Debt Ceiling Russian Roulette
Sometime in the next few weeks we are going to find out whether the Republicans who assumed control in the House and increased their influence in the Senate are responsible, sober-minded stewards of the Republic or escapees from a loony bin. A vote to raise the debt ceiling is in the offing and there appears to be a sizable segment of the GOP — especially the newly minted Tea Party members — who wish to run screaming toward a gasoline dump with a lit stick of dynamite clenched in their teeth.
Their plan is to literally blow the world up and watch it burn by refusing to vote to raise the debt ceiling.
I will say at the top that there is a monumental difference between using the debt limit vote to wring concessions from Obama and the Democrats on spending, and the monstrously idiotic idea of opposing the increase in the first place. The Democrats will scream about holding the government “hostage” but it is nothing of the sort — just good, old-fashioned hardball politics, played to the hilt for the highest stakes imaginable: the solvency and surety of the U.S. economy.
For four years the Democrats had the majority, with historic margins of control for the last two. They have failed miserably to manage the people’s purse. No one is arguing that the Republicans are blameless in creating the mess we’re in. But the Democrats were given a chance to address the problem and, after four years of record spending, were found utterly lacking. In fact, they didn’t even try.
Incredibly, rather than addressing our fiscal woes, they acted in a manner that suggested a sneering condescension toward taxpayers and a flippant disregard for prudent, practical, responsible governance. Wild, out-of-control schemes to “remake America” with the passage of “historic” legislation, while grasping with both hands for control of private companies and the intimacies of citizens’ lives, have left the United States in a perilous plight: the real prospect of insolvency and default.
The Democrats do not want to make the cuts necessary to save us from our own profligacy. The pitiful sums the Republicans are talking about cutting from the FY 2011 budget — $50 billion or so as of this writing — are more symbolic than real. With the deficit expected to top $1.3 trillion, $50 billion is about on par with spitting into a four-alarm fire. And yet, we have a promise from Harry Reid that the Senate won’t consider such draconian cuts, and President Obama will never sign any such legislation.
What then, should be done? The only viable weapon at the Republicans’ command is their ability to threaten Armageddon by holding up the vote on raising the debt ceiling until the Democrats join them in addressing the root of the problem: unsustainable entitlement spending. Cutting non-defense discretionary spending — about 18% of the $3.7 trillion budget — won’t even come close to addressing the crisis. Only with the Sword of Damocles hanging over their heads represented by a failure to raise the debt ceiling will both parties be forced to come to grips with our fiscal nightmare.
Threatening catastrophe and deliberately acting so that it occurs are two entirely different animals. The difference may be subtle, but forcing the issue of cutting spending by leaving open the possibility that a vote to raise the debt ceiling will fail is a far cry from embracing the horror in its totality and deliberately voting to destroy the economy.
By promoting endless debt, the Democrats have thrown the economy off the Empire State Building. The choice is to quickly dig into the bedrock of Manhattan so the economy can fall further or let it hit the ground at street level. In other words, there is no way for the economy to survive no matter at which point it is allowed to burst.
Reasonableness is what has gotten us into this mess. Treating the incivil Left civilly is how they win.
Furthermore, if you are not willing to follow through on your willingness to crash the economy, then they will not take you seriously. It is high-stakes chicken, to be sure, but the other guy has to be convinced you will crash before he will swerve. That means enough of us rightwing nutjobs have to be extremely vocal and credible. Good for DeMint for being the voice of unreasonableness.
The Leftists will pillory us for this. “Oh, those nutjob extremists!” The more they do, the more credible we’ll be. When the other side swerves, we will gain the glory. Because we’re nuts! Embrace it; do not run from it!
“Threatening catastrophe and deliberately acting so that it occurs are two entirely different animals.”
