We’ve all heard a lot about default.
DEFAULT LOOMS! screeches the Huffington Post
The right is blaming the left. The left is blaming the right.
You might have wondered, as I have been wondering, why is the left so lathered up if this is hurting the GOP so badly? As we near the apocalypse, OFA takes a dark turn.
There are suggestions that Obama wants to destroy the US economy. Tempting as that is, no worries. Remember the sequester? Remember all the end of the world stuff from the left back then?
Default is not going to happen. Period. Here’s why:
Chart courtesy of Freedom Works
Few know what default is. Default consists of failure to service the debt. If you look at the chart above, you will see that debt service runs about $20 billion per month. The US government takes in about $200 billion in tax revenues every month. That’s more than enough to service the debt.
Slowing down IRS refunds and EITC payments to illegal aliens is inconvenient, but it is not default.
One of the nation’s top credit-rating agencies says that the U.S. Treasury Department is likely to continue paying interest on the government’s debt even if Congress fails to lift the limit on borrowing next week, preserving the nation’s sterling AAA credit rating.
In a memo being circulated on Capitol Hill Wednesday, Moody’s Investors Service offers “answers to frequently asked questions” about the government shutdown, now in its second week, and the federal debt limit. President Obama has said that, unless Congress acts to raise the $16.7 trillion limit by next Thursday, the nation will be at risk of default.
Not so, Moody’s says in the memo dated Oct. 7.
” 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 memo says. “The debt limit restricts government expenditures to the amount of its incoming revenues; it does not prohibit the government from servicing its debt. There is no direct connection between the debt limit (actually the exhaustion of the Treasury’s extraordinary measures to raise funds) and a default.
The memo offers a starkly different view of the consequences of congressional inaction on the debt limit than is held by the White House, many policymakers and other financial analysts. During a press conference at the White House Tuesday, Obama said missing the Oct. 17 deadline would invite “economic chaos.”
The Moody’s memo goes on to argue that the situation is actually much less serious than in 2011, when the nation last faced a pitched battle over the debt limit.
“The budget deficit was considerably larger in 2011 than it is currently, so the magnitude of the necessary spending cuts needed after 17 October is lower now than it was then,” the memo says.
Treasury Department officials did not immediately respond to requests for comment.
No comment? No surprise there.
The money is there to service the debt and so there will be no default unless Barack Obama specifically directs Jack Lew not to service the debt.
And I bet that that won’t happen, because I know the money is there and now so do you. There will be inconveniences, but no default. The world would know that Obama did it needlessly and so would history, and I doubt he would risk it. That is, unless he really does want to destroy the economy.
What’s that? You’re wondering why the media hasn’t told you this? Indeed.
It’s time to call the bluff.
DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education.
DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.
Except for liberals being foolish.
THIS+++++++++
Look closely at the size of the spending segment labeled borrowing deficit. That represents the amount that would have to go unpaid—something over $600 billion dollars.
Freedom Works has suggested that our full debt service obligation must be met. That means the dark red Debt Interest segment is off limits. So, which of the remaining spending segments do the geniuses at Freedom Works suggest the $600 billion should be cut out of? They must have something in mind.
Yeah, they would really like to put him in that position, wouldn’t they?
Freedom Works… The very people who worked up a blueprint for defunding Obamacare that has led to this dysfunctional situation.
What would the Constitutional basis be for a president prioritizing the payment of federal obligations, as they suggest? I’m not sure one exists. What we might have is a case of a dysfunctional Congress that’s run afoul of the Fourteenth Amendment.
Spending cuts suck but that is what happens when you overspend! What would you suggest, borrow and spend more? Where does it end? Where do you see this concluding if Washington keeps spending money that we don’t have? Yeah, it ends the same way, just we are all deeper in debt. Stop the bleeding money now. I have a feeling one group will band together to get though and the other will eat itself.
FreedomWorks is apparently operating on borrowed money, so they might not be the most reliable source of advice. I suppose they can always set and example and prioritize who they repay.
@Greg: LOL
Well, we know Obama would see that Obamacare is funded first, he’s already said that money is authorized and must be spent. But, the Chief Executive of the country is held responsible for the execution of the country’s laws. He is the one that is required to submit and get a budget passed. Complete and udder (pun) failure.
