The truth behind the Democrats' manufactured debt ceiling crisis.
President Obama and the Democrats are issuing dire warnings that the U.S. may default on its debts if the debt ceiling is not increased. This is a false threat. If the debt ceiling is not increased by August 2, it is highly unlikely that even one member of Congress would vote to stop paying on debt owed. They would not dare to be seen as voting to stiff other countries on money owed them by the U.S. Defaulting on our debt is a red herring argument Democrats are using to force people into thinking our only choices are raising the debt ceiling or raising taxes by closing tax loopholes. In actuality, once the debt ceiling is reached, it will come down to a choice of either raising taxes or finding areas to cut spending. Democrats don't want to admit that cutting spending is a realistic choice. They are too dependent upon the votes of people who expect handouts.
Treasury Secretary Timothy Geithner, the architect of TARP, who helped get us into this financial mess by racking up our debt level with billion dollar bailouts, claims there will be "catastrophic damage across the U.S. economy and global economy" and a "double-dip recession" if the debt ceiling is not increased. But when the U.S. reached the $14.3 trillion debt ceiling on May 21, there was barely a ripple in the stock market. Instead of the sky falling, the market for U.S. debt barely budged, and Treasury bond rates stayed relatively the same. The U.S. has until August 2 when the money physically runs out to make a final decision. Why should one of the primary persons responsible for getting us into this financial crisis be trusted to recommend how to get out of it? If anything, Geithner should be permanently banned from any position in finance.
This manufactured debt ceiling crisis is nothing new. When a previous $4.9 trillion debt limit was reached in 1995, Congress refused to raise the debt ceiling and nothing happened. The sky did not fall and we did not default on our debt.
Obama himself voted against raising the debt ceiling in 2006. He explained his vote at the time, "The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. Leadership means that ‘the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America's debt limit."
Obama has failed to explain why 2011 is any different than 2006. If anything, it is even more irresponsible now to increase the debt ceiling since spending has dramatically increased. If the debt ceiling is increased, it will increase our debt to an unaffordable 100% of GDP within a decade. The debt is now over 14 trillion, a 70% increase since 2006. That is $45,300 each for every person in the U.S. Government has expanded by 36% since 2007, a reflection of Obama's term in office. We are currently at the highest levels of deficit spending since World War II, and we are not even at war. The government is borrowing nearly 40 cents of every dollar that it spends.
Read the rest of the article at Townhall
The only reason conservatives talk about keeping Social Security and Medicare in place for current recipients is that they know it would be political suicide for them to come out in favor of abolishing these programs. What conservatives really want, of course, is the abolition of all such programs. While I understand the political motivation of conservatives who maintain a discreet silence about their true aims, I think the duplicity and cowardice of conservatives who won’t stand up for what they want should be made clear to all.
Rachel, good article. The fact is the debt gets paid with federal revenue (taken from taxpayers a declining breed). Keeping the debt ceiling simply means the debt cannot be paid with more debt (remember the concept of the pyramid scheme). This is not only a non-crisis but a clear attempt to cripple the country.
Democrats should be ashamed of themselves, but unfortunately they get their marching orders from the media drones that are unable to spell economics much less understand the concepts.
In truth the entire debt limit argument is a red herring on multiple fronts:
First of all; why even have a debt limit? We increased the limit to $14.294 trillion in 2009. Now we are back here again and the President wants increases to carry him through the next election cycle; approximately another $2 trillion. Just like the progressive idea that if a minimum wage of $7.25 id better than $6.55 why not raise it to $10, or $15? So much the better, right?
Why even have a debt limit if the federal government is just going to blow through it in less than two years? The answer is because progressive democrats WANT this fight each session. It gives them the opening to go to the complicit MSM and say; “Those mean, nasty, Republicans want to make the US default.” Or “Those extremists in the Republican Party want to starve children.” or “Those rabid right-wingers just want to protect the rich at the expense of throwing Grandma off a cliff.” They need to have this annual opportunity to stampede one special interest group or another. They cannot sell any of their programs on the merits because their programs have none. Their only answer is to panic the public; “We have a debt crisis we need to raise the limit.” It’s no different than in 2009 when we had an “economic crisis” that demanded we spend $860 billion in ‘stimulus’. The only things that package stimulated was the unemployment rate and the debt.
Case in point: In a CBS interview, Scott Pelley brown-nosed Barack Obama with the question; “Can you tell the folks at home that no matter what happens, the Social Security checks are going go out on August the third?” To which the Prevaricator-in-Chief responded; “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”
Notice he didn’t say that the welfare checks to his homeys in the hood might be delayed. This is how progressives fight this battle at all levels of government. When a city bumps up against its budget limit, do they close libraries, the code enforcement office, or send home the Mayor’s staff? No! They lay off police, firefighters, release prisoners; anything to stampede the public into opening their wallets.
The same thing happens at t he federal level. The President will not delay the welfare checks or Medicaid because that money goes to his constituents: The lazy, the indolent, and the shiftless; you know his people. He’ll make certain those subsidies keep getting to the urban housing advocates, the green energy advocates, and his favorite community organizing groups as well. At the same time he’ll do his best to ensure that his ‘enemies’ seniors, military veterans, and family farmers get shut out completely.
And why? Because this progressive argument about ‘shared sacrifice’ is a red herring as well. Whenever money gets tight, progressives begin the ‘us-versus-them’ argument. They deliberately pit the argument as one between the losers I life’s lottery and those corporate jet owners. The bait-and-switch is this. Progressives are convinced that no matter the circumstance the one entity that should never do with less is government. It’s just impossible for them to fathom that government should ever shrink; its growth should know no bounds.