No, they are not. A threat is no good if your opposition knows you will not carry through on your threat. All the Democrats have to do is wait and when the Republicans raise the debt limit, continue to spend more money. If they know Obama will veto anything the Republicans put in front of him and that the Republicans don’t have enough votes to override the veto, what is their incentive to do ANYTHING for the Republicans? Nope, only the threat of the end of the world will get Obama and the Democrats to do anything. The only difference is that the Relpublcians have to MEAN what they say. And, in Washington, “compromise” for the Republicans usually means doing what the Democrats want to do only for a little less money. The Republicans need to remember every day of the week why they were sent to Washington and given this last chance to prove that they are true conservatives. Close the government down if that is what it takes to make Obama and Reid see the light. This time, the American public is with the Republicans and the Democrats should know it.
Agreed – go all in – Don’t bluff – - MEAN IT!
If the Dems think they are calling a bluff, start pulling the trigger. Start firing civilian federal employees – lots of them. Blow the “brains” out of Commerce, Labor, EPA, etc… Pay as you go and never hire them back. Us working citizens outside the beltway will never notice the drop in “service.”
This twisted death spiral must end now. If Washington DC keeps spending like this, the result is the same as not raising the ceiling…collapse. With social spending on autopilot, eventual collapse is predicted. The author, in a chicken-little mode, wants to postpone the inevitable at someone else’s expense, and I think that’s wrong. Limited government is the answer to this madness, not more borrowing and spending. Our national banking system was never meant to have this kind of sway over our lives and livelyhoods, let alone world financial markets.
DeMint and the newbies are thinking correctly. Shock to the core, and the constraint that we all voted for will occur. It must occur.
I am pretty sure that in the end having the Federal Reserve just print even more worthless fiat currency, which is what raising the debt limit would do, has the same effect as defaulting – but is maybe a bit more honest. If debasing the currency is e honorable and right thing to do per Mr. Moran I differ. Also, who believes the government could not come up with one trillion in immediate savings if it were really serious. I believe there is about $300 b in unspent stimulus or TARP funds. If we acted reasonably based on the crisis we are really in we could make serious cuts immediately that would end the need for a debt ceiling increase. I just read there are 3500 employees in the TSA “headquarters” who oversee the gropers. Think about the amazing stupidity of that. We have 3500 federal workers overseeing the completely mindless drudgery done by the million or so completely robotic and mindless TSA people in the airports.
I am really getting sick of the people who say we must continue doing the mindless stupid stuff that got us here because the world will end. That exact same argument was used by people like Mr. Moran to tell us cavemen conservatives that the TARP had to be passed immediately with no debate or the world would end. It was passed and instead we began the end of our economy and Consitutional Government.
I hope they load all six and pull the trigger!!!! How insane is it to create more debt to pay the bebt? We as everyday Americans don’t get to do it and it is time for our reps to stop doing it. No, it won’t be easy but it must be done. Budget 101: stop creating bills and start paying the ones you have!!!
I believe that failing to raise the debt ceiling would play into Obama’s game plan. How great would it be to destroy this economy (or what’s left of it) and be able to blame the Republicans? Once the US is brought to its knees, (and then the world), the doors will open for our new President of the world to save us from the mess he helped create.
He can’t save the world unless the US is no longer a player.
Best comment so far.
Let it crash. If the government sees that it’s about to run out of money to pay interest on debt, it will have to slash current expenditures (eg, salaries and benefits for many of the unnecessary federal employees) to meet it’s obligations. I’m so sick of seeing phrases like “economic collapse” if we Congress doesn’t vote this way or the other. Since I was a kid in high school back in the early ’80′s I’ve been hearing about how Social Security in on the brink of insolvency. Always “doomsday” language. Have some balls, limit the cieling now, and force the feds to start acting responsibly.
If only “crashing” would play out the way you say it would. In reality, that’s not the way the law is structured. If we cannot borrow, all accounts, including the account used to pay our debts, get filled 50%+/- with the money that actually comes in. Everybody gets paid half including our bondholders. That’s an immediate default and something that will take generations to fix once it happens.
