Skip to comments.Treasury Says Anything But A Debt Ceiling Hike Would Lead To Default, As M.A.D. Escalates A Notch
Posted on 01/22/2011 3:38:11 AM PST by Zeddicus
After in the past week, the blogosphere had been hobbled by one after another mindless oped claiming that the US can easily avoid default by just paying the interest on its obligations, and thus does not have to worry about the debt ceiling, we decided to put some sense to this debate when we pointed out that the "US Debt-to-Deficit Difference Hits Fresh Record, As Treasury Continues To Issue 50% More Debt Than Needed To Fund Deficit" meaning that i) it is not a debt ceiling, it is a debt target (© Lizzie363), and ii) the hundreds of billions of monthly obligations that are funded through debt, are "legal" obligations of the US government that have to be paid in full every month or a default will occur regardless. Neal Wolin, Deputy Secretary of the Treasury, has just released a statement on the Treasury's blog saying pretty much just that. Which, however is certainly not a good thing, as it merely confirms just how totally screwed this country is, and that absent a hike in the ceiling to $15.5 trillion (which we believe is where the debt ceiling will be through March of 2012 when it will be raised to $17 trillion), the dollar will be backed by several trillion in insolvent Federal Reserve Notes, er, assets (that should quickly end all debate about EUR-USD parity). It also confirms that Bernanke has no choice but to continue monetizing debt, through QE and to do that, he needs to make it palatable to the general public, which in turn will mean either a material economic deterioration, or, as the two are apparently identical in the Chairbeast's mind, the Russell 2000.
(Excerpt) Read more at zerohedge.com ...
You’re kidding I hope.
Kidding about what?
What could the fed sell on a garage sale? Let's see, oil leases, mining leases, timber leases, land, buildings, surplus materials and so on and so on...
Why should the only things government sells be their votes, their souls and the American people down the river?
What is M.A.D.? It isn’t explained in the article.
About this... “If they vote to raise the debt ceiling at all, under any circumstances, we’ve been sold out.”
So you think there is no circumstance that would justify raising the debt ceiling? Not even in the short run? That’s absurd.
Attach the Obamacare repeal to a debt ceiling bill...
Attach a total Obamacare repeal and huge spending cuts to a debt ceiling bill...
Dump the whole smelly business right into Dingy Harry’s lap...
If a person has maxed out their credit cards and can't even make the minimum payment, is it smart to INCREASE their credit limit so they can temporarily make the payments by racking up more debt?
The Debt Ceiling is constantly being raised whenever the Debt bumps into it; making it no Ceiling at all. It is more of a group delusion. Why not just say there is no Ceiling. Or the Ceiling is whatever the Debt is at the moment. This is all such an economic house of cards.
If that’s the best story the Treasury can come up with then forget about raising the debt ceiling.
He’s serious, I’m serious, every Freeper who has taken an objective look at our circumstances is serious.
We are $9T in (publicly held) debt. Our GDP is $14T. Countries default at about 100% Debt to GDP ratio. At the Republicans deficit of $1.1T per year we will default in five years. In fact it will be sooner because as interest rates increase, due to servicing the existing debt, our Debt will be increasing exponentially.
If we can’t do it now, with this House, it can’t be done. The only way a “temporary” increase in debt makes sense is if it is after the budget cutters have won and seniors have seen the light and liberals have given up. The only way to do that is to hold the line now, service the debt, make minimum payments on defense and let the rest squeeze into what’s left. Senator Toomey and Governor Pawlenty have seen the light.
A debt ceiling hike merely postpones the default and insures that the catastrophe, when it occurs, will be much worse than if the natural course of events were allowed to occur earlier. When you shovel ever more sand to build the dike ever higher you are simultaneously digging the hole deeper. When the tide finally washes over the levee it will inundate everything in one huge cataclysm that will be ever so much more devastating than if the leakage had been properly taken care of earlier.
Our publicly held debt is actually much larger
title and link only due to copyright
Obamas $6.3 Trillion Scam Is Americas Shame
And that doesn’t even count all the recent bad loans the banks have off loaded unto the taxpayers through the GSE’s and even the put backs they sued BOA over were only settled to taxpayers for ONE CENT on the dollar and there are a whole lot more of them from the other TBTF banks in the portfolio.
BofA Freddie Mac Putbacks Resolved for 1¢ on $
Unlimited credit for GSEs seen as backdoor bailout
“Attach a total Obamacare repeal and huge spending cuts to a debt ceiling bill...
Dump the whole smelly business right into Dingy Harrys lap...”
Now we are talking.
I called my CongressCritter's office with that very idea about 2 weeks ago, though I put it a bit differently. Bohner should announce publicly that the price of a debt ceiling increase is the total repeal of Obamacare. And the Repeal Bill gets signed into law first. THEN and ONLY then do they get their 6 month debt increase.
Period. End of story. Negotiations over.
“I called my CongressCritter’s office with that very idea about 2 weeks ago, though I put it a bit differently. Bohner should announce publicly that the price of a debt ceiling increase is the total repeal of Obamacare. And the Repeal Bill gets signed into law first. THEN and ONLY then do they get their 6 month debt increase.”
I’m down with that.