Skip to comments.Live updates: the shutdown--Moody's offers different view on debt limit
Posted on 10/09/2013 1:42:44 PM PDT by RKBA DemocratEdited on 10/09/2013 1:43:50 PM PDT by Admin Moderator. [history]
One of the nationís top credit-rating agencies says that the U.S. Treasury Department is likely to continue paying interest on the governmentís debt even if Congress fails to lift the limit on borrowing next week, preserving the nationís sterling AAA credit rating.
(Excerpt) Read more at washingtonpost.com ...
(Dear Mods -Trying to post again - I've got the right title posted directly from the blog: no attempt to play with it, it's Washington Post blog, excerpted, Drudge has it as red highlighted hence front page news, I cut and pasted the url. If there is anything else, please let me know)
I’ve got the issue...it’s the 11:46 entry, you have to scroll down the blog. Drudge has it so it goes directly to that entry but if you cut and paste the link it goes to the top of the blog. I don’t know how else to post it. Sorry.
“A major credit rater expects the Treasury Department would avoid default if the $16.7 trillion debt limit were not raised.
In a document dated Oct. 7, Moody’s Investors Service said it believes that if the borrowing cap were not increased, the government would prioritize making interest and principal payments on its outstanding debt above other government bills, even though the Treasury Department has repeatedly called prioritization plans unworkable.
“We believe the government would continue to pay interest and principal on its debt, even in the event that the debt limit is not raised, leaving its creditworthiness intact,” the rater said.”
I saw this as well. Although it’s a blog, this really is breaking news, and of some importance. I suggest that it be added to the Breaking News sidebar.
When posting from a running "blog" like this type, click on the headline of the portion you wish to post. The url that appears in your bar should be accurate, then. That way, you can excerpt, and FReepers can click the link for more without scrolling all over the place.
You mean...the president and his party wasn’t telling us the truth? I’m shocked I tell you, shocked. /sarc
Are there other, more impartial sources that are also saying the same thing Moody’s is?
Either the default situation is a serious issue or it is not. If it is, we should not be telling the public that having the shutdown continue through it is trivial. It needs to be addressed and dealt with properly.
Are there impartial observers saying the same thing Moody’s is saying?
the only other semi-impartial sources i have seen are various articles on forbes, bloomberg and the like with CEO’s of varying political stripes saying even a prioritized default would be devastating. I’m not saying it’s true. But i will say I’m sure as HELL not going to trust moody’s.
The government has to cut 20% across the board In SPENDING if the debt limit is not raised. A defecto balanced budget. No more credit please.
Well if that is true, than the House GOP simply cannot keep this going past the Oct 17 deadline. Because they will not be capable of convincing the public that the White House and the Senate is to blame for this. So it depends on whether or not those CEOs are being truthful in saying a default would happen and it would be devastating. If they are right, then the House GOP has until the Oct 17 deadline and that’s it
not really. OCT 17 is not set in stone. most agree that is not the real day that it will run out, and probably closer to later OCT. Also if you are a large CEO you always air on the side of caution. No one really knows what effect it will have. heard some people today talking about dropping the USD as world reserve currency, however they were unable to come up with a replacement, as the Euro has it’s own problems, and China has pegged the value of their currency to ours...
Also, to be fair, others have made at least good faith efforts in trying to refute some of the hysteria:
and an older link from Forbes that discusses the same issues that are being debated now: http://www.forbes.com/sites/greatspeculations/2012/02/27/debunking-myths-about-debt-default-and-interest-rates/
But I do agree that more reliable information on this is always better. The statist leftists can get away with delusions, distortions and only using convenient facts. We can’t, and there comes a time when we simply have to buck up and deal with this.
though this author may indeed be underestimating just how hellbent the White House is on milking this for all its worth, but this piece is still worth a look anyways.
all good articles. The one thing i notice they don’t include is that after we pay the constituionally required debts, we are essentially handing over the choice of what to spend on to the president. I’m going to have to jump threads and apollogize to colt.
That is true, but that has been a severe problem form the beginning. The House GOP as it stands has, unfortunately, always been limited, by our built in balance of powers system if nothing else, in controlling what, exactly, Obama spends the money on. Conservatives must win a majority in the Senate and the House for any chance of this to change in the near future.
Another reason why I am hoping that if the hysteria over the debt default really is just hysteria, that it can somehow be shown to the public. At the moment, this is a PR battle and conservatives have to win more PR battles or there will always be distinct limits to what they can do on a federal scale.
“Default” would be another unilateral Spite House action, like closing the WWII monument, NOT anything that followed organically from the debt limit thing.
“The one thing i notice they dont include is that after we pay the constituionally required debts, we are essentially handing over the choice of what to spend on to the president.”
Exactly. That’s the bad news. The good news is you’ve trimmed the possible expenditures by at least 20%.
S&P is far more honest and credible than Moody’s.
The reality of a real debt limit:
The Debt Ceiling is the Law of the Land
redstate.com ^ | 10/6/13 | Daniel Horowitz
Posted on Monday, October 07, 2013 6:07:28 PM 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.
Because S&P honestly downgraded U.S. debt among other things. Sorry I didn’t reply sooner.
so what was dishonest about this report?