The new Y2K problem?

by on July 7, 2011 at 2:36 pm in Political Science | Permalink

Felix Salmon writes:

…it’s far from clear that it’s even possible to stop making the 3 million payments that Treasury makes automatically every day. Doing so involves a massive computer-reprogramming effort which I’m sure could not be implemented overnight — and for political reasons nobody is going to get started on such an effort until after all hope is lost for a deal in Congress.

Now that’s what I call government precommitment.  The post is interesting throughout.

1 mdb July 7, 2011 at 2:41 pm

It’s just a database, somewhere there is a field to stop payment. A blanket update query could stop a very large chunk, I would be willing to bet. If they need help, I am good with SQL.

2 Dan Weber July 7, 2011 at 5:20 pm

Dear Timothy Geithner,

I am pleased that’; DROP TABLE accounts; —

3 joshua the postlibertarian July 7, 2011 at 6:26 pm

This presumes that government systems are modern enough to use SQL…

4 Noah Yetter July 7, 2011 at 7:14 pm

You vastly overestimate the quality of government information technology.

5 Noah Yetter July 7, 2011 at 7:15 pm

Somehow mis-replied, should be attached to parent post…

6 Jeff July 8, 2011 at 10:13 am

I actually work with Treasury disbursements (and financial systems generally) and you will be pleased to know that run on some fairly big Oracle platforms. Government IT has its problems but being able to use big databases is not one of them.

7 Sigivald July 8, 2011 at 4:44 pm

It’s been over 30 years since SQL was really commercially available and well-supported, and many of the systems themselves (i.e. some entire programs) are newer than that.

So it’s a pretty good presumption.

(Besides, people can both argue that it’ll save the State money, and make themselves piles of it with contracts to modernize – the incentives are aligned, so it’s no surprise that it’s happened.)

But they could equally stop payments if they “had to” (and actually wanted to) by simply stopping the printing and mailing of checks, and disconnecting from the direct payment systems.

It’s no like the only solution point is in the originating system’s software… there are layers and layers here, and each of them is susceptible; in the extremity (though one would not wish to because of other costs it’d create later), one could even simply turn it off.

8 Jim July 7, 2011 at 2:48 pm

But of course, the Treasury payments are the one thing that are guaranteed NOT to stop, so telling us they are hard to stop is not an issue.

How about the other several trillion dollars per year that the Feds are spending? Should we just keep pretending those don’t exist?

9 Matt Waters July 7, 2011 at 3:35 pm

The other trillions of dollars include things like Social Security checks, Medicare reimbursements, soldier paychecks, tax refund checks, etc. If the Federal Government does not stop treasury payments and does not raise debt above the debt ceiling, then the government would have to default on those other obligations for the math to work.

I’m still not sure why this is such a great thing that the President is forced to break some law because Congress has passed inherently contradictory laws. If these other obligations were so awful, then they should have been dismantled in the budget process. As David Brooks says, there is no moral decency in not caring if the US government breaks its promises to either debtholders or other obligations. It is fundamentally dishonest and indecent to tell the president to spend a certain amount of money and then not approving the debt needed to spend that money.

10 Ron Potato July 7, 2011 at 5:20 pm

So Congress can tell the President to stop spending certain money, without raising the debt ceiling.

11 MyName July 8, 2011 at 1:23 pm

Yeah, but they’re not doing that either. Divided government FTL.

12 8 July 7, 2011 at 3:03 pm

Anonymous can provide voluntary support.

13 Mogden July 7, 2011 at 3:17 pm

Just burn the checks when they come out of the printing press. Let me know if you need my help with any other “problems” of this nature.

14 charlie July 7, 2011 at 3:54 pm

Clearly for federal workers, there is a system in place to stop pay.

Interesting, the feds still got their free metro rides in DC, though.

15 Bill July 7, 2011 at 5:30 pm

What supports your claim that federal workers ride free.

Nothing.

16 Cliff July 7, 2011 at 10:27 pm

They do generally get free metro cards

17 Bill July 8, 2011 at 9:16 am

That is not true.

18 j r July 8, 2011 at 10:07 am

Federal workers get a transit subsidy (i.e. a pre-tax benefit in lieu of cash), the same way that many private companies offer TransitChecks, or discounted gym memberships, or a subsidized cafateria or whatever. In other words, it’s an in kind benefit. Oh, the horror!

You do know that this is an economics blog, right?

19 Edward Pierce July 7, 2011 at 4:06 pm

#/sbin/shutdown -i0 -g0 -y.

20 Dan Dostal July 8, 2011 at 2:21 pm

Yes, there are simple methods to stop the computers. But what about the other operations running on that hardware?

21 doctorpat July 11, 2011 at 11:33 pm

We are prepared to make that sacrifice.

