What happens is that we can’t pay bills that are already in the pipeline. As a homey example. Your family has $3,000 a month income, and you have $3,000 a month in bills coming in each month. Suddenly your boss cuts back your hours because of the economy and starts paying you $2,600 a month. So either you don’t pay $400 in bills already committed, or you mess up your credit rating and interest on some of these payments increases. So, what do you do, not pay or go to your credit union and borrow enough to carry you for a couple of months until you can cut back on you living expenses.
If we don’t raise the debt limit we will not have the money to pay our already committed obligations. Thus our credit rating will be damaged, and it will, for reasons too complicated to go into here, end up costing us all more money. For example, I have an equity line of credit at a very good rate of interest. My interest rate will go up which will squeeze my already limited income, as my Social Security has been frozen for 3 years while food, fuel and medical costs have risen.
When we have the debt limit increase, then we can focus on reducing our expenses, and we won’t be paying higher interest rates on the national debt as we would if we ruin our national credit rating.
Here are the facts, as reported by MarketWatch and the Bipartisan Policy Center. You do the math:
* The federal government receives approximately $200 billion in revenues each month.
* Interest on the national debt in August will be approximately $29 billion.
* Social Security will cost about $49. 2 billion.
* Medicare and Medicaid will cost about $50 billion.
* Active duty military pay will cost about $2.9 billion.
* Veterans affairs programs will cost about $2.9 billion.
This still leaves $39 billion each month. Can you make the Dems explain how this will lead to Armageddon?
If Congress doesn’t agree to raise taxes and the national debt limit, they will then have to make the tough choices about which of the remaining programs gets paid or cut and by how much:
* Defense vendors
* IRS refunds
* Food stamps and welfare
* Unemployment benefits
* Department of Education
* Department of Housing and Urban Development
* Department of Justice, etc. etc.
In sum, federal spending would have to be cut about 44 percent.
So the next time you hear Obama, or Senate Majority Leader Harry Reid, or Sen. Charles Schumer, D-NY, or House Minority Leader Nancy Pelosi, or any of the multiple Democratic echo chambers in the liberal mainstream media, POINT OUT that what they are saying is pure demagoguery, or you could just call them liars.
Nope, we already tried that. The ONLY thing that is focusing Obama and the crazed Democrats on cutting spending is not approving an increase in the debt limit.
That didn't work for the last dozen debt limit increases, so let's get serious on expense cuts now.
To your example, suppose you had just blown $15,000 in Vegas as your personal stimulus. Before your bank raised your line of credit, I think they'd like to know that you weren't planning to go back to Vegas next year.
TARP and the stimulus were supposed to be one-time events. Now Obama is trying to bake that $1.5 trillion a year into the base line budget. The Republicans should stand firm on pulling out that out of the budget. Obama claimed that Obamacare was revenue neutral, let's hold him to that promis.
Who else is a safer bet?
What other countries are the investors better friend?
If the government of this country will stop this madness and cut its spending, America will be an even SAFER BET.
It is simply not true the United States cannot pay its interest on indebtedness without raising the debt ceiling. That is a proven lie.
You are participating in furthering the lie Democrats are using to scare people.
This sky-is-falling crap is only true of federal out-of-control spending.
Refusing to raise the debt ceiling is the beginning of the proper path to return to solvency.
It forces the major cuts in spending our federal government must make.
Nobody in the world is fooled. The United States is already insolvent and everyone knows it.
That didn't work for the last dozen debt limit increases, so let's get serious on expense cuts now.
To your example, suppose you had just blown $15,000 in Vegas as your personal stimulus. Before your bank raised your line of credit, I think they'd like to know that you weren't planning to go back to Vegas next year.
TARP and the stimulus were supposed to be one-time events. Now Obama is trying to bake that $1.5 trillion a year into the base line budget. The Republicans should stand firm on pulling out that out of the budget. Obama claimed that Obamacare was revenue neutral, let's hold him to that promise.
The committed obligations of which you speak are the innumerable wasteful, politically motivated “obligations” that have gotten us where we are today. Congress can repeal what it creates. There are sufficient revenues coming into the treasury to cover debt servicing, Soc. Security, Medicare/Medicaid, & defense. The rest is discretionary spending, not legally required to be spent.
In your homey example, you leave out the obvious, most common choice of cutting back. Cable gone. A/C turned up 5-10 degrees or off, if necessary. Nights out - gone. Shopping - no way. Steaks become chicken. Second car sold & insurance canceled. Whatever you can cut.
The very last, most irresponsible thing you could do is borrow money you can't pay back in the expectation of cutting expenses later. And especially so if you have known this was coming for a long time - years. First you cut your expenses to the bone, sell what assets you can, & only after do you consider the extremely dangerous option of getting deeper in debt. No financial adviser would tell you to run down to the credit union for some money to tide you over what could be a permanent cutback in income. Cut expenses now & deeply, not in a couple of months, is what he would say.
Obama, the Rats, & RINOs want to raise the debt ceiling to insure their reelection & maintain power, by directing that money to supporters thru Federal spending. It also saves them from having to produce a budget prior to Obama’s reelection. It has nothing to do with the fear of default.
The debt ceiling is not the edge of the cliff, it is the guardrail in front of the cliff. Raising the ceiling moves the guardrail closer to the cliff, putting everyone but the pols* in greater danger.
*They have a golden parachute.