The Tea Party people need to introduce legislation so that we pay our debts in full in case we don’t raise the debt ceiling and then use what money is left to fund the rest of the government. This would still be rough, 65% cuts across the board instead of 50% ones, but the damage would all be internal to the operations of the government and would cease when the debt limit impasse would be resolved.
Thaasiitt!
We Rebubbicans have to raise the cash to cover what the Dhimmocrats have ALREADY SPENT!
Otherwise we’re meanies and will SET THE WHOLE ENTIRE WORLD on fire. Or something.
Pardon me, but haven’t we already seen this picture many times before?
Mr. Bernanke said at the beginning of QE2 that deficit spending had to end or the U.S. economy would crash. Yet this article claims those who want to end deficit spending are ‘nuts’? The President is growing the government via his anti-business agencies; the Senate belongs to Harry Reid who led the effort to reach record deficits on top of already-record deficits; only the House has any chance of making a difference in the 10-year-long march to insolvency. The only weapon the House has is the debt limit. If you want to call wielding it a crazy notion, how would the author guarantee fiscal responsibility? Are we all Californians now?
Better partial catastrophe now, bad as it will be, to a full fledged catastrophe in 2 or 4 years. Don’t raise the debt cieling and watch the speed with which even statists find ways not to spend after the first dominos begin to fall.
The old MAD was Mutually Assured Destruction. That loser game is now played as economic chicken. The Russian roulette analogy is a test of bravado with someone else’s well being. Another workable analogy is that the congressional spend-aholics are trying to work out their therapies by threatening to buy more if they promise to use less. This again is madness.
One does not trust junkies to admister their own therpy, unless they make concerted effort with proof that they will spend less. If the spending/entitlement slant was to be more European-socialist, then the cure is going to have to be the predictable “Austerity.” SANEE would become Serical Austerity National Entitlement Economics.
The author says to be reasonable, but what is his definition. How much more spending do we allow before we either pull the plug or fall into a financial abyss from which recovery is not possible. Yes, it will be difficult, but if we do not stop the spending juggernaut now…….when. The easy answer is to continue spending……..the hard one is to restrain the spending because remember, it is spending that get politicians re-elected and supposedly loved by the electorate.
I agree with Jim DeMint. I don’t want the government or economy to crash but, unfortunately, I believe it is inevitable. Our national debt is over $14 Trillion. Why raise the debt ceiling so more money will be spent and the national debt will increase? We will never pay the $14+ Trillion back anyway. We need to deal with the crisis now or we will allow the crisis to grown even bigger and then there will be more suffering.
The problem is that getting rid of the deficit the right way — cutting spending and increasing taxes where necessary — is really hard work. It’s complicated and politically risky. And doing it the Republican way, with no tax increases and no cuts in defense, is going to be next to impossible. Why do you think no Republicans have promoted a reasonable method for eliminating the deficit? Even Paul Ryan’s approach would be a drop in the bucket.
It’s much easier just say “forget it” and let the world economy collapse. The people who promote this approach are the same kind of WATBs who sign on for a mortgage they can’t afford, mail their house keys to the bank, and default on their obligation.
I doubt if there are 10 people in the country who know what not raising the debt ceiling really means. Would it cause world financial armageddon? Not likely. If it would, any rational person would be an insane criminal to propose it….which would mean that roughly 50% of Republicans and 95% of Tea Partiers are anarchists. So lets do away with the stupid hyperbole.
Another thing you don’t hear anything about is the current status of federal receipts vs payments. Do receipts cover Military Spending, and Social Security and Medicare payments. If they don’t, then there really is no choice but to raise the ceiling. And the public needs to know what the other spending is. Why can’t ALL unspent stick-it-to-us spending be halted immediately? Let them drop their shovels on the ground where they stand at the moment. Everything else must have a priority; everything in life does. I would link a vote to raise the ceiling to two things: stopping the stick-it-to-us in it’s tracks, and reducing everything other then military/SS/Medicare to 2006 levels over a 6 to 12 month period. A “commitment” to a Balanced Budget amendment or any other kind of an amendment is worthless. The odds of that “commitment” being fulfilled by the marxists is zilch.
