Skip to comments.Administration Unfazed by GAO Report
Posted on 02/24/2013 10:44:11 AM PST by John Semmens
A recently issued report by the Government Accountability Office says that the federal government is on a financially unsustainable course. The debt is so large that the anticipated annual interest payments are expected to exceed the economys rate of growth. The government would have to run annual budget surpluses just to maintain its current debt to GDP ratio.
Despite all the publicity being given to the so called draconian cuts envisioned by the sequester, there are no actual cuts to spending. At best, only the rate of growth in spending would be slowed, but not by enough to generate a budget surplus anytime in the foreseeable future.
Treasury Secretary Timothy Geithner brushed aside the reports findings, insisting that the assumptions made by its authors are by no means certain. The belief that we have no alternative but to pay these debts is false. The government is sovereign. It has the means to perpetuate itself by whatever actions it deems necessary. If paying these debts becomes too burdensome it can decline to pay or inflate the currency sufficiently to wipe out the value of the money owed. The American people can rest assured that their government will survive by hook or by crook.
Of course, failure to pay would inflict huge losses on holders of US Government obligations. Geithner questioned whether this would be as bad as it sounds, though. Buying US Government debt is a voluntary act, Geithner reminded. No one forced these purchasers to risk their money in this way. They bought these bonds out of greed. We shouldnt weep too much if they suffer losses instead.
The Treasury Secretary took some solace in the fact that the Democrats core constituencies are largely safe from this risk. People on food stamps and welfare dont buy these bonds. Most of the working class owes more than they own. An inflation that wipes out the value of government debt would also wipe out the value of their debt. So were pretty confident that the Party isnt exposed to any retribution at the polls.
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You mean like we can’t cut spending? And can’t have sequestration?
Well, no $hit, Sherlock. We have been doing this for the last four years, and what does the moronic American public do?...they re-elect the putz who is responsible for another four years!!! Absolutely unbelievable!!!!!!!
The tax funded propaganda machine never lets facts stand in the way of.a.good narrative.
we have gone over the debt limit and we are watching the first and probable ........none seems to care.