Oct 15, 2013
Straight Talk: Debts and Defaults
Democrats and Republicans — as well as our in-the-tank media — all say that if Congress doesn’t raise the debt ceiling in the next 48 hours, the government will not be able to pay what it owes on the national debt, causing a credit default that will threaten America and the world’s economy. Don’t believe...
Democrats and Republicans — as well as our in-the-tank media — all say that if Congress doesn’t raise the debt ceiling in the next 48 hours, the government will not be able to pay what it owes on the national debt, causing a credit default that will threaten America and the world’s economy.
Don’t believe it!
“As much as the politicians and news media have tried to convince you that the world will end without a debt ceiling increase, it is simply not true.”
“The federal debt ceiling sets a legal limit for how much money the federal government can borrow. In other words, it places an upper limit on the national debt. It is like the credit limit on the government’s gold card.” (more at Forbes.com)
Tax money keeps rolling into the Treasury during the shutdown, and it vastly exceeds the interest that has to be paid on the national debt.
Speaking dollars and cents, here are official numbers from the Treasury Department and the Office of Management and Budget:
Annual debt service
on $17.6 trillion
national debt = $415 billion / year
for this fiscal year
(started October 1) = $3.037 trillion
The math is elementary — debt payments require only one dollar out of seven.
That leaves six dollars out of seven (or $2.619 trillion) — more than enough to pay our military, pay all Social Security benefits, and a lot more, even if the debt ceiling isn’t raised.
No New Debt:
Secondly, even if House Republicans hold the line (miraculously, we might add) the debt ceiling is not lifted, that only means that government is not allowed to run up new debt.
That does not mean that we cannot pay the interest on our existing debt. It means that Democrats and Republicans would not get the new spending both parties still want.
Even now, Senate Democrats want to throw out the sequester cuts, which have resulted in the first two years since the mid 1950s when we’ve had less spending than the year before.
And the Republicans are again willing to kick that can till December — without ensuring that cost-cutting measures are taken, somehow, to help keep our spending in control.
Another small point: When Obama rails against House Republicans who dare try to “exert their will” on the country’s spending problem, keep this firmly in mind: Our Constitution gives only Congress — not the President — the power to spend money.
What Obama doesn’t want to admit and the media doesn’t report is that the President can choose to tell the markets and the world, “The U.S. will ensure its debt service is paid, no matter what.” By law, the President has that authority.
Don’t believe the lies from the career politicians. Borrowing money / raising the debt ceiling is only necessary if you intend to keep our government big and growing.
We’re gratified that Senators Ted Cruz, Mike Lee, and others understand the Constitution. They may be the only ones in D.C. who do.
Read more at Forbes.com and
“Why Refusing to Raise the Debt Ceiling Will Not Result in a Default on American Debt” on FreeRepublic.com