Proreason,
You touch upon what I am interested in, an analysis of what would actually happen if the ceiling were not raised. Rather than hysterics, I want a real, cold, sober, analysis of how it would game out. Here is why.
The federal government, namely the Treasury Department via the IRS recieves billions of dollars a day in tax revenue and other federal agencies collect tarrifs, fines, fees and other streams of dollars. This has to be many billions of dollars; an educted guess would be 3 to 4 billion a day on average.
Given the revenue stream, I want the specifics of how default would work and what would come due over time. Congress needs to haul Bernanke and other treasury officials up to the hill, put them under oath, and get a blow by blow as to how our government spends money and when.
I am not reflexively agreeing that we should default like some others posted above and below. I am probably just as angry with these profligate pukes as any one, but I want to act in an educated fashion regarding the decision to default, not out of emotion. When we understand better, we may be able to put even more pressure on Obama and his socialist friends, and extract even more concessions.
The progressives are dangerous people and they need to be weakened in order to protect the republic. They thrive on chaos, it is part of Cloward-Piven strategy. We need to deny them the opportunity they will find in chaos. We need to use the prospect of default to damage the socialists and preserve and restore the Constitution.
The Constitution is at odds with socialism, communism, facsism, and Sharia. The progresive forces can be badly weakened if we use the prospect of default properly. We must first understand what would really happen. Obama does not want to be remembered in history for a Hoover like reaction to crisis. He senses that he is in a weakened political position right now. The time is right to employ default to further disrupt and destroy the strategy of his allies.
Eliminate participation in the U.N., eliminate foreign aid to people that hate us, get rid of worthless government agencies, eliminate obamacare, cut overhead from entitlement programs, and there is no need to increase the debt.
Mr. Moran writes a piece of garbage that does nothing to address the issue. He simply calls those who disagrees with him insane and then pushes an end of the world scenario to compel people to follow him. Does he get paid to write this fluff? If so, I am sure it is too much. There is no substance here – just RINO hangwringing and bemoaning about the mean conservatives who might force the United States to pay its debt before the bottom truly falls out. Cancer often requires radical treatment.
Kipling,
I had the same reaction. I thought his piece, while probably containing large kernels of truth, lacked specifics and smacked of the sort of writing we get frequently from the likes of Davey Brooks, Tommy Friedman, and Davey Frum, namely condescending apocolypse.
I want more facts regarding the mechanics of default. The big spenders put us in this position over a period of 100 years. I want to see the prospect of default used to put the spenders in a coffin.
It’s time for tax payers and responsible adults to set policy and the direction of government spending in the US. I want to know all the facts, and then employ a strategy that puts us on a path to solvency that neuters the spenders and attrits their political power. The prospect of default is useful for restoring our liberty and fiscal health.
Once again, Moran sides with the donkeys. Just come out of the closet and admit you’re a drunk spending democrat, ok, Rick?
A hollow threat is NO threat! Crashing the economy is a hypothetical, in the case of failure to raise the debt ceiling. Greece has discovered that there is an absolute limit to which debt can be allowed! Study them closely.
Refusing to increase the debt ceiling would be peachy, if the consequences were not so draconian. Want to default on existing debts? Great. Then the dollar will forfeit any remaining status as an international currency and even as a respectable domestic currency. Think that’s good? Want to pay lots more for Chinese junk and foreign oil? Then refuse to increase the debt limit.
An increase in the debt limit need not mean, and should not mean, increased spending.
All appropriations bills arise in the House. The Republicans are now in charge there and don’t have to fund anything unless they want to. The Senate can’t do it and neither can President Obama.
Our CongressCritters in the House should be clever enough to realize that an increased debt limit does not compel them to spend more money or prevent them from spending less. It does not mean that existing funding must be maintained; there are lots of places to deny funding (the new fiscal year begins in March of this year; the lame ducks failed to pass an omnibus appropriation bill providing funding for any longer than that) and that’s where the focus must be. Starve ObamaCare, the EPA — even the sainted United Nations and a bunch of other ravenous beasts to death. That will work and will be healthy rather than suicidal.
