Skip to comments.Debt Reckoning: Destroying Myth Of Government Default
Posted on 01/19/2013 7:31:10 AM PST by SeekAndFind
Budget Policy: Even if we don't raise the debt ceiling, enough revenue will still come in to the Treasury to pay our interest, our bonds and essential services. The government will not shut down- only its ability to borrow.
Like the fiscal cliff, the dangers of hitting the debt ceiling, while dire, are not necessarily fatal.
It would, however, concentrate the minds of the American taxpayer wonderfully and force Washington to do what American families do every day around the kitchen table - take the paycheck and pay the bills in order of priority. Pay the gas company and the electricity provider and forget that big-screen TV.
It may be time for Republicans to adapt the philosophy of former White House chief of staff Rahm Emanuel and not let the debt-ceiling crisis go to waste. It's time to destroy the myth that hitting the ceiling will cause the government to shut down and force the U.S. to default on its debt. It should force us to cut spending until we conjured up a sane fiscal policy.
There has been much fear-mongering from President Obama on the issue, and no small amount of hypocrisy from the spender in chief. This is the president who once voted against raising the debt ceiling when George W. Bush was in charge and said the comparatively modest debt the Texas Republican ran up while fighting the war on terror in a post-9/11 world was "unpatriotic."
In March 2006 when Obama was a U.S. senator, he had no problem voting against a stand-alone debt-limit extension. The final vote was close - 48 against the increase to 52 in favor of it.
(Excerpt) Read more at realclearmarkets.com ...
DO THE MATH:
we could still meet our core obligations:
The federal government takes in about $200 billion in revenues each month.
Interest on the national debt is around $30 billion.
Social Security costs roughly $50 billion.
Medicare and Medicaid cost about $50 billion.
Active-duty military pay costs about $2.9 billion.
Veterans affairs programs cost about $2.9 billion.
We can pay for ALL of the above and still have $80 to $90 Billion to spare. What we don’t have, is money for many of the rest of the programs the Federal government is not constitutionally tasked to do.
And that is the key phrase — “constitutionally tasked to do” — in discussing government finance.
In truth, most “entitlement” programs are not authorized by the Constitution and were “authorized” only by making up new meanings for simple terms.
A big chunk of government spending could be erased simply by deleting the introductory Preamble (”We The People of the United States ...”) to the Constitution. The Preamble’s generic phrase “promote the general Welfare” is now taken as blanket permission for all kinds of awful spending programs that the Framers would have NEVER allowed.
So yeah, let’s shut ‘er down and enjoy the sound of the anguished howling.
In a federal government shutdown, the determination of what gets paid is controlled by the executive branch not by congress. After a month or 2 of social security payments being delayed, and after the media is left to assess blame, no republican will be elected to any federal office for the next 100 years.