Is the White House bluffing about an imminent default on the $16.7 trillion national debt? Is the debt ceiling crisis just a made-up D.C. myth meant to frighten young children?
Heretofore, the story coming out of the U.S. Treasury has been that if the government’s borrowing limit is not increased come Oct. 17, the U.S. will default on its debt for the first time.
Besides the verbal threats that have been issued by the President on an ongoing basis, a 2012 Treasury Inspector General’s report on the 2011 debt ceiling debacle claimed there was no way the Treasury could distinguish between debt service payments and regular expenditures when the limit is reached, “While Congress enacted these expenditures, it did not prioritize them, nor did it direct the President or the Treasury to pay some expenses and not pay others.”
The report continues, “because Congress has never provided guidance to the contrary, Treasury’s systems are designed to make each payment in the order it comes due.”
Meaning, there would be no way for the Treasury to pay interest owed to creditors without extra borrowing authority, right? After all, the payment systems won’t allow it. Right?
Well… that might not be true after all.
Besides the fact that the government takes in an average $250 billion in revenue each month yet only owes $35 billion a month in interest this fiscal year, and can refinance existing debt up to the limit, both President Barack Obama and Treasury Secretary Jack Lew are now stepping all over themselves to redefine what a default actually means.
In short, they are capitulating on their principal threat to refuse to pay the debt. How do we know that?
On CNN’s State of the Union, Candy Crowley explicitly asked Secretary Lew if the government could “just pay the interest rate on these debts while this is worked out,” and Lew refused to answer the question.
Instead, Lew chose to equivocate with responses like, “They are willing to concede that if we don’t pay interest and principal on the debt, that that’s bad. Well, you know, it is bad, but there are a lot of things that are bad. You can’t pay all the bills if Congress doesn’t raise the debt ceiling.”
Emphasis on an inability to pay “all the bills” — he’s saying that other items besides the debt might not be paid — but nowhere did Lew say he would fail to make debt service payments. That failure let the cat out of the bag.
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Robert Romano is the Senior Editor of Americans for Limited Government.
10 comments
#ObamaFailsAgain #ReidFailsAgain #ImpeachReid #ImpeachObama
The Grand Old Party, Champions of the Pyrrhic Victory.
http://en.wikipedia.org/wiki/Pyrrhic_victory
Lew Said: ” You can’t pay all the bills if Congress doesn’t raise the debt ceiling.”
Sure you can Lew – just stop spending on all the bullshit you liberals and pseudo-conservatives dream up. Reduce military spending to 2003 levels, cut every new weapons system across the board, fund research and design only. We’re well into the Afghanistan draw down right now – speed it up. Afghanistan will fall back into chaos sooner or later regardless of what we do
Freeze at 2013 levels, Medicare, Veterans benefits and all other entitlement programs. Cut “welfare programs” back to food security levels only, eliminate the phone program and all the other BS swirled into “financially disadvantaged” programs – if they can’t eat it, they don’t need it.
Immediately cease all discretionary spending, cut the budget to 80% of the planned expenditure and prioritize the things you want to spend it on, when you run out of money you’re done.
Force USDA/EPA/Agriculture to consolidate under one roof with 2/3rds the current combined budge of all three.
Cut the Department of Education from the cabinet, reduce it’s budget by half. It educates no one and generally inhibits the progress of education which should be a state responsibility. Allow the remaining budget of the Office of Education to be used for grants, research and technology development.
Finally there’s this …“because Congress has never provided guidance to the contrary, Treasury’s systems are designed to make each payment in the order it
comes due.” Pass a fricking budget and stay within it – morons
http://www.forbes.com/sites/jeffreydorfman/2013/10/03/dont-believe-the-debt-ceiling-hype-the-federal-government-can-survive-without-an-increase/
+3
I agree. Just one little thing, though, I don’t consider Veterans’ benefits as entitlements. Those are very much EARNED benefits. Otherwise, 100% agree!
Concur, I have edited to state appropriately what I meant.
If a potential default is no big deal, why did the loons in charge of the Republican caucus think it would be an effective weapon to hold against Obama’s head?
If any of you commenters cannot explain what the “Repo Market” is, you are unqualified to weigh in on this thread.
Hey Colonel, you are aware that The HOR is respobsible for the budget too, and that from 2001-2009 the Congress passed Debt raises 7 times, for TRILLIONS of dollars with no problems at all, certainly no grandstanding like this. You call this good governance, they you are also part of the problem… Moron!
Why yes Chris – in fact I am aware of the fact that the House is co-responsible with the President and the Senate for the disaster we find ourselves in. I didn’t call this anything approximating “good governance. Iraq and Afghanistan have been money pits. but interestingly enough if we only paid for Iraq and Afghanistan and kept all other spending in check with 2003 numbers, we’d be as less than $10,000,000,000 in debt. Where’d the other $6,000,000,000 come from? Stupid spending. Bush started with a debt of about 6 trillion, he ran that to about 10 trillion – Obama has added 6 trillion in 5 years – he’s on track to crack 20 trillion before he takes that last ride on Air Force One. Everyone thinks Clinton was all that and a bag of chips because he “balanced the budget” – that’s both factually a stretch because the truth is he added almost a trillion to the debt.
Maybe you missed the last line of my long post up top: “Finally there’s this …“because Congress has never provided guidance to the contrary, Treasury’s systems are designed to make each payment in the order it comes due.” Pass a fricking budget and stay within it – morons”
I think they’re all idiots with spines of limp noodles – what’s your point?
I wish I could raise the speed limit of the roads I drive as easily as Congress raises their limit to borrow (steal) from current and future citizens.