Confidence in currency goes hand in hand with confidence in the books. When the latter has gone haywire, the former is like the lamb in the nursery rhyme about Mary having a little lamb.
I still say that the best option is for natural amalgams to rise and have their own natural resources backed currency.
http://www.financialpost.com/Asia+headed+crisis+strategist+says/4089096/story.html is illuminating, especially the end of the piece.
The Feds have maxed out the credit cards they had, and the solution is to get a limit increase? Because, like any other junkie, they spent everything on feeling good and say that not spending more would be a catastrophe?
Back in the real world, step one is to cut up the credit cards and step two is to budget the resources you have to live within your means.
Just what is the difference between crashing the government because we won’t raise the debt limit or crashing it because we spent so much money that we can’t even pay the interest on the debt? Really its just a matter of timing.
I don’t know that a balanced budget amendment is enough to get spending under control. Maybe a stated fixed percentage of GDP would be better. But if we don’t elect people with any principle, will they adhere to it anyway?
I say a much bigger goal should be the price of expanding the debt limit.
An across the board 10% decrease to all welfare benefits, food stamps, unemployment payments and EIC. Limit all benefits to citizens only. Prohibit non-citizens from welfare. After all if they can’t pay their own way, we don’t need them here and pay for their one way ticket back home.
And concrete plans to drill for oil everywhere. Off all coasts, shallow water, deep water, on federal lands, and in ANWAR and Beauford. And nuclear plants to free up resources for transporation.
Elimination of all federal welfare to farmers and ethanol producers. Free the markets.
Complete elimination of the estate tax.
Get rid of SCHIP and replace with tax credits for everyone to buy their own insurance.
Vouchers for School kids to attend the schools of their choice.
Let’s use the crisis to drive a stake through the welfare state.
wait what? no more climate change regulatory bureaucracy,(EPA) etc no unfunded mandates,(obamacare).instead of raising the debt, lets cut back on the last thing implemented. honey we can’t afford a new fur coat,well lets not pay the rent, we’ll have enough money then.
“With the deficit expected to top $1.3 trillion, $50 billion is about on par with spitting into a four-alarm fire. And yet, we have a promise from Harry Reid that the Senate won’t consider such draconian cuts, and President Obama will never sign any such legislation”.
When you are debating politicians who think a $50 Billion cut out of $1.3 trillion is ‘Draconian’ and they ‘will never sign such legislation” and you still think you can reason with them, then you are a fool.
I am not well versed enough other than in my personal life to make the call on the debt ceiling, as this is a new one in a never ending series of incredibly mind numbing revelations. Still it doesn’t take a mental giant to understand we are headed off a cliff unless we do something and soon.
If we do not change course then at some point sooner than later there will be people in the streets and I suspect that here in America it won’t be as pretty as it was in Greece.
With my limited knowledge of debt ceilings other than those in my company it looks to me like pay me now or pay me real soon, but you’re going to pay me and either way it’s going to hurt real bad. I’d say let’s get it over with, the spenders in D.C. right and left are completely clueless and not representing the American people. Hang ‘em high. Thanks,
As long as we are using Roman Empire analogies, allow me to ride my chariot around this circus.
The leftists have seized the Democratic Party, nearly wiped out the moderates and gleefully sacrificed them at the altar of socialist power.
They seized the banking and finance industries, seized the health industry, seized the auto industry, seized the insurance industry and gave them all a good throttling by their respective throats. They crashed the housing and real estate markets, ran up a skull and crossbones flag against small business, midsized business, big business…any business…called them every vile and filthy name and forced all money onto the sidelines.
They tried to ram a global warming hoax down our throats, put into play as many money grabs for “redistribution” as they could, made a full frontal attack on inheritances, called heirs essentially “backsliders”, attacked our own borders, treat jihadist murderers as petty nuisances, and botched virtually every international interaction like a bunch of circus clowns piling out of a Volkswagen, in disarray and total befuddlement.
