Why seniors wont be put on All Catfood Diet
By Nick Gillespie & Meredith Bragg
Texas Insider Report: WASHINGTON D.C. All anybody in Washington can talk about these days is the debt limit or debt ceiling the total amount of money the federal government is authorized to borrow at any given time leading to fears that Washington is going to default on its bonds stop cutting Social Security checks & destroy the economy more than it already has. But the debt ceiling debate is full of malarkey for at least three reasons.
After a decade in which spending increased by more than 60 in inflation-adjusted dollars and the debt limit was raised no fewer than 10 times the government is about to max out its $14.3 trillion credit line
1. August 2 is a phony deadline. Treasury Secretary Timothy Geithner has pushed back the drop-dead date when the U.S. finally reaches its limit a bunch of times already: March 31 April 15 May 31 were all cited as deadlines before August 2 was inked in as Armageddon.
But this time he means it man really.
2. Reaching the debt ceiling is NOT the same as defaulting on our debt which would indeed be catastrophic.
Think about it: You can max out your credit cards but as long as you keep paying the minimum amount due each month your creditors dont go crazy. Interest on the debt is a small fraction of total outlays and the government has a series of tools
from using cash on hand to selling assets to scrimping on nonessential payments to make sure interest payments are made and seniors arent put on an all cat-food diet.
3. Legislating-by-Panic is no way to run a country. The reason were in this mess is because
government cant stop spending. And the government cant even pass a budget on a years notice.
But were expecting them to come up with a good plan for the countrys borrowing in a couple of weeks? Trying to force through an expansion of the countrys credit line by promising cuts in spending down the road is exactly why were in this situation to begin with.
It makes far more sense to do something like sell some TARP assets -- the government is sitting on $320 billion in outstanding direct loans and equities investments -- to cover interest payments through the end of the fiscal year than to force Congress and the president to come up with a budget that cuts spending -- and borrowing -- for real next year not is some distant future.
For more information check out Nick Gillespies 5 Uncomfortable Facts About the Wonderful Horrible Debt-Limit Debate and Mercatus Centers Jason J. Fichtner & Veronique de Rugys The Debt Ceiling: What is at Stake.
