Sunday, October 06, 2013
Dan Fry's "Are of Mutual Agreement" seems needed in Washington's debt ceiling "negotiation"; a lesson from my earlier life
In Chapter 3 of my 1997 “Do Ask, Do Tell” book, I mentioned, in Chapter 3, an idea or political strategy called “The Area of Mutual Agreement”, an almost trademarkable phrase invented by a New Age group, centered in the desert west of Phoenix, AZ, named “Understanding”, or perhaps by its founder Dam Fry (“To Men of Earth”). A few of the Understanding conventions held on the property in the late 1970’s (which I attended) were predicated on this concept.
Given the uncompromising rhetoric on the upcoming debt ceiling crisis on all the major media channels recently by political players in Washington, mostly notably John Boehner and Ted Cruz, a little bit of this process may be in order. It seems that the parties can’t talk to one another without saving political face, but they can follow what Tinseltown calls “The Third Party Rule”. Let an agent in the media convey the messages and perhaps mediate. Maybe ABC’s George Stephanopoulos is in that position.
There is something about the idea that we even have a debt ceiling law that invites instability and distrust. It means that, even if Congress appropriates the money for some particular endeavor that is then built or carried out, it may take separate approval later for the United States to pay the bills if any money needs to be borrowed.
The analogy is like that of a family’s buying a home, vehicles, and perhaps borrowing money to start a business. Bills (principal and interest) come due and there is not enough cash on hand to pay them all without delinquency. The family needs to borrow more. If it can’t find a lender, it goes broke and probably declares bankruptcy. Creditors get stiffed. That can mean personal hardship and doing without for them, even though they did nothing “wrong:. A legal system supporting the right to contract and all the obligations that go with it don’t preclude all adversity for the “innocent”. Real wealth is ultimately what matters.
The difference is, between the U.S. and a “not so modern” family is, of course, that the US can print more money, or even mint it. That leads to inflation. It could mean that the rest of the world stops accepting dollars, even rather suddenly (that’s scenario warned by Porter Stansberry).
That’s why there is, in some sense, a “natural debt ceiling” even if there weren’t one in US law. The debt ceiling law seems to suggest (by legal definition) the possibility (never realized for over 200 years) that the US might not repay all that it borrowed and stiff or really hurt some people (as to quote “The Town”). But even without a debt ceiling the idea is stil there, because the possibility of hyperinflation exists, or the loss or use of the currency, which has happened to countries in the past (Britain experienced something like that with the pound).
Nevertheless, there are calls to abolish the debt ceiling, such as by Jim Moran (D-VA).
This is the third standoff in Congress since 2011 (after the GOP took control of the House in 2010), but this one seems the most dangerous so far. On the Issues on Retirement blogs, I’ve discussed the rhetoric and developments in detail, and there will be more notes coming on the possible personal implications for a lot of people, including me, if the GOP really is able to force us all to go “cold turkey” on any more federal bowrrowing. Some of these ideas are indeed challenging, and troubling, and surprising. I cannot reassure my readers that they are entirely nonsensical.
At the same time, we can’t take our eye off the ball on issues that affect Internet speech, such as the desire of many state attorney’s general to weaken Section 230 (Aug. 9). One of the interesting ironies about the health care debate is that some of it applies to other areas. Mandatory auto liability insurance is not controversial, but what if the idea were applied to self-publication and self-distribution on the Internet? We cannot be sure that some unrelated legislation on matters like this might get ensnared in a budget or debt battle in “superstorm Sandy” fashion.
By the way, I got a voice mail from singer Ronnie Kahn, whom I let in the late 1970's, a couple years ago, mentioning the "Area of Mutual Agreement". People do remember this idea.