And it’s the REPUBLICANS who are to be blamed for the Democratic asteroid that is now on a collision course with the imbecilic orbit they put us on?
The Republicans, as far as I can tell, are trying to figure out whether we should:
a)blow up the asteroid with nuclear warheads
b)try to get a giant magnet to slightly deflect the course of the asteroid through a slight gravitational course correction;
The leftists who have steered us into fiscal hell are beating their breasts, swollen with pride over how much they have changed our course and want everyone to acknowledge the monumental impact they are about to impose on us. They not only want to stay the course, they want to accelerate it.
And it’s the REPUBLICANS who should be brought to task for the Hobson’s Choice options?
If we blow it up, using the nuclear option of not allowing the debt ceiling to be RAISED (that is, stay the same, even if a slight shortfall rains down some bad news on us), we could be hit by a million smaller impacts. Terrible choice.
If we do nothing, we simply kick the stupid socialist can down the road, the orbit is unsustainable. We are looking to wipe out the entire fiscal planet. ANYONE who suggests this is either an imbecile of galactic proportions or is INTENTIONALLY sabotaging this land of ours.
If the Democrats and the lackey lapdog media wish to play chicken with the horrific situation they created, there are ZERO good choices to combat them. ALL arrows and gun barrels should not be pointed at Republicans. Sorry. This is NOT their orbit. Their contributions to putting us in this orbit are puny compared to the leftists.
So we have a choice. An ugly, horrific, despicable choice.
Give unto Seizures that which is Seizures…and all that they called down upon themselves.
Or band together, point the accusing finger at the real culprits and demand that they admit what they have done and force them to work with us to fix it.
Or sit on our hands and wait for the fiery ball to make us extinct.
Either way, get your finger out of chest of the Republicans. You are poking at the wrong guy.
Continuing with the asteroid analogy, use of a gravitational course correction requires time- several years in fact. If you wait too long it ceases to be an option, and then blowing it up with nukes becomes the only option available.
when government expenses add up to 100% of GDP the time for your so-called “reasonableness” is over, endless compromise is what has gotten us in this mess, more of the same will not get us out of it.
it’s time for drastic action, Now!
You go!
Sometimes I wonder how the Democrats sleep at night.
Rick is right. A lot of what calls itself conservative is nothing more than dogmatic nonsense. That’s almost like the communists with their inevitability of a socialist society. They also were convinced that the capitalistic system had to crash and then good things were going to happen. What are the current examples that such a prescription would make the American economy stronger? How is that supposed to happen. All I see is wishful thinking and dangerous illusions born out of a Limbaugh-Beck cult. That is not conservatism though.
I say go for it. The raise in the debt ceiling is to cover the last 6 years of Cloward Piven new world order payments and the soros Fed payoffs to their buddies. What? Because they all haven’t robbed us of every penny of our prosperity yet? Because they haven’t amassed enough larceny to cushion their lifestyles to weather out the storm? Nov 2nd caught em all with their pants down around their ankles. I say give em hell. Hit em hard, hit em where it hurts. We ain’t ever going to get back what was stolen and don’t even say a word about it to me otherwise. One way or another we all get screwed. Well I want a choice and say in the matter. I mad as hell and want to exact revenge on these people who have robbed me and my fellow Americans blind.
Don’t you put me in your list of people who think we got to take another dive. Screw you Mr. Moran
If you haven’t noticed, this is the big leagues brother. You got to get plumb mean sometimes and go for everything to take the enemies of this Constitutional Republic down.
Up their arses.
