NEW YORK ( TheStreet) --Amid the discussion about who will replace Tim Geithner as President Obama's Treasury Secretary, one of the qualities that hasn't been discussed but could prove essential is experience with bankruptcy. Is the U.S. really headed for bankruptcy? It seems far-fetched, but the country has seen its costs exceed its revenues by more than $1 trillion annually for four straight years, and Democrats and Republicans in Congress appear so deeply divided about whether and where to raise taxes and when and where to cut expenditures, it is unclear how the issue can be resolved. "I think this is a very dangerous situation largely because there is a general presumption that somehow we can resolve this issue without physical pain or spiritual pain or any sort of economic pain whatsoever," former Federal Reserve Chairman Alan Greenspan told Bloomberg Television Wednesday. "We have to recognize that no matter how we resolve it there are negative consequences." Sounds like a job for a bankruptcy expert, according to Jay Westbrook, a University of Texas law school professor who happens to be one himself. "A bankruptcy expert who had the requisite other experience could be very well equipped," to tackle the U.S. deficit negotiations with Congress, Westbrook says. That's because bankruptcy negotiators know how to "put enough water in each bucket to keep the water flowing," as Westbrook puts it. "They are good at responding to a situation where we have a lack of sufficient resources to do everything we want to do." Westbrook himself would like to see "crusty Midwestern banker" as Treasury Secretary. "Or the head of a large and successful regional bank, like Frost Bank in Texas," he says. Such a person understands finance and high finance, without carrying the taint of Wall Street, Westbrook reasons, adding "he could keep a bankruptcy expert in the office next door." What does Westbrook think needs to be done? While he isn't sure the series of devastating cuts agreed to by both parties and known as the "fiscal cliff" is the solution, he does believe some similar type of mechanism may be needed in order to "lash us to the mast," since both major parties don't seem to be able to reach an agreement by any other means.
Aside from that, he believes the outlines of a solution are pretty straightforward. "The basics of the deficit problem don't really seem to be very complicated and are widely understood by economists of all different political stripes," he says. "You could probably take 100 economists and put them in a room where half would be Democrats and half Republicans and 87 would give you the same answer," he says. That would involve raising revenues and cutting expenses, almost certainly to "untouchable" programs such as Social Security and Medicare. If we do it too quickly, however, we would kill off growth and find ourselves in the situation much of Europe is in at the moment, Westbrook says. As for putting a bankruptcy expert in the top job, one is hard-pressed to come up with a suitable candidate. One of the best-known restructuring experts, Wilbur Ross, supported Romney during the last election, assuming he had any interest in the job. A longtime colleague and friend of Westbrook, Elizabeth Warren, might have made many Democrats who feel the party is too much in the thrall of Wall Street very happy. And she just happens to be a bankruptcy expert. The only problem, of course, is she will be otherwise occupied, having just won the junior Senate seat in Massachussetts. Would Westbrook be willing to take the job in the office next door to the Treasury Secretary? He says he's never thought about it and has "the greatest job in the world," but would probably take the assignment if asked. "My good friend Liz also had the greatest job in the world
as Harvard Professor, prior to working on establishing the Consumer Financial Protection Bureau and then running for Senate , and I guess if she could give up her job for a while I could too." -- Written by Dan Freed in New York. Follow @dan_freed