I don’t really care who does or says what, the math is hard but it doesn’t lie. if you bring home $2000/month and spend $3000/month there is no way to make that up in volume. The only recourse is to stop the spending, bring it under your income and start paying down debt. If you were the Government, I suppose you could start selling off land rights and maybe the odd town or two, but unless you have stopped the crazy ass spending you have just put off the point were you are out of all resources, no one will offer you a loan and then you are screwed. There is no way to dodge the bullet, we are going to get hit, it is crisis management now and part of that is to start slowing down before you go over the ledge, slow down enough and you may not go over. No one will be happy, but the country survives with some assets that it can build upon, the other way we have nothing left over when we hit bottom.
@Rob in Katy: Or, you can print up a storm and pay off the debt with cheaper dollars. Of course these cheaper dollars makes everything more expensive, part of why grocery prices are up significantly. Sadly the Left are challenged when it comes to basic economics. One moron said that it’s ok for the Fed to print more money, not realizing that it makes their money worth less. At least we’ll have FREE medical insurance, right?
I’m wondering, what happens if Obama doesn’t pay the debt as required by law?
Very succinct. Send to all flubby, sad sack, inartculate, RNC boobs to have in hand when in front of a camera.
@Greg:
Greg
The chart came from FW. That’s it. The rest really comes from Moody’s. Failure to service the debt is what constitutes default. Nothing else. FW did not make up the debt service total.
This is what makes it so hard to deal with liberals.
@UpChuck.Liberals:
Impeachment
The International Monetary Fund (IMF) quietly dropped a bomb that will mean Obama never has to worry about lack of tax income.
It recommends a series of escalating income and consumption tax increases culminating in the direct confiscation of assets.
DIRECT CONFISCATION OF ASSETS.
A “capital levy”— or one-off tax on you savings.
Yup.
Some European country (I think it was France) tried it a couple months ago and their banks were run on as people put everything out of France.
But, if the IMF makes it International Law, there will be no place to hide your assets!
More about it here:
http://www.forbes.com/sites/billfrezza/2013/10/15/the-international-monetary-fund-lays-the-groundwork-for-global-wealth-confiscation/
@jim crane: come on the fault can be given to both parties. The biggest fault is obama. As president (SIC) it is HIS responsibility to sit down and hammer out differences. however since he will ONLY side with the democrats there is not much chance of doing that.
The biggest problem is obama’s narcissistic personality disorder. it will not allow him to do anything but believe himself to be ruler, to be the smartest knife in the drawer, etc. etc. This entire situation is all about him
According to Connie Cass of the AP the government has in fact defaulted twice. The most recent being Jimmy Carter.
http://dailycaller.com/2013/10/16/government-default-its-already-happened-twice/
Just like you would balance your home or business finances, you pay what your mandatory bills are first, and with what is leftover, you prioritize the non-mandatory things that you want but are not required to have.
The government needs to do the same. Pay the debt as required under the Constitution. Pay only for those things that are REQUIRED under the Constitution as duties of the federal government. (National defense being the most obvious.) Then all the other non-required things the federal government has been doing have to be put into a priority list, and then either paid for or ended based on available money.
The left and the traitor RINOs will refuse to accept the common sense approach because they won’t have any way to continue buying the votes of the uneducated, the lazy and the greedy. Involuntary wealth redistribution – no matter how the progressives try to gussy it up with flowery language glitter – is still Marxism, which will not work without totalitarian government.
Leftists are either too ignorant to see where all this is heading, or they believe they will be at the top tier of the totalitarian political pyramid and don’t care because their muffins will always be buttered. Most appear to be the former, judging from the outrage coming now from Obama voters – including DailyKos bloggers – discovering how much higher their obamacare premiums are going to be for less coverage with larger annual deductibles than what they previously had…..I mean…it wasn’t like all us conservatives weren’t shouting at full volume that this was exactly the we should expect from such a stupid, fiscally insane idea like obamacare….
