Skip to comments.The Debt Ceiling is the Law of the Land
Posted on 10/07/2013 6:07:28 PM PDT by cotton1706
Over the past few weeks, Democrats have indicated that they have no intention of negotiating over Obamacare, opting instead to shut down the government. They are justifying their obstinacy by asserting that Obamacare is the law of the land. Well, if that is the game they want to play, we should return the favor with the debt ceiling. The debt ceiling, pursuant to the Second Liberty Bond Act of 1917, is the law of the land. And it has been so for far longer than Obamacare.
Throughout this debate over funding Obamacare in the budget bill, House GOP leaders have stressed how the debt ceiling was the more appropriate means of fighting Obamacare. After all, it was the next fight. But as if on cue, some Republicans are already using the same Democrat talking points about the risk of default.
We are going to hear this erroneous talking point propagated by both parties over the next few weeks, so lets put the myth to rest. The only way we default on the debt is if we fail to pay the interest on the public debt. According to the updated budget projection from the CBO, interest on the debt will be roughly $237 billion for 2014. Thanks to the short-term revenue benefits of the fiscal cliff and Obamacare tax hikes, the federal government is expected to rake in a record $3.042 trillion from the private economy this year.
Lets engage in a simple math exercise. $3.042 trillion $237 billion = $2.805 trillion. As long as the Treasury pays the first $237 billion in revenue to the shareholders of our debt, there will be no default, and we will have $2.805 trillion left to spend. Again, default is taken off the table. Discussion over.
What do you do with the remaining funds? You start funding core functions of government and those programs that people are already dependent on.
Social Security (retirement and disability) $848 billion
Medicare $505 billion
Medicaid $298 billion
Defense $582 billion
Veterans $83 billion
Those expenditures account for roughly $2.3 trillion. The remaining half trillion can be prioritized as needed for other functions related to homeland security, national parks, or any other limited function. Hence, the debt ceiling is a built-in balanced budget mechanism. If Democrats want to fund other functions of government, they need to commit to a balanced budget. If they want to fund the HHS and the IRS, they need to get rid of Obamacare. If they want to fund the EPA, they need to get rid of the war on coal.
The power of the purse manifest in the House of Representatives, in conjunction with the debt ceiling law, reflects democracy at work, especially with divided government. Its time we stop peddling the myth of default, and start using our leverage to restore constitutional government and bring relief to those who are losing jobs and suffering from the high cost of living engendered by the harmful activities of the unconstitutional aspects of government.
imho, article makes excellent points. May the gope read the article and learn.
They Democrats are purposely dragging this thing out so they can eventually tie it to the debt ceiling and force our hand.
>>The Debt Ceiling is the Law of the Land<<
I am going to use that one!
But all legislated expenditures are equal.
This “some pigs are more equal than others” argument is not for me.
The debt payments are constitutionally given priority, but all other expenditures are equally valid and legally compelling.
Don’t merge the debt limit and spending battles. Win the spending battle and adjust the debt limit accordingly.
The Dems will never allow a default to happen because it would be the end of the spending spree since it would mean the end to easy borrowing.
The Dems must have the next round of borrowing to continue to SPEND.
The only reason the Pubbies will not force the issue is that they intend to spend as well.
So I say take the debt limit to wall. Dems will have no choice to cave or start living without borrowed money.
It would be interesting to see how the debt repayment is structured. How much is coming due in principal that has to be retired?
John Boehner — HOLD THE LINE!!!!
If obama doesn’t make the payments there are going to be some pissed off Chinese. Think they will foreclose?
I mentioned I believed the government should develop a balanced budget and was ridiculed by a Mormon who insisted that the US had only had a balanced budget one year out of its history and it is only a valid concept for private ventures.
Never heard that before and I really have no idea how they can sincerely justify their stance, even after studying money markets and financial instruments for many years.
I guess I just don’t get it, but those inner city youths driving new BMWs, and owning houses without 1/3 my income or 1/10 the education have it figured out. /s
They say... ObamaCare is Settled Law.
I say... The Debt Ceiling is also Settled Law.
I don’t see how the Dims can force anyones hand with the debt ceiling. Obama has said the US will default. The US will not default and Obama will pay the interest on the debt.
I would be calling the Sec of Treas in front of the finance committee now and have him explain his bosses remarks regarding default.
You also have to pay back the principal on any debt maturing, probably no small sum.
That is an excellent idea. Ask him whether the administration plans to follow the law in the event the ceiling is not raised.
Clearly this is political posturing on both sides.
As long as we (the IRS) is collecting tax revenue, we will not default.
Principal payments on maturing debt will be refinanced by the FED and it’s QE* policies.
Sometime maybe, but it can be rolled over now. It would be trouble if the interest rate goes up, but Ben Bernanke won't let that happen.