKS (#22)
Investment bankers are skittish at the thought that the 14th could open the door to broader financial regulation, yet concede that market stability is in their interest.

Moralist Republicans (#14)
The Moralist Republicans are fortified by a belief that honoring the national debt through the 14th Amendment is a moral obligation. However, they remain uneasy about a potential expansion of executive power.

Governors (#28)
Governors feel relieved by the prospect of economic stability that invoking the 14th could bring, yet they express reservations about the possible reduction in state autonomy.

YES

C-Suite (#25)
Corporate executives are alarmed that the 14th could introduce an era of tighter regulation but understand that a stable economy would help maintain corporate bottom lines. 

Realty (#25)
Realty professionals are uneasy about the 14th impacting property values through economic ripple effects, yet they also see the merit in averting a housing market crash.

Party Favor Republicans (#29)
Republican Party Favor recipients are thrilled about protecting the largesse of the federal government, but they are also aware that their stance could alienate the leadership.

Founders (#25)
Business Founders are pleased by the original intent of the 14th to ensure fiscal responsibility but worry it may be misused for current political gamesmanship.

TIEBREAKER
BOTTOM LINE

Tiebreaker Recap

First half TIES

YES 1 v NO 4
NO is up +3

Second half FOULS

YES 6 v NO 4
NO is up by +2

Final Score

NO won the
tiebreaker round
picking up a
net 5 out of 128 roles
but the final score is
— YES 108 to NO 20 —

The ± 4% error margin is determined by 256 deadlocked ‘supreme courts’ with each role being the chief justice in both an assumed 5-4 and 4-5 court. Each court is determined by close ties to other “like” roles.

By The
Numbers

The 14th Amendment to
Protect the Full Faith and Credit of the USA
Nonpartisan Score
Near Consensus
— Support

POLI found NEAR CONSENSUS support. Our editors agreed. We predict an 84% ±2 (6 roles) NEAR CONSENSUS of roles in this country to support the 14TH AMENDMENT TO PROTECT THE FULL FAITH AND CREDIT OF THE USA, including a majority of each of the four sides of the political tablemaking this a US Public Policy Leaderboard (US-PPL) worthy idea. 

90% and up Near Unanimous
80% – 89% NEAR CONSENSUS
75% -79% Vast Supermajority
67% – 74% Strong Supermajority
60% – 66% Supermajority
50% – 59% Majority

By
Contrast

SCOTUS’s approval rating is 41%,
the media is 32%, and
Congress is 15%.

Do we expect you to agree with the supermajority on all the rankings? Of course not; you’re human, not a political parrot.

We think you’ll agree with the leaderboard about 3 out of 4 items on average. Why?

The average score of the policies on the PolicyKeys™ US Public Policy Leaderboard (US-PPL) Sweet Sixteen is 76%, with many above 80%Politics 4.0 is already a 2x to 5x better model of US political sentiment and direction than politics as usual.

Fly
Higher

Total US Debt
FRED

Who does the US Owe?
Marketplace

Government Shutdowns Explained
The Balance

Feeling Beings That Think
Institute for Public Relations

Average Net Worth
US News & World Report

US Median Household Income
St Louis Fed

Average Household Debt
Motley Fool

US Total Net Worth
Reuters

The Rise and Fall of American Growth
Princeton University Press

The Clinton Surplus
FactCheck.org

U6 Unemployment over 15% in 2008
St Louis Fed

The 2030s Great Depression
ITR Economics

Why America Will Remain the World’s Only Superpower
American Enterprise Institute

How much would a debt default damage the US?
Christian Science Monitor

Shrinking American Middle Class
Pew Research

Methodology

It takes guts to see things from all four sides of the political table.
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