The political actors in Washington that are playing chicken with the debt ceiling remind me of a married couple that once had their home financed with me. They got a couple of months past due, and I called them in. He said, “she spends too much money.” She said, “he doesn’t earn enough.”
After listening to them for what seemed like an eternity, I said, “I am sure both of you feel justified in your perspective, but you need to understand where I am on this. If you don’t have this loan caught up by the end of next month, both of you will be sleeping in your car.”
Remember the Simpson Bowles Commission? It was a bi-partisan group co-chaired by former Republican Senator Alan Simpson and former Chief of Staff to President Clinton Erskine Bowles. After months of wrangling, they came up with a plan to bring the Federal deficit under control through a combination of cuts in entitlements and some modest tax increases. Perfect? Absolutely not. General Patton famously said, “A good plan today is better than a perfect plan tomorrow.” I think the Simpson Bowles plan passed the Patton test.
Where did it go? To the trash heap. One side was unwilling to cut entitlements and the other unwilling to consider a tax increase. Sounds a lot like my past due couple, and just as they had a banker holding the mortgage on their house, our country has creditors who have loaned based on its “full faith and credit.” If our political actors can’t figure out a way to avoid a Federal default, an economic crisis will result that could put us all out on the street.
One of my favorite movie scenes is John Wayne’s message to Richard Boone near the end of “Big Jake.” Big John said, “Now you understand. Anything goes wrong, anything at all…your fault, my fault, nobody’s fault… it won’t matter.” The Duke proceeded to explain to Boone that dire consequences would be the result.
I think voters all across the political spectrum should send a “no excuses” message like this to their folks in Washington. If the game of political chicken they are playing winds up with a Federal default, it will be time to send in a whole new team.
Joe Evans of Smarr was Chairman and CEO of State Bank, which merged with Cadence in 2019. Now retired, he was given the Lifetime Achievement Award from American Banker magazine in 2018. He remains on the board of Cadence. Email him at firstname.lastname@example.org.