Senator Rand Paul wants crony banksters and anyone else who supports the state by buying US government securities to be first in line for your tax dollars.
This afternoon, Sen. Paul introduced the Default Prevention Act, which would require the President to prioritize federal revenue to interest on the national debt.
“Some of my Republican colleagues in the House have decided to surrender to the Democrats’ annual plan to increase the debt ceiling. I believe we should stand and fight for a Balanced Budget Amendment to the Constitution before we raise the debt ceiling. My legislation takes the possibility of default off the table so we can continue to push for fiscal restraint. There is no reason the government would – or should – responsibly consider the idea of default,” Sen. Paul said.
UPDATE
To elaborate on what is going on here. Rand is, in a fashion similar to his TSA proposal, which I discussed with Doug Wead on the Robert Wenzel Show, attempting to micro-manage government in ways that will help expand the government instead of shrink it. The best thing that could happen is for investors to get nervous about holding government paper, which would make it much more difficult for the government to finance expansion. Rand, however, comes up with a proposal that will protect debt holders and eliminate their fears of holding US government debt. Thus, preventing market imposed discipline on the US government.
Source: Economic Policy Journal.
No comments