Archive:Ehtya/Op-Ed on the 2013-II Fiscal Dilemma

**Delivered By:** Ehtya

**Date:** September 23, 2013

 Facing the Triumvirate’s government this trimester are two financial conflicts unlike any ever seen in the history of our Union. The first is an impending funding crisis, where the government will not be able to afford to make full payments to its own institutions, resulting in a government shutdown, unless a solution is found. The second, much more dangerous one, is a debt default, which would have dramatic consequences lasting for potentially years.

 The potential shutdown situation will come first, possibly as soon as October 7, when the appropriations made by the ARMED Act, promising to give the Department of Intelligence 300 tri, won’t be able to be paid. The government possesses only about 250 tri at the moment, meaning it needs to get enough funds to pay 300 tri on October 7 within the next two weeks. That, or it must make an agreement to do something else, perhaps via a continuing resolution, postponing the payments or reducing them until another date. The effects of a government shutdown would be tragic: the Department of Naturalization wouldn’t be able to send checks to incentivize recruitment, certification services would stop, artistic funding would close, almost government workers would be required to stop working, courts would close, and all government spending by any government institution would stop. The biggest spender in the Triumvirate, the government, would stop spending. You don’t have to be an economist to realize the serious consequence of that.

 Even more serious though is the threat of a debt default, which will strike the Union most likely in early January when many of the “A” series bonds will mature and need to be paid back by the Treasury. As I’ve established, the government is already low on money, and after paying the Department of Intelligence, and then having to pay the budget for 2014-I on top of that at the start of 2014, there will be nothing to almost nothing left to pay for the bonds that are due. If the government cannot pay back even one bond, a default occurs, and all those who bought bonds, giving their hard-earned money to the government in faith that they’d get that, plus interest, in six months will be left without money. The private sector would lose all faith it had in the government, as would our allies who have purchased government bonds, and private individuals, and the 1000 tri given to the government, for a return of 1054 tri, would fail to make its way back to those who loaned it out in the first place. All the bonds I bought, worthless. All the bonds held by public employees, worthless. All the bonds purchased by our ally, worthless. The government would be viewed as a deadbeat entity, who fails to pay as promised. In order to ever raise money via bonds in the future, the government would have to raise interest rates significantly, perhaps to 10%, 20%, or even 30% so that the benefits would outweigh the risk. This would put the government further into debt of course, and it would take years to restore the private sector’s faith in the government for those interest rates to ever get back down to a healthy level.

 I've described two worst-case scenarios here, about what happens if, first, the government shuts down and can’t afford to keep itself running; and then second, what happens if it can’t afford to pay its debts off. So what is the solution? We’re a Union of wit, fortitude, and cunning, there has to be a way out of this. Everybody take a breath, there is a way out of this.

First, deal with the most impending crisis, the potential shutdown. For this, the burden must fall on the conservatives in the Triumvirate. Why? Because a government shutdown will be pinned on them if it happens. It will be pinned on them because they have traditionally opposed any sufficient way for the government to raise money, via bonds or via taxes. Despite numerous attempts by the liberal side of the aisle to seek compromise on reasonable taxes or debt, the conservatives have consistently refused to negotiate, and therefore, the burden of finding a solution to the shutdown must fall on them.

Once resolved, a solution must be found to prevent the Triumvirate from defaulting on debt. For this, the burden falls to Major Executive Maine and Head of the Treasury Bleitze, the two liberal masterminds behind the legislation that is to blame: the 2013-II Economic Stimulus and Infrastructure Investment Act. Do not mistake me, I still, to this day, support the stimulus, I believe it did and will continue to do a lot of good, especially with regards to recruitment and aiding businesses. While a supporter, I must concede that the stimulus did release a lot of money, and money doesn’t just come from thin air. Someone has to pay. That, combined with Head of the Treasury Bleitze’s Fall Activity Return, something I and the Major Executive were both against for this exact reason, mean the government is out of money to keep funding itself and to pay off its first set of bonds. Here the conservatives hold the upper hand, as in the case of default, blame will fall on the Major Executive and the Head of the Treasury. What can be done about the default though? More bonds could be issued, lending to the Hamiltonian concept of permanent public debt, perpetual bonds after bonds to keep the government funded while paying back mature bonds. Government spending could be cut, reducing the amount in each trimester budget. Or, withdrawals could be made from current government institutions (though, it’s worth noting that any hint of this and those institutions will find some way to hold onto their money or spend it before something happens to it). I recommend a combination of all three.

The issues of a shutdown and a default, while different, are still very connected. They are connected because the Triumvirate government is dangerously close to running out of money without a stable plan in place to get more funds. There is a way to reach compromise on each, and there’s a way to keep everything running smoothly for this trimester, for 2014, and for the years to come.

 What is my credibility in making these claims? First and solely, I am a Triumvirate citizen and business owner. My company, General Media, was the first company established in the Triumvirate, the first company to go public, and is the largest company in the Triumvirate. Furthermore, my family holds incredible assets in bonds, shares, and currency via a trust account, which is now, thankfully, taxed by the government. Any other record of mine is irrelevant. What matters is that I am a concerned member of this Union, a creditor of Triumvirate debt, and someone who has devoted over four years to the Triumvirate and its continued prosperity.

 I implore Major Executive Maine, Head of the Treasury Bleitze, and Speaker of the Administration Mearl to all find an appropriate and much-needed solution to these two serious fiscal problems. The price to pay for failing to put aside your differences and find a solution far outweighs the price you’ll pay for working together.

-Ehtya, CEO of General Media