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October 10, 2013 at 11:25 AM
Great big giant money managers are selling their holdings of short-term U.S. government debt because they’re afraid of what might happen if Congress fails to raise the federal debt limit.
Of course, it could well be that federal agencies will somehow find money stashed under a federal mattress, or the NSA will siphon some money out of some drug cartel’s accounts and launder it through, say, some mysterious Federal Reserve Bank maneuver that everyone pretends to understand.
But, basically, what we have here is a lousy political economic marriage.
The staunch Democrats believe one thing, the staunch Republicans believe another thing, plenty of independents believe in their own personally-tailored collection of positions, and everyone hates everyone else.
Who knows what kind of damage continuation of the government shutdown, and a failure to raise the debt limit, could or could not do, but the situation is like a bitter fight between two crazy meth head parents who live on the 100th floor of a skyscraper. They try to get each other to pay the electric bill or turn down the radio by swinging the babies over the balcony.
And insurance companies’ disability insurance operations are some of the babies.
Even though disability insurer portfolio managers may prefer higher-yielding mortgages and corporate debt securities, they use plenty of government debt securities. They also depend heavily on the overall stability of the job market and the economy as a whole. Employers in seriously chaotic countries are not that big into offering disability insurance, or into offering employee benefits of any kind.
A modest proposal: Instead of continuing with the current gridlock, or descending into a foolish, 19th century-style shooting war, as we seem hellbent on doing, why not use modern technology to have the population go through a trial separation?