22 korbonits July 7, 2011 at 4:31 pm

0.0000 % 4-week Treasuries, due two days after the debt limit is to be reached!

http://www.treasurydirect.gov/instit/annceresult/press/preanre/2011/R_20110706_1.pdf

23 Brock July 7, 2011 at 4:52 pm

The debt limit doesn’t prevent payment on existing debt – it forbids the issuance of new debt that raises the current total of oustanding debt. Nothing can prevent the payments on existing debt (short of the Constitution being torn up and throw in the trash).

When the debt limit is reached, it’s deficit spending that comes to a halt, not debt payments. Debt payments will continue to be made out of incoming tax revenue; and rolloevers will be unaffected too.

24 Andrew' July 7, 2011 at 5:02 pm

Luckily interest doesn’t absorb the entire budget.

25 Andrew' July 7, 2011 at 5:08 pm

We are approaching a debt ceiling. We have a debt ceiling. Not rolling over our debt brings us to a Lehman moment. We can’t even stop payments if we had/wanted to. It’s just funny where people come down on what they think is problem.

26 Bill July 7, 2011 at 5:36 pm

Here’s a prediction: SS will be cut, Medicare will be cut, and there will be corporate tax cuts with the savings, which they will claim will pay for themselves.

Just remember, by 2018 a quarter of the total debt will have been from the Bush tax cuts if there is no change per Simon Johnson at MIT.

27 FYI July 7, 2011 at 11:14 pm

As of now these are not ‘Bush tax cuts’. Obama took ownership when he decided to extend them. Actually, he took ownership the day after he became the president since he had total control over congress and could do whatever he wanted. It is on his tab for 2009 forward.

28 MyName July 8, 2011 at 1:26 pm

Right, and he campaigned on implementing a new set of tax cuts, oh wait nm that was Bush II after all.

We can stop calling them the “Bush Tax Cuts” when people stop using “Obamacare” as a word.

29 Careless July 9, 2011 at 2:05 pm

They’re not the “Bush Tax Cuts” anymore because they were passed by Obama and a Democratic Congress. “Obamacare” has not been extended by a group of Republicans.

30 mulp July 9, 2011 at 3:21 am

Which clause of Article two of the US Constitution gives the President “total control over Congress”?

And in the Senate, 41 Republicans took office Jan 2009 and only 56 Democrats, and for all laws passed from Jan 2009 to the summer recess in Jun 2009, more than one Republicans was required to pass every law because McConnell stated up front he was going to make Obama fail, and he threatened Senate Republicans to get them to comply.

And on taxes, the distortion on tax policy has convinced everyone tax cuts create jobs, so while lots of people claim Obama’s stimulus failed, no one points to the 6-8 tax cut stimulus bills and calls them failures even though the Bush tax cuts created fewer jobs over a decade than were created during the first decade of the Great Depression.

31 quadrupole July 7, 2011 at 11:22 pm

Why would SS and Medicare be cut? There’s enough money for interest, SS, Medicare, Defense, and around 82 billion left over. Who’s going to be dumb enough to put themselves in the position of say ‘yeah, we didn’t send grandma a check, but we did ‘?

32 MyName July 8, 2011 at 1:29 pm

Umm people who want their workers to show up and work, or who want the utilities to stay on? The point of the article is the automated system isn’t designed to be easy to fiddle with, obviously if you’re not gonna pay people in treasury who know how to do so, then you’ve got yet another interesting problem.

33 joshua the postlibertarian July 7, 2011 at 6:25 pm

So if they pay back Treasuries with money they have and then send out the automatic payments with money they “don’t have” since they can’t stop it anyway, then they can essentially just “print” money to cover those payments (it’s all digital numbers anyway, right?) Problem solved!

34 Tom Powers July 7, 2011 at 6:26 pm

No way to stop the payments overnight? How about unplugging the computer?

35 Factory July 7, 2011 at 6:55 pm

Computer programs can be quite obscure in the features they support, but a decently written program if disconnected when it has to send messages will just wait until it gets reconnected then send out all those messages.
So you would just be pausing the payments, not stopping them.

Anyways, doesn’t really matter, whoever runs the system will be able to do a quick hack to stop the payments, erm, if they can afford to pay the contractor to do so.

36 blah July 7, 2011 at 11:16 pm

HAL, stop printing the checks.

I’m afraid I can’t do that, John Boenher.

37 EmmaZahn July 8, 2011 at 1:22 am

I am guessing not many reporters have worked accounts payable. It would not be that hard. Somewhere someone authorizes every batch of payments. In the case of Treasury likely many someones but not really that many.

38 Eric H July 8, 2011 at 9:02 am

How much longer until SpendNet becomes self-aware?

39 doctorpat July 11, 2011 at 11:39 pm

It happened sometime in the mid 1990s. Now it is too late.

40 JCL July 8, 2011 at 2:28 pm

All you have to do is unplug the computers…. It even worked for the self-aware computer in 2001: A Space Odyssey

41 Jimmy Jeff allen July 9, 2011 at 3:55 pm

Here’s an Idea… walk around back and unplug it!

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