Beck is coming at it from the recovering alcoholic’s perspective. The enablers in the alcoholic’s world continually bail him or her out- pay his bills so his kids won’t starve, pay the light bill, give him loans-the sitauaion just gets worse for the alcoholic and for his family who usually goes bankrupt-
The enablers just prolong the inevitable-if they had acted sooner they might have saved themselves alot of money and grief. So to those people who have enabled an addict or alcoholic until you say ‘enough, no more’ this is exactly that type of situation-there is no way out but ‘through.’ If they continue to do the same thing(raising debt ceiling every 7 months)they are putting off any chance for survival. Rip that band off-for God’s sake- there may be hell to pay but it’ll be worth it. If there is a God He will be there for us.
Funny, I don’t recall financial armageddon last time the government shut down.
Articles like this are one reason that Pajama’s Media is not considered a a conservative site. Negotiations are won by those who have the most willingness to let the negotiations fail. If I have an absolute resolution that in the end I am going to buy a specific car, and I go to negotiate with the salesman and the first thing I do is tell him that I am not only willing to pay full price for that particular car, but even think it is worth more than what they are asking, do you think I am going to walk out with a bill less than current asking, or do you think that I will walk out of the meeting owing more for the car than it is actually worth?
This is not some book where the characters minds are made up by the author, where one man could say that he’d pay double and the other negotiator is going actually decide since the person can pay double he should sell it to him at a 25% discount, even if he is losing money at that price.
If the Democrats are guaranteed a debt ceiling increase, what incentive do they have to even negotiate? They could all sit on the sidelines and vote no, ending up being on the conservative side while forcing the Republicans to walk off the cliff voting lock, stock and barrel for the whole mess, while getting no concessions at all.
I have a question. Why exactly would not increasing the debt limit damage our position with our lenders? Are you all suggesting that the government could not in fact survive a situation in which people stop lending the government money? That those who are debtors to us would be the first ones to be denied funds when there are significantly large numbers of places where not making payments would bring the government closer to the Constitutional limits placed upon it by those who voted for the Constitution and the Amendments. Are you telling me that the first place the government would look to stop spending would be on interest payments which are constitutionally required to be paid, and not the arts, the U.N., Obamacare, Education Department, Agricultural Department and so forth?
It is absolutely conservative to stop the growth of a government that is progressively destroying our children’s futures with a burden of debt they will never be able to pay off. If we can only create a certain amount of wealth, and tax a limited amount of that wealth, and the interest payments become larger than this number, it is a perpetual and permanent burden.
The government will default on its debt unless the debt limit is increased? Federal revenue will be over $2 trillion in 2011. Maybe the House should pass a funding bill to pay interest on the debt and to pay for common defense. The rest can wait until the White House and the Senate agree to major spending cuts.
T Tommy has it right. Clinton shut down the government. All but the most essential services stopped.
However, that was not a default on our debt. Defaulting would have serious effects in interest rates, not just for the government, but also for the private sector, as the government will no longer be lending to the banks. Fortunately, the debt is required to be paid.
SS/Medicare will be unaffected. They have a separate revenue stream. While they are in the red a bit, they have $2T in Federal IOU’s, which are required to be paid.
The problem with trying to cut spending is that so many government programs and spending are already built into law on a schedule. What Congress would have to do then, with no raising of the debt ceiling, is prioritize which bills get paid, and which do not, in the face of this lack of cash. They have to do it in such a way as to not allow the senate or the President to be able to stop them. They have to write a whole new budget, and gore the Dems’ sacred oxen. It can be done, if one is willing to be draconian.
The fact is, it is not the end of the world at all, any more than it is for your household when your credit gets cut off. It forces austerity. The markets will panic a bit, but even that can be avoided by Pubbies telling them that they are forcing austerity on the government.
“SS/Medicare will be unaffected. They have a separate revenue stream. While they are in the red a bit, they have $2T in Federal IOU’s, which are required to be paid.”
Actually, you are incorrect. The Federal government has no obligation to pay any Social Security or Medicaid payments once it chooses not to pay them. The money owed is intra-governmental and thus would not be forced to be transferred by anything constitutional. The “separate” income streams for SS and Medicare have been deemed general revenue by the Supreme Court of the United States of America, and therefore are not allocated discrete accounts. This is why the government is allowed to spend those surpluses.