@Pete: Yes, that Daily KOS blogger is in for yet more rude surprises. If she thinks she’s got it bad now, wait until next year when her rates will double. Kaiser got in bed with Obama, as did AARP and now they’ve both got an incurable disease.
he just has to stop spending like there is no tomorrow that money belong to the people,
why don’t he spend his own pocket money from now on?
the pool money is down,
what the fak is so complicated, nobody trust him with money anymore,
he made his name in all those years pass,
@drjohn, #10:
Was it Moody’s that lumped Welfare together with all Other Spending, and put this otherwise undefined $1124 billion category at the end of the chart to hint that it comprises the entire Borrowing/Deficit total?
The point being that decades of borrowing have gone to fund cost overruns by Pentagon defense contractors, agricultural subsidies to rich farmers, and tax breaks to big corporations as much as they’ve gone to fund school lunch programs and food stamps.
those two girls that bullied the other teen far enough so she killed herself,
their picture show them and they look so ugly compared to the one they bullied,
i hope they carry the shame all their lives
@Greg:
Do you think that the folks here favor any of those things? The Pentagon is a sinkhole that needs huge reform of its procurement processes. It’s not “rich farmers” who get the most ag money. It’s corporate farmers like Exxon, DuPont and the other giants of the industry who pay the big bribes for subsidies. General Electric and other big political donors pay a lot to big government and socialist fascist politicians because crony government stifles competition with laws and regulations written with that purpose. The idea that corporate welfare is a partisan issue is silly. If you think your Democrat politicians really don’t get in bed with the mega-rich, then you are too stupid to care about. Their claim to be the party of the people is based on their willingness to buy votes from poor folks by offering handouts with few strings attached. This kills the initiative of the recipients, but insures their loyalty. The tragic effect on families is ignored.
As to school lunch programs and food stamps, those are not the proper business of the federal government anyway. Anything to do with education is best controlled much closer to the people whose children are impacted by the bureaucratic decisions of the education system.
If you get what you want, and the size and power of the bureaucracy keeps growing, I hope you live long enough to feel the misery you are so willfully creating.
@DaNang67, #20:
No sir, I do not. I would point out, however, that the spending cuts proposed by House republicans in the Ryan budget and assorted variations on it were ideologically biased, targeting various social programs to a far greater extent than items such as Pentagon programs, corporate subsidies—generally in the form of tax breaks—and agricultural subsidies.
Spending cuts will have to be more balanced and some tax increases are inevitable. I don’t see how it will ever be possible to to bring things under control without concessions from both sides. Gridlock accomplishes nothing.
I think republicans would be far more successful if they moved toward the middle. The need to move toward a balanced budget would a very appealing common sense message, if it were not being delivered by people that more than half of the country views as extremists. In my opinion, letting such people take the reins has been the GOP’s single biggest error. They lost the middle ground, and can’t prevail without it.
Greg
the people you are talking about view as extremist
because the DEMOCRAT PUBLICITY MEDIAS MADE THEM AN EXTREMIST PROFILE
JUST LIKE WHAT YOU ARE DOING HERE,
THEY HAPPEN TO BE THE FINES FAMILIES OF THIS USA, AND LOVE AMERICA ENOUGH TO GIVE OF THEMSELVES TO EXPOSE THE CROOKS AND CORRUPT POLITICIEN ON THE SIDE OPOSIT YELLING SLURS AND INSULTS,
TO MAKE THEM LOOK BAD,
WELL THEY ARE THE BEST THIS AMERICA HAS, YES
THE TEA PARTY,
YOU SHOULD BE ASHAMED TO COME HERE TO FA AND TELL YOUR LIES,
@Greg:
Hasn’t Obama made it clear he will only compromise with Syrians?
Redteam
the REPUBLICANS DO NOT HAVE TO MOVE ANYWHERE,
ONLY THE DEMOCRATS MUST MOVE TO ACCOMODATE,
DID YOU FORGOT? I WILL NOT COOPERATE JUST IN ANOTHER WORD TO MEAN THE SAME
@Redteam, #23:
I’m pleased with the fact that Syria is thus far complying with the program to eliminate its chemical weapons under U.N. supervision, and that we didn’t have to fire a shot to get to that point. Given the screwed up situation in Syria, with so much uncertainty about the rebel factions, I don’t know what better outcome we could have expected.
@Greg:
And you know that, How? They told you so?
