They keep coming back. This week's bullshit is that restraining spending so that our budget remains under the debt limit means the government goes into default. That is not default - by definition.
Default would be refusing to pay the payments due on our debt - the interest on the debt. Rather than default, this would be better called "living within their means" or "being responsible". We will not default unless the administration chooses to.
The Fed.gov will get approximately nine times more tax revenue than the interest due, so we don't default unless congress chooses to spend the tax money on the equivalent of hookers and blow instead of paying the debt. According to the Fed.gov themselves, this fiscal year our interest on debt
is $402,435,356,075.49 or to put it more conveniently, $402 Billion. Estimating the federal income tax collected through the end of the year based on the Debt Clock
shows tax revenues will be $3637 Billion, almost exactly nine times the amount needed to avoid default.
I know I've written about this endlessly in the five years I've been blogging, but I'm pretty sure I have a lot of new readers and I have to assume they haven't read the many posts I've done on this. (Example from four years ago
) Let me recap a little.
First, although they're going to make a big deal about the debt ceiling, I believe that the US effectively doesn't have a ceiling at all. I say that because there isn't one time in history that we've held the debt ceiling in place. Whenever it comes up, our
sainted leaders vote to raise the debt limit. Six times in history
, they didn't pass the debt ceiling increase in time, and the country continued to run without going into default. Either that, or they simply ignore the ceiling and allow the Treasury department to use "extraordinary measures". If you or I did that, instead of "extraordinary measures" they would say we "lie, cheat and steal". In July of 2013
, I did a story on the Treasury Department's spending clock suddenly stopping from May of '13 until the debt ceiling got raised. Newsflash: the spending didn't stop; they just lied about it.
Second, I believe that since they go into these times knowing with 99.9% certainty that they will raise the ceiling, this is all theater so that each side of the two-headed ruling class monster can claim to be heroes to their supporters.
So what's the big picture:
- This is all theater
- They're going to raise the ceiling because they don't have the restraint of a drunken sailor, who, after all, stops drinking when he's broke.
- The government is not really going to shut down and it absolutely isn't going to get smaller in any meaningful sense because to do that would hurt the ruling class.
- Corollary: the only way the government shuts down is if one side or other believes they get a lot of political points by doing so. I actually think the president wants a shutdown so that he can shame and blame the Stupid party. The Stupid party is actually so stupid they think they can make points in the press that it's the president shutting it down.
- The president says that these discussions may lead to another 2008 economic crisis: find me someone who says debt ceiling discussions had anything to do with it. As you can see from the above graph, the debt ceiling ratcheted up without interruption throughout that time period.
- This only ends when the world decides to stop putting up with our stupidity and stops using dollars. This is not just theoretically possible, all the major players are moving in that direction now. That could happen this year or not for a few years to come.
As I say, I've written an acre of posts on this. I just felt obligated to pass on a few points for new readers and new liberty-minded people.
I gotta hand it to the Democrats. Unlike the stupid party they have a plan and they are working their plan. The all know the debt "piper" must be paid. BUT if and when this house of cards collapses they want to make sure it was the Republicans who put the last card in place. Either keep borrowing and spending or it will be YOUR fault when the economy drops off the cliff. The Democrats created the problem, they made it 100 times worse by doubling the total debt in 6 years and now they have the Republicans over a barrel and the stupid party refuses to work together to fix it and present their case to the public. When this goes "tango uniform" all the Republicans will be standing around ( or going on TV) pointing at each other and all the Democrats will be pointing at the Republicans. Who do you think will win the congress and the presidency after that?ReplyDelete
This isn't about Republicans or Democrats. This is about the people in power remaining in power, and it is about generations of greed on the part of the American people themselves.ReplyDelete
Social Security, Medicare, and Interest on the debt add up to more than the government takes in through tax revenue. The rest of the government (courts, FBI, prisons, military, all of it) borrows to exist.
What this means is that ALL government spending MUST be cut, Social Security included. See a politician suggest that, and watch him be run out of office by the most powerful lobbying group in DC: The AARP. The people over 65 will never stand for a reduction in SS benefits. (Spare me the talk about how you paid for SS. Most recipients of SS benefits get back FAR more than they paid in to the system) No politicians from any party will do it.
Military spending will have to be cut in half. We need to shut down all of our overseas bases, and stop subsidizing other nations by being their no cost Defense Department. The Republicans will never do it.
All government handouts will have to be cut. Welfare, food stamps, WIC, all of it. The Democrats will never go for it. (Spare me the talk about how not taxing a business is the same as "corporate welfare" as if NOT stealing someone's money is the same thing as giving them money.)
No, we are riding this fiscal train right off the cliff.
Time to start getting rid of my stock and turning it into tangible things, like gold, silver, brass, lead, and steel....ReplyDelete
I don't agree that SS should be cut. What they should do is clean up the roles and kick everyone off who didn't contribute for 40 quarters. Then they should separate SS from the federal budget and get it out of congresses direct control. I believe that SS takes in about $830 billion a year and pays out about 830 billion a year. So SS is NOT the problemReplyDelete
Welfare on the other hand costs the federal government about $1.2 trillion a year. But since welfare is about 2400 programs spread over 5 different cabinet level departments it's size is typically understated. Unlike SS welfare is NOT self supporting. It is entirely paid for by the working stiffs and entirely distributed to the noo-working. END WELFARE. Replace it with workfare.
Medicare is a legitimate program filling a legitimate need. It is "mostly" paid for by those who benefit from it. It does not take in as much as it spends but that is no reason to end it. Either increase the medicare portion of the payroll tax to cover the cost AND/OR increase the medicare co-pay. But it would be stupid to eliminate it
End all benefits of any type to non-citizens. That alone will save the federal government about $350 billion a year and save the states even more.
SS doesn't need to be cut. If they would close the agencies that have far exceeded their authority and the need for their existence, the debt could be settled in (at a guess) a few years: EPA, FDA, DOE, IRS (flat tax with no exceptions, no IRS needed), etc., etc. Yes, all of those thousands of employees would take a hit, but if we kicked out the 20+ million illegals, there would be jobs aplenty for those out of work. I'd love to see all the scum from IRS and EPA out there picking tomatoes and melons in the hot sun.ReplyDelete
Taking the illegals off of all of the rolls of those getting Medicaid, SS, medical benefits, free schooling for the kids and free college, food stamps, etc. With the savings from expelling all of the illegals, we could rebuild the military and staff it with warriors once again, instead of brown-nosed yes men (and women, and trannys, and gays who want to rape straights, etc.)
.Gov has NEVER, EVER been shut down, despite hysteric suggestions by others that it has, or will be.ReplyDelete
And so now you know exactly what the term "sustainable" means,