Government accountability with political futures

Senator, you have a margin call.

As we approach two potential national crises — a government shut-down and a default on federal debt — fertile minds will shift toward whether there is a financial tool to alleviate those risks. Futures contracts and options have long served as mitigators of risk. Why not here?

Setting aside that the Commodity Futures Trading Commission has its skeptics about the efficacy of permitting any hedging tool when the vagaries of "events" are involved, I have an idea.

Suppose that we let the American public go "short" (agree to sell) a contract that reflects the impact of a government closure or a debt default. It will generate profit if those debacles happen. Then, suppose that we create a new entity comprised pro rata of members of the Congress and the White House that will be assigned the opposite "long" position that must pay the shorts if calamity strikes. And from their own pockets.

Most politicians think that their only personal risk from advocating a position is that voters will turn them out and they will have to resume their dentistry practice (or join a lobbying firm). These new futures contracts would threaten their economic security in a serious way. I think, in the real world outside the Beltway, it is called "accountability."

Our politicians have a habit of deciding what is "good" for you and me, and then exempting themselves. But they could not escape the margin calls, the deficit notices, the collection actions, or the bankruptcies resulting from the damage done by their actions. They would have to meet their futures market obligations.

This approach bypasses all First Amendment concerns. It does not matter what are the political convictions of the debtor. You pay or you are a deadbeat. Sweet.

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