You saying your guy got himself into something he didn’t know how to get himself out of? He had to get his buddy Putin to compromise with, but at least they weren’t those rascally republicans. We sure as hell don’t want to negotiate with those republicans.
Nan G
THAT TELL US TO TAKE THE MONEY OUT OF THE BANK,
because if those international BANKERS HAVE COME UP WITH THAT IDEA,
MEAN THEY ARE WORKING ON IT SINCE A WHILE,
I CAN’T BELEIVE THEY WOULD UNILATERALY TAKE THE WEALTH OUT OF THE PERSON’S BANK
AS A SUDDEN DECISION WITHOUT WARNING EMPTY THE BANK ACCOUNT OF PEOPLE,
THEY LOCK MONEY IN GREECE BANK BEFORE, AND NOW WANT TO SPREAD THEIR POWER IN THE USA,
ACCORDING TO FORBES LINK,
THIS WOULD BE THE START OF A TOTAL WAR, AND JUST IN CASE IT HAPPEN THE PEOPLE MUST KEEP THEIR CASH AND PAY WITH CASHMONEY,
THANK YOU FOR THIS INFO, IT CAN be fix and
DO LIKE FRANCE PEOPLE DID, EMPTY ALL THE BANKS,
SO THEY COULDN’T DO IT, BUT IT CREATE BIG PROBLEMS FOR ALL.
@Redteam, #26:
I’m aware of it because United Nations inspectors are present at 11 of the disclosed Syrian chemical weapon production locations, and have so far witnessed the destruction of equipment at 6 of them. That information is in the Forbes article I linked, and in the U.N. News Center material the article cites.
This thread is under the category, ”debt ceiling.”
Ironically we now have NO debt ceiling.
That fiscal deal passed by Congress on Wednesday evening temporarily suspends enforcement of it.
Until Feb.7th, 2014 we can spend without worries!
Then we will have to create and put back into place enforcement for a new debt ceiling.
No wonder Obama has his wish book open.
http://dailycaller.com/2013/10/17/theres-no-actual-debt-ceiling-right-now/
http://www.dailymail.co.uk/news/article-2465544/Surprise-Debt-ceiling-deal-gives-Obama-blank-check-loophole-allow-government-spend-WITHOUT-LIMIT-February.html#ixzz2i4hW6F5n
Nan G
WOW, THEY DID NOT FIX A LIMIT, HOW DANGEROUS,
THAT MUST BE A MISTAKE, A COSTLY ONE,
they would not be so dumb to miss that from the last ones who had the paper in their hand ,
they are the SENATE DEMOCRATS WHO REVISE THE PAPER,
SO IT WOULD SAY THE REPUBLICANS WHERE FOOL BY THE DEMOCRATS SO EIGER TO PLEASE THEIR MASTER,
BYE
@ilovebeeswarzone:
Now that it can, the debt is rising FAST.
A $328 billion debt increase in 24 hours!!!
See, Congress set a time deadline instead of a dollar cap.
That means debt can rise as much as Obama and Congress want it to, until the Feb. 7 deadline.
More here:
http://www.washingtontimes.com/news/2013/oct/18/us-debt-jumps-400-billion-tops-17-trillion-first-t/
Nan G
THIS IS THE MOST STUPID THING THE REPUBLICAN, GOPS AND TEA PARTY HAVE DONE,
TO NOT SET A LIMIT, THIS IS UNACCEPTEBLE TO THE PEOPLE
they must answer to AMERICANS FOR THAT,
THEY KNOW THE OBAMA BIG SPENDIG SPREE TARE,
THERE IS NO EXCUSE, FOR NOT HAVE LIMITED HIM,
DAMN
I AM THINKING OF THE PEOPLE WHO STRUGGLE
TO MAKE ENDS MEET, EVERY WEEK,
AND THE GOVERNMENT IS SPENDING THEIR TAX MONEY,
LIKE THEY OWN IT,
SOMETHING IS UNBALANCED AND THE THREAD WILL BREAK,
THERE IS NO OTHER WAY TO RESOLVE THAT PROBLEM,
BYE THANK YOU FOR THIS IMPORTANT INFO,
YES IT MAKE PEOPLE MAD AS HELL, TO SEE THEM LAUGH AT THEM
IN THEIR FACE,