People do not have some special separate account at the Social Security bank as the government tries to tell you they do. The only place that the taxes levied go is the General Fund and pays only current retirees and disabled people benefits. But there is nothing in the law that says that you are owed anything in retirement, such that when the government can no longer meet its promises, it can simply change the law to say that SS and Medicare no longer exist and you have absolutely 0 recourse to get your paid taxes for SS and Medicare benefits back. So suck on it, it is simply a ponzi scheme and one that needs to be eliminated.
Not rising the debt ceiling would simply force the government to decide what shut down, what cut down, what keep and what not.
They would have a limited money supply and then they could not spend freely. They would be forced to take difficult decisions and bear the weight of the decisions.
They will fund the the Education or MedicAid?
Their decisions will show off immediately what they really care for to the electors.
If you are really interested in the future of your children, let them be debt free and not burdened by 30-40K $.
The saps who bought Mortgage Backed securities will not be compensated 100 cents on the dollar. That is because those securities are the most toxic financial instruments around today. Breathing on its neck, when it comes to toxicity, are US government securities. There is no way that the US would be able to pay back those securities in full.
Which unless a ripple effect of shredding the balance sheets of those who hold toxic assets, regardless if they are Mortgage backed securities, US treasuries, Portuguese Sovereign bonds, French Sovereign bonds, German Sovereign bonds, British Sovereign bonds, Spanish Sovereign bonds, and so forth. Why? Because they are not worth what their value is deemed to be.
For 77 years the dems have demon-strated that they will not exercise fiscal responsibility.(Or any other kind). They are determined to spend us into bankruptcy so they can turn us over to their International banker masters. Almost all of the reps are on the same track. And Mr. Moran charcterizes those who oppose national bankruptcy as crazies?
In the first place, we should have zero national debt. If we can’t pay cash we shouldn’t buy it. We need a law to that effect. That means the Federal reserve has to go. Now! Drastic cuts must be made in entitlement spending. The federal government must be cut by 70 or 80%, for example.
We must always spend considerably less than we take in, so we can pay off our debts. otherwise, we must repudiate them.
Job loss must stop. No more NAFTA, et sim. When we put Americans on the dole so Abagazonians can prosper, we act in a selfdestructive manner. The outsourcing of jobs must cease. Thats easy. If your factory is not here, we tariff your goods so your cost is the same. Then there is no advantage to outsourcing. Moran is wrong. We must stop the spending, period. And, since the Spenders will not stop, we must bust the spending system and start over; or die.
I don’t see a huge catastrophe with the thought of the debt ceiling being left where it is.. How about if all government workers began working just two weeks a month with the other two weeks unpaid. That would be a great start. We don’t need them. We took care of ourselves just fine before the idiocy of giant government began to descend upon us with Lyndon Johnson’s New Deal.. or whatever it was called. Now, after we let the government worker bees begin their new schedule, then we can get together, sell off a ton of government land (why the heck does the government own it in the first place?) pay off the debt with the proceeds, and then, institute the Fair Tax, HR 25, and get back to LIMITED,LIMITED Constitution following governance, you know the kind of Republic that made us the most powerful free people on earth..
“Their plan is to literally blow the world up and watch it burn by refusing to vote to raise the debt ceiling.”
Buffoon, about as insightful as Jazz Shaw.
“No one seriously believed that they were hoping for a default.” Why not? The O. administration can peice institutions back together in arrangements that display the socialism Himself is said to desire. Of course, Treasury can print more dollars to help pay down the national debt,and its business as usual for the USA with the added pressure of inflation threatening to go ballistic. Pay down. No one says convincingly that we will ever pay back $14 trillion of Tres. bonds and other paper. And we cannot produce our way to a surplus of dollars doing all the things imaginable by a democratic society. Refuse to raise the ceiling, let the rest of the world laugh heads off at the default, keep right on going with congressional politics battling for supremacy. The rest of the world will then have to pay more attenton to the effect a socialist US economy will have worldwide.